ISLAMABAD: Contingency tax measures as agreed with the International Monetary Fund under seventh and eighth reviews of the Extended Fund Facility (EFF) may be taken due to overall revenue shortfall in the current fiscal year. This was stated by former finance minister Dr Hafeez Pasha while talking to Business Recorder. He said that Rs800 billion shortfall in overall revenue collection would necessitate triggering contingency tax measures committed to the IMF.
Pasha projected the Federal Board of Revenue (FBR) shortfall for the entire year at Rs 400 billion based on the fact that the government had budgeted a 26 percent growth in tax revenue whereas 16 percent growth was recorded in the first five months. Additionally, contraction in imports would also contribute to a shortfall in FBR revenue collection.
Pasha projected a shortfall of Rs 250 billion on account of petroleum levy (listed under other taxes) due to a 15 percent decline in consumption of petroleum products in the country.
Against the required growth of 30 percent in sales tax on services by the provincial governments, only 9 percent growth was witnessed in the first five months of the current fiscal year which would lead to a shortfall of Rs 150 billion in sales tax collection on services.
The Finance Ministry’s consolidated budgetary operation of the federal and provincial governments reveals a significant shortfall on account of non-tax revenue in the first quarter of the current fiscal year.
Non-tax revenue collection declined by 16.29 percent in the first quarter of the current fiscal year as opposed to the same period a year before, mainly attributable to the absence of any surplus by the State Bank of Pakistan (SBP). This data was revealed in the consolidated budgetary operation of the federal and provincial governments for the first quarter – July-September 2022.
The surplus profit of the SBP during July-September 2022 was zero against Rs109 billion for the same period a year before. Thus total non-tax revenue collection was squeezed to Rs202.159 billion during the period under review from Rs241.536 billion for the same period of last fiscal year. Mark-up collection (PSEs and others) of Rs28.844 billion during the period under review against Rs19.484 billion for the same period a year before and a dividend of Rs24.651 billion in 2021-22 against Rs1.903 billion in the current year.
The gas infrastructure development cess collection during the first quarter of the current fiscal was Rs3.007 billion as opposed to Rs6.530 billion during the same period a year before. Natural gas development surcharge collection stood at Rs5.485 billion this year against Rs4.797 for the same period a year before.
Copyright Business Recorder, 2022
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