A technical delegation of experts from the International Monetary Fund (IMF) has arrived in Pakistan to engage in consultations regarding the country’s tax policies, FBR sources told ProPakistani.
The primary objective of the IMF team’s visit is to provide technical assistance for capacity building and offer guidance on enhancing tax revenue and expanding the tax net. Sources within the FBR disclosed that the IMF is urging Pakistan to include the affluent class in its tax net and is adamant about raising the tax-to-GDP ratio to 15 percent.
The IMF is expected to furnish policy guidelines for the proposed scheme through the FBR.
The set target is to bring 1-1.5 million additional individuals into the tax net by June 2024, with the overall number of taxpayers projected to reach 6.5 million, sources said. To achieve this goal, third-party data, technology, and resources will be leveraged to expand the tax net.
In a bid to amend the tax policy and fulfill the IMF’s demand for a 15 percent tax-to-GDP ratio, sources reveal that a compliance improvement plan will be developed in collaboration with the IMF by March 2024. The plan includes the preparation of a Risk Register Report and the development of a dashboard, which were completed in December.
Under the Compliance Improvement Plan, FBR field formations will compile a Risk Register based on information from taxpayers, with data sourced from banks, the National Database and Registration Authority (NADRA), and the tax regulator itself. A comprehensive list of individuals outside the tax net will be generated and shared with the IMF.
Compliance risk management is set to become an integral part of the tax policy through amendments, with the FBR and IMF working together to develop and implement these changes. Starting today. discussions are scheduled to be held with the FBR technical delegation to formally separate tax administration and tax policy.