A delegation of technical experts of the International Monetary Fund (IMF) has reached Islamabad on a mission to expand the tax net in Pakistan.
As per officials in the Federal Board of Revenue (FBR), during the weeklong consultations, the IMF delegation will provide assistance on increasing tax efficiency.
The Fund has insisted on raising the tax-to-GDP ratio to 15%. The IMF has also demanded to bring the rich into the tax net.
The consultations are also likely to feature a discussion on the mechanism to bring retailers into the tax net. The global lender will provide policy guidelines for the proposed scheme.
The target is to bring 1-1.5 million people into the tax net by June 2024, while the number of taxpayers will be taken up to 6.5 million by then.
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Moreover, third party data and technology will be used to expand the tax net, the officials said.
Previously, it had been reported that any amendments proposed to the tax policy as a result of the negotiations will be implemented from the new budget.
Sources had said around a week ago that negotiations to improve the tax policy and its implementation will continue for a week after the arrival of the IMF technical delegation to Pakistan next week.
They further said that the delegation will review measures to increase tax revenue, and hold policy discussions with the FBR.
During the discussions, measures for amendments to the tax policy will also be reviewed. The purpose of the amendments is to increase the tax net and collect more revenue, the sources added.
The basic infrastructure of a scheme for retailers will also be developed, according to the sources.
The target is to bring in a million people into the tax net and increase it to six million. The proposed amendments to the tax policy will come into effect from the next budget, the sources added.
