ISLAMABAD, Jan 11: The government is facing a total revenue shortfall of more than Rs102 billion in first five months of the current fiscal year owing to major slippages on both tax and non-tax revenue estimates.

A senior finance ministry official said the non-tax revenue in first five months (July-November 2012) amounted to Rs267 billion against an annual target of Rs730.33 billion. By this time, the non-tax revenue should have earned Rs304 billion. The average monthly yields from non-tax revenue in first six months stood at Rs53.4 billion instead of Rs61 billion per month estimates set in the federal budget.

The official said it was unrealistic to take monthly averages in non-tax revenue as slippages because revenue inflows could be erratic depending on their recovery schedules but conceded that a big ticket item of Rs80 billion in the form of profits from Pakistan Telecom Authority (proceeds from auction of third generation) were unlikely to materialise during the current fiscal year.

Likewise, the tax revenue collection in first six months amounted to about Rs915 billion, about Rs60 billion short of half yearly target.

With this pace of revenue collection, the government was likely to face a tax shortfall of over Rs200 billion against its target of Rs2.381 billion unless its tax amnesty scheme was successful as claimed by the tax authorities.

Giving break up of the non-tax revenue, the official said a major inflow of Rs109 billion ($1.2 billion) came from the United States against defence services provided to coalition forces in Afghanistan. This did not include Rs67 billion ($688 million) from CSF flows transferred to Pakistan in the first week of January 2013.

Another major contribution of Rs50 billion came from the State Bank of Pakistan as government’s profit, followed by Rs23 billion each from royalties on gas and dividends from public sector enterprises. The gas surcharge and cess earned another Rs17 billion, followed by Rs8 billion as windfall levy on petroleum products and Rs6 billion as discount on locally produced crude oil. Rs5 billion were earned as passport fee while provincial governments paid Rs6 billion as interest on federal loans and advances.

The government had set a target of Rs730 billion for non-tax revenue for the current fiscal year. Besides Rs80 billion profit from PTA, the government had estimated to earn Rs200 billion as central bank profit, Rs150 billion from defence services (mostly CSF payments), Rs65 billion proceeds from dividends earned from government shares in public sector entities.

The target for non-tax revenue from passport fee was set at Rs15 billion in the budget, besides Rs31 billion from GDS, Rs22.5 billion each on discount retained on crude oil and royalty on crude oil. Royalty on natural gas and gas development infrastructure cess proceeds were estimated at Rs36 billion and Rs30 billion respectively.

Officials said that owing to slippages both on tax and non-tax revenue were partly offset by higher than projected inflows from the United States under CSF but even then the five month fiscal deficit had been estimated at about 2.7 per cent.

A senior government official said the government was working closely with the International Monetary Fund (IMF) to have breathing space during the upcoming political transition.

He said the visiting IMF delegation was being given a clear picture of the macroeconomic indicators to work out an acceptable programme to sail through the political transition.

He said three governments were going to change hands in a short period of time i.e. the current government, the interim government and the next democratic government and the IMF and the United States appreciate that some kind of cooperation was a must to avoid a bumpy transition.