KARACHI: Revenue collection in November grew by 17 per cent compared to last year to touch Rs334 billion, according to Federal Board of Revenue (FBR) Chairman Shabbar Zaidi in a late afternoon tweet after monthly figures had been compiled. The figure is still short by Rs48bn from the November target, causing the overall revenue shortfall this fiscal year to climb to Rs211bn.
Collection in the period July to November hovered around Rs1.618 trillion provisionally where the target for the period is Rs1.830tr. The growing shortfalls are fuelling concern within certain sections of the business community that the government could resort to further taxation measures, a mini-budget, in order to bridge the shortfalls before the end of fiscal year. The government acceded to a very challenging revenue target of Rs5.5tr in the last budget, up from Rs3.829tr collected last year.
Income tax collection has been recorded at Rs573bn provisionally, against a target of Rs627bn, showing a shortfall of Rs54bn. Thus far reports say the FBR has received 1.59 million income tax returns, far higher than the same period last year, but they suggest another million people who filed returns last year have still to file this year. As a result, the FBR announced an extension in the return filing deadline to Dec 15.
Non-tax revenues jump on the back of State Bank profits
Sales tax collections have been recorded provisionally at Rs715bn where the target was 754bn, showing a shortfall of Rs39bn. The figure is higher by Rs200bn from last year’s sales tax collection in the same period; though industry leaders say the figure has been buoyed largely by withholding sales tax refund claims of exporters.
Customs duties missed their target by Rs76bn, coming in around Rs260bn, hit largely by collapsing imports.
Meanwhile, the government claimed success in its efforts to stabilise the economy and said the primary balance in the fiscal accounts, which excludes debt service payments from expenditures, are now in surplus along with the current account deficit.
Pakistan “has recorded lowest first quarter fiscal deficit in 13 years” tweeted Minister Economic Affairs Division Hammad Azhar on Saturday night. “The Current Account is in surplus after four years. Foreign Portfolio Investment has returned to the country after three years. Stock market is up 11,000 points since Aug 19. Pakistan has climbed 28 places in EoDB [Ease of Doing Business] index.” He also claimed that the country has never seen “an economic crisis of the magnitude as the PML(N) left the country with in 2018. And never has [Pakistan] witnessed a more remarkable turn-around from economic crises towards stabilisation as the one achieved by PTI in its first 15 months.”
Fiscal operations data for the first quarter released by the finance ministry showed a surplus in the primary balance of Rs286bn, or 0.6pc of GDP. The overall fiscal deficit – expressed as the difference between total expenditure and total revenue, however, was recorded at Rs286bn as well. In the same quarter last year, the fiscal deficit was recorded at Rs541.677bn.
Revenues were buoyed by a massive hike in non-tax revenues in the first quarter that ran from July to September, jumping from Rs126.89bn last year to Rs346.14bn this year. This accounts for more than 56pc of the incremental revenues collected in first quarter this fiscal year compared to the same period last year. The largest collection in non-tax revenues came from State Bank profit, which grew by Rs135bn, coming in at 0.8pc of GDP compared to 0.3pc in the same period last year. In terms of percentage of GDP, all other revenue heads showed no change from their level last year.
Published in Dawn, December 1st, 2019