The IMF has suggested granting the Federal Board of Revenue (FBR) the authority to collect provincial taxes as part of a proposed loan program for Pakistan. The goal is to improve transparency in provincial spending and enhance the ability of provinces to collect taxes. Sources in the Ministry of Finance revealed that the IMF has requested new proposals to ensure transparency in provincial spending for the upcoming program. Digitizing both federal and provincial budgets for the next fiscal year has been recommended by the IMF to help monitor revenue and expenditure discrepancies. Furthermore, the IMF has urged the FBR to take on the responsibility of collecting provincial taxes, citing challenges faced by provincial authorities in tax collection. It’s noted that provincial governments have struggled to establish mechanisms for collecting agricultural income taxes over the past 16 years. There is significant pressure from the IMF to include the agricultural sector in the tax net, with the expectation that doing so will significantly boost tax revenues. All provincial governments are said to be ready to fully cooperate with the proposed IMF program. “Budget digitization” refers to the conversion of traditional paper-based budget documents and processes into digital formats, utilizing digital tools and technologies for budgetary management and analysis.
