The International Monetary Fund (IMF) has decided to give tax breaks to all the businesses affected by the global outbreak of coronavirus. However, the federal government is not ready to renegotiate the $6 billion package as it would make the next year’s tax collection impractical.
During Prime Minister’s media interaction, Abdul Hafeez Sheikh responded to a question by saying, “The IMF has agreed to give tax concessions to industries and individuals, who are being affected by the coronavirus.”
He said that Pakistan can seek help from the IMF in the time of crisis in this reference, the IMF announced a $50 billion package for the economies being hit by the coronavirus. Asian Development Bank (ADB) and the World Bank have also agreed to grant loans to the businesses affected by the global pandemic.
Dr. Hafeez Sheikh said that an inclusive package relief will be announced soon for people, industries, exporters, construction, tourism, and small and medium enterprises.
The Federal Government of Pakistan is planning on setting the FBR’s tax collection for the current fascial year to Rs. 6.3 trillion which seems very unlikely to achieve due to the widespread of coronavirus. The federal government has projected Rs3.626 trillion provincial shares for the next fascial year, which indicates that the FBR’s revenue collection target will be more than Rs. 6.3 trillion.
As per the official data, the FBR will enforce additional taxes equal to 2% of GDP or Rs. 1 trillion by restraining exemptions, rationalizing income taxes, imposing real income-based taxation by gradually phasing out the final tax regime.
Furthermore, the government has released 61 types of medical equipment and lifesaving instruments including biosafety cabinets, PCR chambers, kits, ventilators, masks including N 95 types, vital signs monitors, Intensive care unit beds, infusion pumps, X-Ray machines, face shields, disposable shoes, etc. from all types of taxes and duties for three months.