ISLAMABAD: In order to bring down the budget deficit the government is expected to introduce new taxes in the upcoming budget that are expected to yield an estimated Rs255 billion.
Sources said that the reduced budget deficit is set at 4.8 per cent in the fiscal year 2014-15, currently 5.7 per cent.
New taxation measures may include an increase in federal excise duty rate to 17 per cent, new adjustable taxes aimed at bringing the undocumented sector into the tax net and higher rates for non-taxpayers.
The expected measures also include the introduction of a string of new withholding taxes as well as an increase in the rates of existing ones and the withdrawal of customs exemptions and concessions. A proposal to introduce asset-based taxes is also on the table.
This year, FBR’s tax-to-GDP ratio is expected to fall to 8.8 per cent from the budgetary target of 9.9 per cent. Pakistan has one of the lowest tax-to-GDP ratios in all of Asia; lower than Bangladesh’s 10 per cent; Sri Lanka and Philippines’ 12 per cent; Malaysia’s 14 per cent; India’s over 16 per cent; Thailand’s 18 per cent; and Turkey’s 21 per cent.
