- Govt Mulls reducing the FBR tax objective to RS13.7Tr from RS14.13 TR.
- Reduction of the tax objective of RS300-500 billion for financial year 26 possible.
- Flood withdrawal to be imposed on high net sectors.
Islamabad: After having missed the deadline to privatize the Pakistan International Airlines (PIA), the government is preparing various scenarios to revise the drop in the fiscal recovery objective of the Federal Bureau of Return (FBR) in the RS300 billion range to 500 billion rupees for the current exercise, in the process of exercise, in the process of exercise The news reported Thursday.
On the one hand, it is possible to reduce the annual objective of tax collection from the FBR of RS14.13 Billion to RS13.7 Billions or RS13.9 Billions, taking into account the potential revision of the macroeconomic framework.
There is another proposal on the cards due to the slap of an flooding withdrawal in order to generate resources for the use of funds on rehabilitation and reconstruction efforts.
The government is finalizing the exact details of the proposed flood tax, which should be imposed on sectors and high net individuals.
According to initial estimates have been drawn up for the damage caused by floods, the main cultures of the country such as rice, sugar cane and cotton should undergo losses of 15%, 5.7%and 10%, respectively.
Livestock has also faced losses. This will result in a revision of the target of real GDP growth of 4.2% to around 3%. IPC -based inflation should also increase the range from 5 to 7% to 8%.
When he was contacted, a senior official said that FBR revenues may have loss of income in the first half (July-December) up to 300 billion rupees. The losses suffered by the agricultural sector could erode the purchasing power of the agricultural sector, there are therefore estimates to harm the collection of sales tax.
But independent tax experts fear that income losses are close to 500 billion rupees for the current financial year.
FBR high-ups argued that income loss would begin to get back in the second half (January-June) because remaining crops, such as wheat, could get better yields.
On the privatization plan, the government has missed the deadline to privatize the PIA transaction by August 2025.
The privatization of First Women’s Bank and HBFC transactions by May 2025.
A financial advisor was hired for the privatization of three lots distribution companies (IESCO, FESCO, GEPCO), and the reasonable diligence of the sale is currently underway, with targeted auctions for December 2025.
The government is now targeting a third bank, ZTBL, for privatization by the end of this year, and aims to initiate the hiring process of a financial advisor for the privatization of Batch II Discos (Hesco, Sepco, Pesco) at the end of April 2025, but that could not be accomplished.
The government wants to move to the privatization of Genco, with auction for Nandipur targeted for January 2026. The transaction structure for the Roosevelt hotel is still in progress.
The government aims to continue to prioritize the privatization of commercial public enterprises (SOES), with the greatest priority on profitable commercial public enterprises and supported by the completion of the classification of the privatization of SOE, to reduce the commercial imprint of the government and to attract investments which can contribute to the development of Pakistan.
These efforts should be supported by fundamental structural reforms to restore the energy sector to viability.
Key measures include continuous progress on the privatization of disco and / or developments to private concessions to improve the performance and disco services; Successful efforts to move captive power to the electrical network; Complete the restructuring of the National Transmission Dispatch Company to improve efficiency; Private ineffective public production companies; And make new progressive progress to a competitive electricity market.
The Pakistani authorities have undertaken to ensure that the implementation of these reforms will put the flow of any new circular debt (CD) to zero by FY31 (when the functionality of the stocks above ends) at the latest.
