Petroleum products and solar power prices may rise sharply in Pakistan

The International Monetary Fund has suggested a big increase in Pakistan’s tax target for the next financial year. According to the proposal, the target could rise by more than Rs 1,600 billion, taking the total to over Rs 15,600 billion.

The IMF has also recommended some major tax changes. It said that the current zero percent GST on petroleum products should be increased. It also suggested imposing 18% tax on solar system users and ending tax exemptions given on new houses.

In addition, the IMF has asked the government to introduce an asset-based tax on small businesses and traders.

Officials from the Federal Board of Revenue said that tax collection has been lower than expected this year. Last year’s tax target was Rs 14,131 billion, which was later reduced to Rs 13,979 billion, but even then, a shortfall of Rs 428 billion was seen in the first 8 months.

They added that the total shortfall in the first 9 months may go above Rs 600 billion. In March so far, around Rs 865 billion has been collected, while the target was Rs 1,367 billion.

Officials said that high oil prices and global conflict have affected imports and slowed down business activities, which also impacted tax collection.