The International Monetary Fund (IMF) has proposed increasing the General Sales Tax (GST) rate from 18 per cent to 19 per cent. However, the government opposes this increase, arguing that it will lead to higher inflation.
Additionally, the IMF has suggested imposing higher taxes on solar panels, electric vehicles, and hybrid vehicles. The proposal includes raising the GST on electric vehicles from 1 percent to 18 per cent, increasing the sales tax on hybrid vehicles from 8.5 percent to 18 per cent, and raising the GST on solar panels from 10 percent to 18 per cent.
The IMF has also approved a fixed tax scheme for retailers. Under this scheme, retailers with an annual turnover of up to Rs 200 million will pay a fixed tax of Rs 25,000, and small retailers will be exempt from audits.
According to sources, the Federal Board of Revenue (FBR) is facing challenges in meeting the tax target for the current fiscal year. In the first 11 months, the FBR collected Rs 11,232 billion in revenue, but an additional Rs 2,747 billion is needed in June to achieve the target by June 30.
FBR officials have denied reports about an increase in GST, stating that no final proposal for raising the tax is currently under consideration. No decisions have been made regarding taxes on solar panels, electric vehicles, and hybrid vehicles either.
Furthermore, the IMF has projected that the average inflation rate will be 8.4 per cent in the next fiscal year.
