Key Takeaways
- The government has proposed a new local tax for Islamabad residents if the city becomes a separate province.
- The tax aims to fund public services and infrastructure in the capital.
- The proposal will be reviewed by a subcommittee and then presented to the Planning Minister and Prime Minister.
The government has proposed a new local tax on Islamabad residents if the federal capital is made a separate administrative unit, according to sources in the Ministry of Finance.
The proposed tax is intended to generate revenue for running public services and the administrative system in Islamabad, which would be spent on hospitals, schools, welfare programs, and other infrastructure.
The government plans to include the tax in next year’s budget but has not yet determined the exact amount of revenue needed.
The proposal will first be reviewed by a subcommittee examining taxation issues linked to Islamabad’s proposed new status, and then it will go to a committee headed by Planning Minister Ahsan Iqbal and then Prime Minister Shehbaz Sharif.
A final decision on the tax is expected after discussions with the International Monetary Fund (IMF) during its upcoming review talks with Pakistan.
The government hopes that the new tax will help ensure the financial sustainability of the proposed administrative setup in Islamabad.
The proposal is part of a broader effort to address the financial challenges associated with the potential status change of Islamabad.
