FBR achieves target of Rs.1,588 billion

FBR achieves target of Rs1,588 billion

Friday July 01, 2011 (1229 PST)

Email Most Popular Print Add to Favorite ISLAMABAD: Pakistan’s tax authorities have crossed the revised tax collection target of Rs1,588 billion and displayed Rs1,590.462 billion in the outgoing fiscal year that ended on June 30, 2011. This has made the FBR chairman confident of the revival of the $11.3 billion IMF-sponsored programme which has been halted for 13 months. “Achieving the revenue target of up to Rs1,590 billion will ensure revival of the IMF programme,” Chairman FBR Salman Siddique said while addressing a press conference on Thursday night at the FBR headquarters. The IMF programme of Standby Arrangement (SBA) for Pakistan has been suspended since May 2010 and Islamabad failed to obtain any tranche after the completion of the fifth review. Flanked by FBR’s Member Inland Revenue Khawar Khursheed Butt, Member Customs Mumtaz Haider Rizvi, Member Israr Rauf, and spokesperson Rifat Qazi, the FBR chairman said that the fiscal deficit was the main concern of the IMF and other donors and improved tax collection and excellent expenditures management would enable Islamabad to restrict its deficit in the range of 5.2 percent of GDP. “The tax to GDP ratio will be standing at 9.2 percent with FBR’s collection of Rs1,590 billion and will go up to 9.3 percent if the board achieves Rs1,600 billion,” he said, and added that taxpayers were allowed to deposit their due taxes till midnight so the FBR expected a few billion more to land up in the national kitty. Answering another query about the allegation of advance tax collection used for crossing the target, FBR chairman said that the board itself would conduct audit to ensure that the figures were correct. “We are under the IMF programme and they will analyse the numbers with the help of their experts,” he maintained. “I can guarantee that nothing like this happened this year.” In the last financial year, the FBR collected advance taxes worth Rs5 billion to show achievement on revenue collection front. However, another top official of the government’s economic team told our sources that the country achieved its desired fiscal deficit target of just over 5.2 percent of GDP or Rs959.3 billion for outgoing fiscal year ending June 30, 2011. The fiscal deficit shot up by 0.2 percent of GDP because the US did not provide its committed amount of $381 million under the Coalition Support Fund (CSF). It was envisaged by the government that the budget deficit would be restricted at 5.1 percent of GDP or Rs916 billion but slippages on the CSF front paved the way for further spike in deficit between 5.2 to 5.3 percent of GDP. “We have fulfilled our commitment to bring borrowing from SBP to zero at the end of the fourth quarter (April-June) period by paying back Rs156 billion. It was the condition of the IMF under the $11.3 billion SBA programme that Pakistan would have to bring down borrowing from SBP to zero by end of every quarter of the fiscal year,” he said. The IDB’s loan of $160 million was dropped because the government managed to achieve its FBR’s tax target of Rs1,588 billion. The provinces also generated the desired revenue surplus of Rs120 billion because the WB loan of $162 million for health and education sectors in Punjab and Sindh could not be spent in a single day, paving the way for achieving the desired revenue surplus. “We have also received $200 million from ADB under the second generation reform project for SECP,” claimed the top official and added that everything went very well and with God’s blessing the final numbers of the fiscal deficit might slightly improve against the aimed target of 5.3 percent of GDP. The reconciled accounts will be made available after July 15, 2011 and IMF’s mission led by Adnan Mazarei will then hold crucial talks in the third week of July to explore the possibility of reviving the Fund’s SBA programme which was suspended in May 2010. End.