That noted economist Dr Hafiz A Pasha could turn any dry and drab talk into an erudite discussion is a fact. His latest op-ed for Business Recorder “Shortfall in revenues” is, in my view, a strong case in point. According to him, for example, “there is need now to run to other sources of revenue, especially the petroleum levy and provincial taxes.

The former revenue source yielded only Rs 47 billion in the first quarter of 2022-23, as compared to the big annual revenue target of Rs 855 billion.” Later, Dr Pasha told this newspaper in an interview that contingency taxation measures as agreed with the International Monetary Fund (IMF) under the 7th and 8th review of the Extended Fund Facility are likely to be taken due to an overall shortfall in the revenue collection during the current fiscal year.

Be that as it may, the point that I seek to emphasise is that missing a revenue collection target does not necessarily reflect a downside of Pakistan’s economy. What actually has been harming or greatly contributing to its fiscal deficit is government’s spending, particularly the current expenditure. The PTI government, too, had failed to rein in its current expenditure.

But it had been successfully achieving its tax collection targets. In the case of incumbent PML-N-led coalition government, the situation is quite different as the irony is that it has performed in both the key fiscal areas – revenue collection and current expenditure – quite badly. Although Dr Pasha has been found to be prudent and cautious in his analysis of the situation because of whatever reasons, I wholeheartedly recognise the truth in what he has written.

Mehdi Masood (Karachi)

Copyright Business Recorder, 2022

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