The government can set a new tax target of over RS14.3 trillion, which is higher with RS2 trillion over the downward target of this fiscal year and may require at least RS500 billion in further measures to achieve it.

After performing the new tax measure for the financial year 2025-26, the government has begun the exercise for card list measures, which it should show that RS14,307 trillion goals are realistic and achievable.

Finance Minister Muhammad Aurangzeb is expected to hold his second budget speech either on June 2nd or June 3 before Eid holidays.

RS14,307 trillion targets equal to 11% of the next financial year’s expected size of the economy.

A senior official in FBR told Express Pakinomist that the absolute tax measure may change, depending on the size of the economy, but 11% of the GDP number would be the target.

The development came when the deadline to inform companies to accept or reject their budget proposal has lapsed. The government had invited proposals from various chambers and business associations in January with a promise to respond to them at the end of April about how many of them can be accepted realistically.

When contacted, Finance Minister Muhammad Aurangzeb said the review of the budget proposals was underway as these proposals are still coming in.

RS14,307 trillion for the financial year 2025-26, which starts from July, is preliminary and subject to the approval of the International Monetary Fund visiting Pakistan from May 14 to cultivate the budget.

RS14.3 trillion targets are 16% or RS2 trillion more than this year’s RS12.3 trillion downward targets, the government’s sources say. It is also higher than the figure that FBR threw himself to the Minister of Finance, which was significantly less than the goal that the government wants to set for the tax machine.

For this financial year, the government had set the original tax target of almost RS13 trillion or 10.6% of GDP. Due to lower inflation and lower economic growth, the target downward has been revised to RS12.3 trillion, but it remains constant at 10.6% of GDP.

The sources said the authorities will have to take approx. RS500 billion worth new tax measures to make the next goal realistic and to end any uncertainty associated with it. These measures would come beyond RS1.3 trillion additional taxes imposed on the people, mostly in the grade, to achieve this year’s goal.

Despite having put an extraordinary burden on the people, FBR has so far been exposed to the tax shortage of the RS830 billion, which emphasizes that the economy’s ability to pay more is eroded without expanding the base. What is equal to a mini-budget, the government has already increased the oil tax rate by RS18 to RS78 per year. Liter under different pretext to offset the impact of FBR deficit.

FBR chairman Rashid Langrial said Wednesday that next year’s budget would be tough in terms of reaching tax goals, warning the people of the upcoming tax measures.

Oicci -Budget Proposal

Meanwhile, Finance Minister Muhammad Aurangzeb held a meeting with the overseas investor chamber for trade and industry (OICCI) to discuss his budget proposals. OICCI was not informed of whether any of its proposals would be accepted.

The association has proposed the government to withdraw RS5,000 currency notes to deter cash economy. The size of the informal economy is estimated at least 40% of the formal economy, but the government does not seem serious to crack down on the informal economy.

OICCI also recommended to exempt the chemical dealers from 2% withholding tax charged from distributors on supplies to dealers.

In an important proposal, the association has also required to abolish 10% supplements of individuals earning RS10 million or more on compatible taxpayers as it puts an unfair burden on ordinary filers.

Pakistan’s highly marginalized grade paid RS391 billion in taxes in just ten months. The grade paid 10% of the total income tax paid by the entire Pakistan compared to 0.6% paid for by blue -eyed dealers.

OICCI has recommended the government to exempt up to RS100,000 monthly income from SKAT, which is justified demand in view of people’s rapid eroding of purchasing power. It has suggested that the government, in order to preserve the number of filers, can impose RS1,000 token tax for income over RS600,000 to RS1.2 million annual income.

It has also required tax credit for deductible quotas for home loans, education and medical expenses. OICCI has recommended to limit the taxation of company contributions to Provident Fund to 10%, eliminating the RS150,000 ceiling.

It has also sought specific exception of capital value tax of% on foreign assets for abroad Pakistanis who return and foreign nationals who become resident employees.

In a major proposal, OICCI has demanded to reduce the corporate tax rate gradually from 29% to 25% through an annual reduction of 1% to adapt to other new economies. It has sought the abolition of the super tax gradually over three years in the first phase, cutting from 10% to 6% from July.

OICCI has demanded the abolition of 15% income tax against payment of dividends, which takes the rate to 64% for some companies.

OICCI has also required to reduce the turnover tax to 17%, which the government may not accept because of its biggest buck on the budget.

The association has asked to declare petroleum products as taxable supplies that allow adjustments to input tax, but FBR showed reluctance due to the IMF program.

It also rightly required to reduce the tax on packed milk to 5% from 18% to encourage growth in the dairy sector, which improved nutrition and affordable prices for the public. In another major proposal, OICCI has asked to restore zero assessment of VAT on local supplies under export facilities (EFS) by withdrawing 18% GST. The IMF is not to withdraw this treasure.

OICCI has asked to reduce the federal excise duty on aired waters to 18% and juice to 15%, which has affected the growth of these companies.