The government intends to implement a mini-budget to address flood relief and tax revenue deficits.

The federal government is poised to unveil a mini-budget intended to generate a minimum of Rs50 billion to aid in the rehabilitation of flood victims and to mitigate an expanding tax deficit.

Authorities have verified that new taxes on luxury goods and tobacco products are being contemplated.

The proposed mini-budget aims to levy supplementary taxes on luxury automobiles, tobacco products, and imported electronic items. A fee comparable to the regulatory duty that was diminished in June may potentially be reimposed on imported goods.

Federal Board of Revenue (FBR) authorities indicate that a five percent tax on electronic goods is now under examination. The price threshold for this tax has not yet been determined.

Taxes on luxury automobiles and tobacco products

The proposal additionally involves a tax on premium automobiles with engines of 1,800cc or greater. Officials indicated that approval from the International Monetary Fund (IMF) is necessary prior to the implementation of such tariffs.

The government is contemplating the implementation of a Rs50 tax on every pack of cigarettes. This charge, unlike other revenue streams, would not be allocated to the provinces and will be sent solely to the central government.

Deficiency in tax revenue

The necessity for the mini-budget arises due to a substantial income deficit. The FBR announced that in August, Rs901 billion was collected, falling short of the Rs951 billion target by Rs50 billion.

Between July and August, tax collection decreased by approximately Rs40 billion relative to forecasts. The total income objective for FY2025 is Rs14,131 billion. Officials indicated that flooding, diminished energy and gas consumption, and lackluster commercial activity have impeded collection efforts.