The federal government is working on a mini-budget to raise at least Rs50 billion for flood rehabilitation and to cover a growing tax shortfall. Officials confirmed that new levies on cigarettes and luxury goods are being prepared.
Under the proposed mini-budget, additional duties will apply to imported vehicles, cigarettes, and electronic items. A levy similar to the regulatory duty reduced in June may also be reintroduced on imported products.
According to the Federal Board of Revenue (FBR), a five per cent duty on electronic goods is under review. The final price threshold for this tax has not yet been set.
The mini-budget also proposes a levy on luxury cars with engines of 1,800cc and above. Officials, however, said these measures will need approval from the International Monetary Fund (IMF) before implementation.
In addition, the government is considering a Rs50 levy on every pack of cigarettes. Unlike other taxes, this money will go directly to the federal government and will not be shared with provinces.
The urgency behind the mini-budget comes from a serious revenue gap. In August, the FBR collected Rs901 billion against a target of Rs951bn, leaving a Rs50bn shortfall.
From July to August, tax revenue fell nearly Rs40bn below expectations. The overall target for FY2025 is Rs14,131bn. Officials pointed out that the shortfall is tied to floods, lower consumption of electricity and gas, and slow business activity.
The government hopes the mini-budget will help bridge the gap and support recovery efforts in disaster-hit regions.