Govt mulls Rs13.9-14.2tr FBR tax target in upcoming budget

ISLAMABAD: The Ministry of Finance is in the process of preparing the Budget Strategy Paper (BSP) for the next fiscal year 2025-26, as discussions are underway for fixing the FBR’s tax collection target in the range of Rs13.9 to Rs14.2 trillion for the next budget.

On the expenditure front, the government has envisaged interest payments of Rs8.2 trillion for both domestic and external debt. On the revenue collection front, the FBR has worked out two scenarios for envisaging a tax collection target of Rs13.9 trillion for the next budget, whereby the government will have to propose the imposition of Rs300 to Rs350 billion in new taxes in the budget. Now then, FBR’s tax target has been proposed up to Rs14.2 trillion, so in such a scenario, the government will need to slap Rs550 to Rs600 billion in new taxes.

An interesting debate has been continued among the dwellers of Q Block (Finance Ministry) and the Revenue Division FBR for fixing the increased tax collection target of more than Rs14.2 trillion without the imposition of new taxes.

It is the wish-list of the incumbent government, but when the IMF mission arrives in Islamabad then the government will have to satisfy the IMF to achieve the realistic target of the next budget.

On the other hand, the Ministry of Finance is asking for jacking up FBR’s tax collection target so that the budget deficit can be curtailed and primary surplus can easily be materialised.