Islamabad:
The Government is considering a mini-budget to collect funds for the rehabilitation of floods by imposing additional taxes on cars, cigarettes, electronic products and a direct debit on articles equal to the reduction of regulatory rights made in June.
Sources have declared that the plan targets luxury items used by rich individuals as well as more than 1,100 imported goods, with revenues to be collected by federal lifting.
If it is approved by Prime Minister Shehbaz Sharif, the Mini-Budget would help fill the income deficit and generate funds for the rehabilitation of floods, although most of the rescue and rescue work is currently carried out by the provinces.
Government sources have told L’Express PK Press Club that the Minister of Finance Muhammad Aurangzeb had presided over a meeting on Tuesday to examine the proposals that the government could introduce by a bill on levies.
The quantum of additional income through the mini budget, the exact rates and goods that will be struck remain undecided, according to sources. The plan, according to some sources, consists in increasing at least 50 billion rupees thanks to the mini-dubbing, but the final amount could be higher.
The development occurred on the heels of the tax deficit of 40 billion rupees during the July-August period, which should expand well above RS100 billion by the end of this month, the devastating floods. This will compromise some of the budgetary objectives linked to the International Monetary Fund (IMF).
The spokesperson for the Ministry of Finance and the Federal Board of Return (FBR) did not respond to requests for comments on the government’s plans to impose the flood tax.
Sources said the government was considering a 5% levy from electronic products beyond a certain price threshold. The threshold is being finalized at the moment, said a source. Likewise, there is also a recommendation to impose RS50 Levy on each pack of cigarettes, regardless of the brand and the price, have said sources.
Cigarettes are consumed by the rich and the poor and such a sample can work the government’s possible account of collecting money from the rich to spend on the population affected by the floods.
Unlike the tax that is shared with the provinces, a levy is federal income and it is not part of the FBR collection. But the FBR income deficit will be offset due to the increase in tax measures without tax such as the flood tax.
During Tuesday’s meeting, the question of the constitutionality of the federal levy on certain goods was also discussed at length, according to sources.
The FBR is struggling to achieve its objectives despite the large -scale manufacturing of 9% in July, compared to a year ago, according to Pakistan Bureau of Statistics (PBS).
There were also criticisms of the government for its inability to rationalize spending and its tendency to impose more taxes. The IMF also recently questioned a new proposal to impose a new municipal tax for the construction of RS213 billion of authorization from Jinnah Medical Complex in Islamabad.
The sources indicated that there was another proposal under study to impose a levy on cars beyond a certain capacity of the engine. The government can reach 1,800 cc and more cars of engine capacity. The cars are already highly taxed and the government obtains 30% to 61% of the total price of taxes.
Ali Asghar Jamali, chief executive officer (CEO) of the Indus Motors, said last month that vehicle prices were raised due to government taxes, which vary from 30% to 61% of the total vehicle price. Jamali said the tax component in the case of a small car was 30%, including 32,935 Rs from the tax recently introduced on combustion engines.
In the budget, the government had reduced regulatory tasks to approximately 1,150 articles within the framework of the trade liberalization plan guided by the IMF. Now, the Ministry of Finance envisaged a levy from these goods equal to reduced rates.
Within the framework of the IMF agreement, the government cannot reverse the liberalization of trade and it may have trouble selling the proposal to the IMF during the talks of the upcoming journal. Until now, there has been no real evaluation of the damage caused by floods and the government called on Tuesday to avoid speculation.
A meeting of the Prime Minister’s committee on the damages of the floods took place in Islamabad under the presidency of the Federal Minister of Planning Ahsan Iqbal. The meeting examined in detail the evaluation of the damage of the 2025 floods, according to a press release.
During the meeting, provincial governments have agreed that a final assessment of the flood damages would only be possible once the water fell, he added.
IQBAL said that the evaluation of damage would be prepared in coordination with provincial governments. He also declared that a preliminary assessment of the damages of the floods would be completed within 10 days.
IQBAL has urged the media to refrain from speculation concerning the damage caused by floods, adding that precise and transparent data would soon be available. He said rehabilitation work was underway in the areas affected by floods, while federal and provincial institutions are jointly carrying out rescue operations.
The Minister said that a complete evaluation of needs after the damage and requirement disaster would be carried out with the participation of international organizations. He assured that all rescue measures in the affected areas would be based on precise and transparent data.
