User Rating: / 2
PoorBest 

  By virtue of agriculture being a provincial subject, each province has in place a presumptive regime for the collection of income taxes from this sector. Going by the dictionary of Provincial laws, agricultural income consists of rents received from property used for agricultural purposes and income derived from cultivation or from owner-occupied buildings on the property. However, the quantum of revenue generated through these taxes has so far been paltry. Official data show that in FY06, total revenue collected under this head by Punjab made up only 2.1 percent of the total revenue generated by the provincial government and the contribution of agricultural income tax in other provinces is equally dismal. Lack of oversight and unjustifiable exemptions are among the biggest reasons behind the insignificant contributions to revenue from the agriculture sector, despite its significant contribution to the economy. According to the Agriculture Census 2000, 85 percent of the total cultivable land in ...

User Rating: / 2
PoorBest 

  The Asian Development Bank has reinforced what many economists in the country already feared: an impending economic fiasco, with fiscal problems leading the way. The report, titled “Asian Development Outlook 2011”, recalled the fiscal faux pas committed by the country’s government, with the fiscal deficit widening from 5.3 percent of GDP in FY09 to 6.3 percent in FY10. The decline in tax revenues is largely to be blamed for the deterioration of the fiscal position, with the tax-to-GDP ratio hitting a 30-year low of 9 percent in FY10. The expenditure side also played its part, with rigid budgetary outlays (interest, security, pension payments) taking up 82 percent of FBR’s tax receipts. The overrun had to be covered via a drop in public sector development programme (PSDP), while loss-making SOEs continued to wreak further havoc. Another key area warranting particular attention is the debt quandary of Pakistan. While the government’s domestic debt stood at a ...

User Rating: / 1
PoorBest 

  The macro headlines have been turning positive: inflation is down and is expected to remain below 14 percent for the next two months; the external account is doing unexpectedly well; and more importantly, the government is keeping its promises made to the SBP. Two months back, Kardar was optimistic that the Ministry of Finance will abstain from inflationary borrowing from the central bank while the government will implement some austerity measures. Today, (as of March 12 to be precise) the government borrowing from the SBP is at Rs110 billion -- below the assured levels of September-end. The Finance Minister, after a long deliberation with IMF’s team, has also been able to convince President Zardari to take some revenue enhancement as well as expenditure curtailment measures for the rest of the fiscal year. The presidential ordinance came despite tough political opposition -- both from within the party and from the coalition partners. The current ...