Mini-budget unlikely as IMF satisfied with tax steps

The Inter­national Monetary Fund (IMF) is reported to have expressed satisfaction over the increase in the tax-to-GDP ratio by nearly 1.5 percentage points, relieving the authorities from any push for additional tax measures through a mini-budget. According to sources closely involved in ongoing discussions with the visiting IMF mission, the Federal Board of Revenue’s (FBR) revenue collection target for the current fiscal year will remain unchanged at Rs12.97 trillion. Authorities have ruled out the need for additional taxes or a mini-budget, citing the IMF’s positive response. Officials said that economic activity is expected to pick up by December in view of a stable exchange rate and a reduction in the State Bank’s policy rate, likely offsetting a tax shortfall of around Rs190 billion recorded in the first four months (July to October) of the fiscal year. There would neither be any increase in the petroleum levy nor would general sales tax (GST) be imposed on petroleum products, the sources said after a meeting of the Senate Standing Committee on Finance and Revenue presided over by PPP Senator Salim Mandviwalla.