IMF demands 18% GST on petroleum products and solar systems

ISLAMABAD: The IMF has proposed an increase of more than Rs 1,600 billion in the tax target for the next fiscal year.

According to which, the current zero percent rate of GST on petroleum products should be increased, while 18% tax should be imposed on solar system users. The organization has also demanded the abolition of tax exemptions given on new homes.

The international financial institution has also directed to impose asset-based tax on small businesses and traders. The tax target in the new budget has been proposed to be kept at more than Rs 15,600 billion.

Last year’s tax target was Rs 14,131 billion, which was reduced to Rs 13,979 billion, but a decrease of Rs 428 billion was revealed in 8 months.

According to officials of the FBR, the decrease in tax collection in the first 9 months of the fiscal year is expected to be more than Rs 600 billion. So far in March, Rs865 billion has been collected, while the target was Rs1,367 billion. Imports were affected and business activities declined due to expensive oil and the world war.