The budget 2021-22 will have an ill omen for the pensioners as the government is likely to tax them, said Federal Board of Revenue (FBR) sources on Sunday.

They said that there is a proposal to slap 7 percent tax on the pensioners as a result of which more than 150,000 will face a cut in their old age benefit.

There is also a proposal to tax provident fund, graduity, and other perks being paid to a government retiting servant provident, sources added.

They said tax on pensioners has been proposed by the global donor agency International Monetary Fund (IMF).

An estimated Rs400 billion have been allocated for pensions in the upcoming budget, they said and added that taxing the pensioners will bring in more than Rs18 billion in revenue for the federation.

A final decision in this regard will be made by the Ministry of Finance and the FBR before the budget, they concluded.

TALKS WITH IMF: Meanwhile, Pakistan and the IMF have been working to resolve the differences over new taxation measures amid the government’s willingness to increase sales tax rate on fertiliser to 10 percent and slap 17 percent tax on import of crude oil to generate Rs115 billion, it is learnt.

There is also a proposal to tax interest income under normal tax regime, instead of charging a maximum rate of 15% that is at the lower end.

The talks between the IMF and Pakistan will continue next week.

The sources said that if the issues could not be settled at the level of Finance Minister Shaukat Tarin and IMF’s Mission Chief Ernesto Rigo, Prime Minister Imran Khan may talk to IMF Managing Director Christalina Georgieva next week.

The author is a business correspondent based in Islamabad.

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