According to sources, the Federal Board of Revenue (FBR) has drafted proposals for the budget 2021-2020, which focuses on the simplification of laws and the elimination of irregularities in the tax system.
According to the Dawn news, an FBR official told Dawn that there were unconfirmed reports that the government was likely to announce a ‘tax-free budget’.
Side Note: Read a 5-step guide about filing taxes for dummies.
He added that the final decision in this regard would be taken after Eid-ul-Fitr in consultation with the International Monetary Fund (IMF).
In addition, Finance Advisor Dr. Abdul Hafeez Sheikh has already termed next year’s budget as ‘Corona Budget’. However, it depends on the IMF whether it will consider Pakistan’s proposal for a lower tax target for the tax year 2021. The IMF had proposed a tax target of Rs 51 trillion for next year, which will be Rs. 30 times more than what was offered in 2020.
For this year, the IMF has lowered the FBR’s tax target from 48 trillion to 39 trillion due to the effects of the coronavirus on businesses.
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He added that achieving this benchmark also depends on improving business activity before and after Eid and throughout the month of June.
Another senior tax official told Dawn that IMF officials would meet with the Pakistani economic team to determine the direction of the next budget, whether it would be tax-free or some tax would be levied to achieve next year’s target.
The official said the FBR had completed work on next year’s budget proposals and was now identifying irregularities to eliminate them.
“We are also working to simplify and simplify tax laws for the convenience of taxpayers,” he added.
The official said the FBR is also working with all stakeholders to identify tax issues.
“We will also consider tax breaks for some sectors in the next budget to help them revive their businesses,” he added.