Islamabad: No Mini-Budget Expected Before End of Current Fiscal Year; Focus on Boosting Tax Revenue without New Taxes
Prime Minister Shehbaz Sharif has issued directives regarding the strategy for the upcoming federal budget, official sources told media.
According to the sources, the government has decided that no mini-budget will be presented before the end of the current fiscal year on June 30.
Instead of introducing new tax measures to cover the revenue shortfall, efforts will be intensified to increase tax collection through alternative means.
The government aims to convince the International Monetary Fund (IMF) to accept no additional taxes.
To bridge the tax shortfall by June 30, emphasis will be placed on expanding the tax net, improving compliance, and enhancing revenue generation without imposing fresh levies.
Anti-smuggling operations will be accelerated further. Strict action against tax evaders and non-filers will continue.
A special cell of the Federal Board of Revenue (FBR) is actively auditing data of non-filers who display ostentatious lifestyles on social media platforms such as X (formerly Twitter), Facebook, Instagram, and TikTok.
Covert operations are underway against individuals flaunting wealth on these platforms despite not filing tax returns.
In line with Prime Minister Shehbaz Sharif’s instructions, relief measures for salaried employees are being prepared.
A dedicated strategy for providing tax relief to the salaried class will be incorporated into the next budget.
The Prime Minister has also directed the preparation of proposals to reduce tax rates for the industrial sector, with efforts to persuade the IMF to support these concessions.
For the upcoming budget, a new industrial policy has been finalized, under which the super tax rate on the manufacturing sector will be gradually reduced.
Reforms in the super tax structure will lower the rate for the manufacturing sector to 5% over the next four years.
Once a primary balance surplus is achieved, the super tax will be completely eliminated in the fifth year.
Proposals include raising the minimum income threshold for super tax applicability on the manufacturing sector from Rs 200 million to Rs 500 million.
Additionally, to impose a 10% super tax, the threshold is proposed to be increased from Rs 500 million to Rs 1.5 billion starting from the next budget.
These measures aim to provide incentives for industrial growth, improve tax compliance, curb evasion, and ensure fiscal discipline while negotiating favorable terms with the IMF for the next fiscal framework.
