ISLAMABAD:The International Monetary Fund’s $7 billion bailout package largely remained on track during the first nine months of this fiscal year, as the federal and provincial governments met three out of five major fiscal conditions, with the Federal Board of Revenue (FBR) remaining the only weak link.
The FBR missed its two key conditions of collecting Rs9.17 trillion total revenues and Rs36.7 billion from retailers under the Tajir Dost scheme during July-March period of this fiscal year, showed the fiscal operations summary released by the Ministry of Finance on Wednesday.
The IMF has set multiple fiscal conditions, whose successful completion has so far helped smooth continuation of the programme despite initial setbacks. In spite of achieving critical revenue targets, the federal government’s net revenues were still Rs394 billion less than its needs for just two heads; interest payments and defence spending, according to the Finance Ministry.
The fiscal operations’ summary showed that Pakistan met the IMF targets for a primary budget surplus by the federal government, as well as net revenue collection and cash surplus targets by the four provinces.
Against a primary surplus target of Rs2.7 trillion, the federal government reported a surplus of Rs3.5 trillion, or 2.8% of gross domestic product (GDP). This higher surplus was primarily due to fully booking the annual central bank profit in the first quarter, with the entire estimated profit of Rs2.5 trillion already accounted for.
The four provinces collectively generated a cash surplus of Rs1.028 trillion, exceeding the IMF target by 25 billion. The federating units also generated Rs685 billion in tax revenues, surpassing the IMF target by Rs79 billion.
The Finance Ministry said that the provincial tax collection “strong performance was primarily driven by the governments of Sindh, Khyber Pakhtunkhwa (K-P), and Balochistan”. It did not mention Punjab government in the statement.
The ministry further stated that non-tax revenues of the provinces reached to Rs203 billion, surpassing the target of Rs160 billion by Rs43 billion. This achievement reflects the collective efforts of all provincial governments in enhancing non-tax revenue streams, it added.
The federal government’s tax revenue performance was below the mark. The FBR failed to collect any significant revenue under the Tajir Dost Scheme against the target of Rs36.7 billion for nine months. The traders’ income tax contribution through withholding taxes too remained negligible compared to salaried class’s Rs391 billion payments in nine months.
