ISLAMABAD In order to enhance the tax to GDP ratio up to 10.3 percent, the government is likely to set tax collection target at Rs 1711 billion for the coming financial year as agreed upon with the International Monetary Fund (IMF) under the tax to GDP ratio improvement programme. According to the document available with TheNation, the government is targeting to enhance the tax to GDP ratio to 10.3 percent in the coming fiscal year 2010-11 from the existing 9.3 percent. In order to achieve 10.3 percent tax to GDP ratio, the revenue target should be fixed at Rs 1711 billion for 2010-11. It is worth mentioning here that the government has to increase the tax to GDP ratio up to 15 percent in next few years under the agreement with IMF for the standby loan programme. The government has forecast to increase the tax to GDP ratio to 10.3 percent in the fiscal year 2010-11, 11.2 percent in 2011-12, and for in 2012-13 it had forecast 12.1 percent tax to GDP ratio. Pakistans tax to GDP ratio is lowest among the developing countries and IMF has asked the government to increase it. However, sources were of the view that the Revenue Advisory Council (RAC) would finalise the revenue target in next few weeks. They will consider three targets including Rs 1665 billion, Rs 1670 billon and Rs 1711 billion for the tax target for upcoming financial year. The sources believed that RAC is likely to set Rs 1711 billion tax target. RAC would start preliminary discussion on the budgetary proposals for 2010-2011 keeping in view the current pace of revenue collection during 2009-2010. The RAC will also discuss the estimation of the revenue implications of introduction of the VAT. According to the documents, the government plans to introduce further revenue measures including introduction of Value Added Tax (VAT) from July 2010 replacing General Sales Tax, as through VAT extra revenue could be generated through systematic documentation of the economy. Under VAT, all the tax exemptions would be removed besides imposing taxes on the goods, which are presently not in the tax net. Similarly, the services sector will also be brought in the tax net in order to broaden the tax base. The government will also continue its tax administration reforms in the coming fiscal year, as this will improve efficiency, integrity, transparency and prevention of revenue leakages.