According to a The News article, the federal government plans to present the much-anticipated Rs18.5 trillion budget for the fiscal year 2024–25 on Wednesday (today) in an effort to obtain a new IMF bailout.
The ministry has finished its preparations for Finance Minister Muhammad Aurangzeb’s presentation of the budget to the National Assembly.
The budget was unveiled a day after the government declared that the current year’s 2.4% predicted economic growth would fall short of the 3.5% objective, despite 30% more revenues than the previous year and controlled fiscal and current account deficits.
In contrast to the revised predictions of Rs9.252 trillion for the previous financial year, the government is anticipated to set the Federal Board of Revenue’s (FBR) tax collection target at Rs12.97 trillion for the upcoming fiscal year.
On the eve of the final budget for 2023–24, the parliament had approved an original target of Rs9.415 trillion for tax collection, which the FBR had reduced downward.
By increasing income and reducing uncontrolled spending, the tax collecting authority hopes to achieve fiscal consolidation by reducing the overall fiscal deficit from over 7.6% of GDP in the previous fiscal year to 6.5% of GDP in the upcoming budget.
In order to raise revenues of Rs1.7 trillion and Rs1.3 trillion, respectively, through nominal growth, efficient enforcement, and extensive taxing measures, the greatest tax revenue mobilization efforts will be focused on the Inland Revenue (IR) front, including income tax and GST.
The FBR projects that direct taxes will bring in Rs5.512 trillion of the Rs12.97 trillion annual tax collection target for the upcoming budget. This includes Rs5.45 trillion from income tax, Rs4.919 trillion from sales tax, Rs0.948 trillion from federal excise duty, and Rs1.591 trillion from customs duty.
The Washington-based lender recommends access to comprehensive information on taxpayers, including their socioeconomic features and the taxes they owe and pay, in order to broaden the tax base.
Achieving the goal requires having access to revenue administration taxpayer level data. Depending on the type of analysis the tax policy units (TPUs) conduct, additional data may be needed. These might include household budget surveys from national statistical agencies, business surveys from central banks and national statistical agencies, social security data, property information from cadasters, and other data.
When creating data sharing agreements between a TPU and government agencies that possess the data, privacy and confidentiality issues must be considered.
In order to handle massive amounts of data that must be shared, kept, managed, and analyzed, the FBR will need to make use of technology. The government would also reduce its spending on pension changes, subsidies, and paying State Owned Enterprises’ share of the bill.
The 2019 budget has an estimated expenditure of Rs. 18.5 trillion, thus the government will need to raise money from both tax and non-tax sources in addition to spending.