Islamabad: The Federal Board of Revenue (FBR) has finalised the tax proposals draft for Budget 2020-21 geared towards the ‘simplification of laws and removing tax anomalies’, according to news sources. The government is reported to be mulling a ‘tax-free budget’; with the final decision on this pending consultation with the International Monetary Fund (IMF) after Eid-ul-Fitr.
The approval of the budget will be subjected to IMF’s consideration to a lower tax target for the tax year 2020-21. Previously, the IMF had proposed a tax target of PKR 501 trillion for the same year, which is 30% higher than the target for the tax year 2019-20.
However, owing to the economic impact of the COVID-19 pandemic, the IMF had lowered the FBR’s tax target to PKR 3.9 trillion from PKR 4.8 trillion – the achievement of which still depends on the revival of business activities before Eid-ul-Fitr.
Meanwhile, the FBR is reaching out to all stakeholders to identify and redress their problems in taxations. Sources report that the FBR is mulling tax incentives to help revive certain sectors. The board has even worked out the revenue collection estimates amid the ongoing lockdown and resulting halt in the economic progress.