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Sunday, December 30, 2007
Benazir Bhuttos assassination: Pakistan may miss economic targets
* The country may face Rs 50bn losses
* FBR needs Rs 2.739bn additional receipts per day to meet Rs 1.025tr revenue target
By Sajid Chaudhry
ISLAMABAD: The country may not be able to achieve the economic targets set for the current fiscal year as it has faced around Rs 50 billion revenue losses due to marred economic activities after the assassination of former Prime Minister Benazir Bhutto and during the Eid holidays, a senior official told Daily Times.
Besides long Eid holidays, the government departments have been closed from December 28-30 Sunday (today) as official holidays. This would decrease the overall revenue collection in terms of different taxes including income tax, federal excise duty and sales tax during the last ten days of December causing a loss of around Rs 50 billion, an official said. Official in Federal Board of Revenue (FBR) said that during the last 10 days including Eid holidays and after the assassination of former Prime Minister Benazir Bhutto the country has faced around Rs 50 billion losses and FBR would need Rs 2.739 billion additional receipts per day in the coming days to meet the Rs 1.025 trillion revenue target set for the current fiscal year.
Economic analysts believe that the current negative indicator would continue in future multiplying further losses amounting to billions of rupees in the coming days as the trade and industrial activities are not likely to start soon after the political turmoil followed by (late) Mrs Bhutto. FBR would also lose the collection of income tax, federal excise duty and other levies due to closure of banks and marred economic activities as transportation and telecommunication systems suffered a lot across the country. Official also said that if any delay occurred in the clearance of transshipment goods and cancellation of export orders, it would also cause revenue loss having negative impact on collection.
According to the figures of finance ministry, the total revenue during the first quarter was Rs 312.623 billion out of which collection by FBR stood at Rs 215.578 billion. Petroleum and Gas surcharges yielded Rs 8.77 billion, including Rs 4.151 billion as petroleum development surcharge and Rs 4.626 billion as gas development surcharge. Non-tax revenue stood at Rs 97.035 billion during the period under review.
The FBR official has claimed that during the last some days the sale of petroleum products dropped and the sales tax collection from petrol and other petroleum products would also decrease. The collection of taxes from furnace oil, consumed in industrial units, would also show downward trend.
Experts also believe that the loss in revenue collection may pose a negative impact on the ongoing development programmes and it would definitely affect the Public Sector Development Prgormme (PSDP) spending.
On the other hand the overall budget deficit faced by the federal government had reached Rs 158.056 billion during first quarter of the current fiscal year, which is 39.60 percent of the whole fiscal years target of Rs 398 billion. If the budget deficient further increased in other three quarters of the current year as the increase was realised in the first quarter (40 percent), it would definitely affect the PSDP spending. Officials in the ministry of finance at the moment are proposing some cut in the allocated amount of PSDP to fill the budget gap.
During the current scenario, if FBR fails to achieve the set target of revenue collection, government may face problems regarding the fund generating for the ongoing development projects and government would have to manage financing from different countries and financial institutions to complete projects in stipulated time. Government spent a total sum of Rs 470.679 billion that includes Rs 39.989 billion in non-development expenditure.
The government paid Rs 111.126 billion as interest on local and foreign loans. Out of these, Rs 98.541 billion were spent on servicing of domestic debt and Rs 12.585 billion were spent on foreign debt servicing. Total defense spending stood at Rs 57.546 billion. Development expenditure and net lending during the first quarter stood at Rs 129.817 billion.
Daily Times - Leading News Resource of Pakistan
Benazir Bhuttos assassination: Pakistan may miss economic targets
* The country may face Rs 50bn losses
* FBR needs Rs 2.739bn additional receipts per day to meet Rs 1.025tr revenue target
By Sajid Chaudhry
ISLAMABAD: The country may not be able to achieve the economic targets set for the current fiscal year as it has faced around Rs 50 billion revenue losses due to marred economic activities after the assassination of former Prime Minister Benazir Bhutto and during the Eid holidays, a senior official told Daily Times.
Besides long Eid holidays, the government departments have been closed from December 28-30 Sunday (today) as official holidays. This would decrease the overall revenue collection in terms of different taxes including income tax, federal excise duty and sales tax during the last ten days of December causing a loss of around Rs 50 billion, an official said. Official in Federal Board of Revenue (FBR) said that during the last 10 days including Eid holidays and after the assassination of former Prime Minister Benazir Bhutto the country has faced around Rs 50 billion losses and FBR would need Rs 2.739 billion additional receipts per day in the coming days to meet the Rs 1.025 trillion revenue target set for the current fiscal year.
Economic analysts believe that the current negative indicator would continue in future multiplying further losses amounting to billions of rupees in the coming days as the trade and industrial activities are not likely to start soon after the political turmoil followed by (late) Mrs Bhutto. FBR would also lose the collection of income tax, federal excise duty and other levies due to closure of banks and marred economic activities as transportation and telecommunication systems suffered a lot across the country. Official also said that if any delay occurred in the clearance of transshipment goods and cancellation of export orders, it would also cause revenue loss having negative impact on collection.
According to the figures of finance ministry, the total revenue during the first quarter was Rs 312.623 billion out of which collection by FBR stood at Rs 215.578 billion. Petroleum and Gas surcharges yielded Rs 8.77 billion, including Rs 4.151 billion as petroleum development surcharge and Rs 4.626 billion as gas development surcharge. Non-tax revenue stood at Rs 97.035 billion during the period under review.
The FBR official has claimed that during the last some days the sale of petroleum products dropped and the sales tax collection from petrol and other petroleum products would also decrease. The collection of taxes from furnace oil, consumed in industrial units, would also show downward trend.
Experts also believe that the loss in revenue collection may pose a negative impact on the ongoing development programmes and it would definitely affect the Public Sector Development Prgormme (PSDP) spending.
On the other hand the overall budget deficit faced by the federal government had reached Rs 158.056 billion during first quarter of the current fiscal year, which is 39.60 percent of the whole fiscal years target of Rs 398 billion. If the budget deficient further increased in other three quarters of the current year as the increase was realised in the first quarter (40 percent), it would definitely affect the PSDP spending. Officials in the ministry of finance at the moment are proposing some cut in the allocated amount of PSDP to fill the budget gap.
During the current scenario, if FBR fails to achieve the set target of revenue collection, government may face problems regarding the fund generating for the ongoing development projects and government would have to manage financing from different countries and financial institutions to complete projects in stipulated time. Government spent a total sum of Rs 470.679 billion that includes Rs 39.989 billion in non-development expenditure.
The government paid Rs 111.126 billion as interest on local and foreign loans. Out of these, Rs 98.541 billion were spent on servicing of domestic debt and Rs 12.585 billion were spent on foreign debt servicing. Total defense spending stood at Rs 57.546 billion. Development expenditure and net lending during the first quarter stood at Rs 129.817 billion.
Daily Times - Leading News Resource of Pakistan
