ISLAMABAD: The government has made several changes to next fiscal year`s budget, including fiscal tightening measures dictated by the International Monetary Fund (IMF) in a last-ditch efforttosecure criticalfunding.

`Pakistan and IMF had detailed negotiations for thelastthreedaysasalast effort to complete the pending review,` Finance Minister Ishaq Dar told the house as he unveiled the changes on Saturday.

He said the government now aims to generateanother Rs215 billion in taxes and cut spending by Rs85bn in the next fiscal year, without reducing the federal development budget or the salaries and pensions of government employees.

This will revise the government`s revenue collection target to Rs9.415 trillion and put total spending at Rs14.48tr, he said.

The share of the provinces would be increased to Rs5.39tr from Rs5.28tr.

He hoped these and several other changes `will make our fiscal deficit much better` and insisted that the government had ensured that the new taxes would not affect the poor.

Mr Dar said the government had also lifted import restrictions enforced in December to cut the current account deficit, which has been one of the major concerns by the IMF to release the funds.

He said the allocation for the Benazir Income Support Programme was also revised from Rs450bn to Rs466bn for FY24.

Besides, the petroleum development levy would be raised from Rs50 to Rs60 per litre.

The changes in thebudget came a day after Prime Minister Shehbaz Sharif met IMF Managing Director Kristalina Georgieva on the sidelines of the Global Financing Summit in Paris.

The Fund`s ongoing loan programme agreed in 2019 is set to expire onJune 30. Under the $6.5bn facility`s ninth review, negotiated earlier this year, the country has been trying to secure $1.1bn of funding stalled since November.

Mr Dar said that for the past few months, the nation was questioning whether the IMF`s ninth review would be successful or not, adding that he wanted to take the people into confidence on the matter. `I hope, God willing, that we will have an agreement with the IMF, he said.

When Mr Dar presented the budget on June 9, he announced new revenue measures of Rs215bn in addition to all taxes worth Rs500bn introduced in a minibudget in mid-February.

The sum of new tax measures for the coming fiscal year now stands at Rs938bn.

The government hopes to achieve a 28pc higher revenue target for the next fiscal year based on projected economic growth of 3.5pc, average inflation of 21pc and revenue measures.

The autonomous growth in revenue to come from GDP growth and inflation is projected at Rs1.76tr in the next fiscal year.

The total outlay of the budget will now be Rs14.48tr.

Mr Dar said the government had de cided to keep the super tax intact, along with the 0.6pc tax on cash withdrawals from banks.

He explained that the newly introduced Section 99D in the Income Tax Ordinance was designed to enable a tax rate of up to 50pc on unexpected gains resulting from external factors.

He specifically mentioned that banks fell into this category and might be subjected to this taxation.

He clarified that this tax applied only to the corporate sector and notto individuals.

Besides, a federal excise duty of Rs2,000 on inefficient fans will now be imposed six months later, i.e.

from Jan 1, 2024.

Mr Dar said this would give manufacturers some time to transition to more efficient technology.

The government has also formed a new three-member alternate dispute resolution committee.

It will be headed by a retired judge from a high court or the Supreme Court; the other two members will be the income tax chief commissioner, and a taxpayer or their representative.

The committee will work to resolve 62,000 cases involving some Rs3.2 trillion currently stuck in various legal proceedings.

The decisions made by the alternate dispute resolution committee will be binding on the FBR, while taxpayers will have the right to appeal.

Besides, the investment limit in the pension benefit account had been increased to Rs7.5m from Rs5m, he said.

Meanwhile, a statement issued by the ruling PML-N said PM Shehbaz Sharif had held a third meeting with the IMF chief in Paris before his departure for London in which he had reiterated Pakistan`s commitment to complete the Fund`sprogramme.

He said that as part of efforts to complete the review, a technical team from the finance ministry also held meetings with IMF officials over the past three days.

It was agreed to implement additional taxation measures and reduce expenditures.

Though the finance minister announced the new taxes in line with IMF, he provided no details.

It is expected that government will bring further tax amendments in the finance bill on Sunday.

Breakdown of new taxes The government has proposed a five per cent federal excise duty on fertiliser sector to rake in Rs70 billion and would also increase tax on buying and selling of property by 1 pc to generate Rs45 billion.

The income tax rate for salaries above Rs200,000 per month will also go up by 2.5pc; this move would bring in an extra Rs30 billion in taxes. The tax on juices will double from 10pc to 20pc.

The rate of further tax will also go up from 3pc to 4pc, bringing in an extra Rs20 billion.

To address IMF concerns, the government has also proposed to withdraw the dollar tax amnesty scheme that was introduced in the budget speech on June 9.