Pakistan’s finance minister, Ishaq Dar, will announce the federal budget for 2023-24 later this week, during one of the country’s worst economic crises. There are concerns about the government’s ability to offer any significant relief given its lack of fiscal resources and commitment to an International Monetary Fund bailout programme. The IMF has asked for structural reforms, rather than non-targeted subsidies, and there is no sign of a reversal anytime soon. With debt servicing and other demands on the budget likely to make meaningful aid impossible, the government may turn its attention to increasing revenues by targeting the corporate sector. However, this approach could harm economic growth and is unlikely to improve Pakistan’s dwindling foreign exchange reserves or the country’s balance of payments. Experts expect the government to increase fuel duty and excise tax, and federal revenue from increased taxes could stem from sources such as Pakistan’s petroleum development levy or the State Bank of Pakistan.
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