Shortfall in the revenue collection will be put under
From SHAMIM AHMED
Feb-04 - Feb-10, 2002
The shortfall in revenue collection which has already
crossed over Rs. 17 billion during July-December 2001 may increase to
about Rs. 22 billion by the end of fiscal year. The government is
prepared to bridge this shortfall in revenues from the cash assistance
of $600 million provided by the US. It will therefore, neither cut its
expenditure estimates nor reduce the annual development programme as is
normally done to meet such shortfalls.
Talking to the newsmen informally the Chairman
Central Board of Revenue (CBR) admitted that a shortfall of Rs. 17
(seventeen) billion has been registered between the actual collection
and the estimates during the first six months. He said that last year
revenue target of Rs. 430 billion, based on our survey reports, was over
ambitious and it was downward revised to Rs. 406 billion but the actual
recovery as computed at Rs. 393 billion.
He said this year the revenue recovery target was
fixed at Rs. 430 and during the first six months the revenue receipt
recorded at Rs. 175 billion while efforts are being made to reach the
target despite the prevailing situation in the region particularly
around Pakistan which had adversely affected the revenue recovery under
various heads. After the September 11 attack the duty recovery on
Karachi Port had declined by 20 to 25 per cent.
The revenue receipts fell 4.1 per cent in the first
six months of the current financial year and stood at Rs. 174.52 billion
against Rs. 181.97 billion during the same period last year.
The target set for July-December period of the
current financial year was Rs. 192.7 billion against Rs. 181.38 billion
during the same period last year, an increase of over 6.24 per cent.
However, the revenue collection during the first six months declined by
9.43 per cent in comparison to the target set for the period.
Similarly, the target set for December was earlier Rs.
46.5 billion, which was later reduced to Rs. 42 billion against R. 40.4
billion revenue collection last year during the same month, an increase
of over 2.96 per cent.
According to official figures released by the Central
Board of Revenue (CBR), Rs. 62.77 billion were collected under the head
of direct taxes during the first six months against Rs. 58.33 billion
during the same period last year, an increase of 7.6 per cent.
Similarly, under the head of indirect taxes Rs.
111.75 billion were collected during the July-December period against Rs.
123.64 billion during the same period last year, registering a negative
growth of 9.6 per cent.
Further break-up showed that under the head of sales
tax, Rs. 73.51 billion were collected against Rs. 70.68 billion revenue
collection during six months period of last year, showing an increase of
4 per cent, while under the head of central excise Rs. 20.17 billion
were collected against Rs. 24.16 billion, registering a decline of 15.5
The tax authorities collected Rs. 18.06 billion
customs duty during the July-December period this year against Rs. 28.79
billion during the same period last year, showing a decline of 37.3 per
According to sources in the Ministry of Finance the
likely short fall in revenue collection would be met from money received
as cash assistance from the United States. The US government has
committed a grant of $1 billion to Pakistan to meet the losses sustained
by its economy because of Afghan war. Out of this commitment $600
million has already been received. The money in dollars is with the
State Bank which has resulted in the increase of foreign exchange
reserves and provision of relief for balance of payment situation. The
money to bridge the shortfall in the revenue collection will be given
from rupee component of this cash grant provided to the Ministry of
Finance by the State Bank", added the sources.
Secretary General Finance Moeen Afzal, when asked to
comment on it, confirmed that money would be provided to bridge whatever
the shortfall will be from the actual estimates to the net collection by
the end of the current fiscal year. "We are in the process of
making the estimates of probable collection and the shortfall. We expect
that revenue collection won't go below the revised estimates but at the
end of the day whatever will be the shortfall, "will be
compensated", he added.
He said: "If we would not have got this cash
grant from the US then we would have no other option but to make cuts in
the Annual Development Programme or the current expenditure. But
instead, due to the availability of this grant, we have been able to
provide further Rs. 14 billion for the social sector and Rs. 1 billion
to improve the internal security as a result of what is happening after
the September 11."
"This will also help us to control the fiscal
deficit. After the September 11 the situation changed altogether and we
have to be realistic and keep in view the present scenario while talking
about the budgetary estimates and their downward revision, he added.
Sources in the Ministry of Finance told this
correspondent that the CBR has been instructed to ensure that scenario
of further downward revision of revenue target should not emerge.
"All the aspects and reason for the shortfall in the revenue
collection will be put under right scrutiny and any slackness on part of
the CBR will not be allowed," added the source.