ISLAMABAD - The government is likely to take fresh taxation measures of Rs150 billion besides withdrawing tax exemptions worth Rs100 billion in the budget for the next financial year (2016-2017).

The federal cabinet had approved the Budget Strategy Paper, which set an ambitious tax collection target of Rs3735 billion for the upcoming fiscal year. Officials of the Ministry of Finance and Federal Board of Revenue (FBR) informed that government would eliminate Rs100 billion tax exemptions granted through SROs in the budget.

They further informed that government is contemplating to impose new taxation measures worth Rs150 billion. “The government is expecting to generate Rs378.2 billion with economic growth of 6.2 percent and inflation rate of 6 percent by making Rs3100 billion as base for next fiscal year,” said an official of the FBR. He hoped that FBR would achieve the tax collection target of Rs3104 billion set for the outgoing year 2015-2016. The Federal Board of Revenue (FBR) has collected Rs2345 billion taxes during first ten months (July-April) of the ongoing financial year 2015-2016. The FBR would have to collect Rs759 billion in remaining two months (May and June) of the outgoing financial year to achieve the annual tax collection target of Rs3104 billion.

The official informed that government would start finalizing the revenue generation measures after completion of talks with International Monetary Fund (IMF), currently continuing in Dubai. However, he said that the government would continue its policy to tighten the noose around the rich and wealthy non-taxpayers in the upcoming budget in a bid to broaden the extremely low tax base of the country. The policy of differential rate of taxes for filers and non-filers would continue, as it is helping the government to broaden the tax base of the country.

The sources informed that government would focus on the sectors, which are not contributing significantly to the exchequer but they are taxed.

The government had already decided to continue with imposition of super tax on affluent and rich individuals, association of persons and companies earning income above Rs500 million in next budget to rehabilitate the temporarily displace persons (TDPs) of the operation Zarb-e-Azb. The government will imposed a temporary 4 per cent super tax on all banks and 3 per cent on other companies and individuals with an annual income of over Rs500 million.