The upcoming budget for the federal coalition government is presenting challenges, especially after the recent 10-day IMF mission visit focused on increasing revenue collection and reform demands. The IMF is pushing for new tax initiatives in the upcoming budget, but no final decision has been made yet.
The budget, set to be announced on June 7, will be a crucial test for the coalition government to make difficult decisions that may impact existing taxpayers. Revenue collection estimates for the upcoming fiscal year are over Rs1,150tr, with additional revenue measures to be determined in consultation with the IMF.
The IMF is looking to raise revenue through various means, including potentially hiking tax rates on federal taxes and introducing new taxes. The government may need to make politically tricky decisions regarding taxation on pension and agricultural income.
Overall, the government faces a tough road ahead in terms of revenue generation and tax reforms. The IMF will be closely monitoring the government’s actions and decisions leading up to the budget announcement.
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