[Dawn 20 April, 2019]

[Dawn 20 April, 2019]

ISLAMABAD: The government has given an understanding to the International Monetary Fund (IMF) to move to a single value-added tax (VAT) regime in the country as part of an overall medium-term macroeconomic framework envisaging Rs1.25 trillion incremental federal and provincial revenues.

This would mean an additional revenue effort matching about 2.6 per cent of GDP (gross domestic product) over a period of three years. Federal taxes are committed to be increased by 2.3pc (about Rs1.08tr) during the three-year reform process under the IMF programme, starting with 1.1pc of GDP during the fiscal year 2019-20. This will be followed by 0.9pc of GDP additional revenue generation in FY21 and 0.3pc in FY22.