CBR created history by collecting over Rs. 76 billion during the month of June 2004


July 12 - 18, 2004





Economic Managers of Pakistan, headed by the Finance Minister Shaukat Aziz deserve a compliment for their outstanding performance during the financial year 2003-04 and not only achieving but in most cases surpassing the target fixed for the year. Growth rate (GDP) reached 6.4 percent against estimated 5.3 percent; export exceed $ 12.3 billion against 12.1 billion and revenue collection reached about Rs. 510.6 billion against an ambitious target of Rs. 510 billion.

The Finance Minister made a special mention of outstanding performance of the Central Board of Revenue, in his press conference in Islamabad, during which he told newsmen that CBR created history by collecting over Rs. 76 billion during the month of June 2004 to meet its target for the year. On first of June they were behind by Rs. 75 billion to meet the target of Rs. 510 billion for the year 2003-04. It appeared a different task, he added. As per its provisional figures, the CBR has collected Rs. 510.6 billion up to June 30, 2004, against last year's collection of Rs. 460.6 billion i.e. increase of 10.9 percent. The Finance Minister said that CBR had achieved the revenue target of Rs. 510 billion despite the fact that collection in May and June was comparatively more difficult. Moreover, the law and order situation in Karachi also negatively affected the revenue collection as CBR had faced daily loss of Rs. 1.5 billion.

CBR Chairman, Abdullah Yusuf, Member of Customs, Ramzan Bhatti, Member Sales Tax, Shahid Ahmed, Member Income Tax Salman Nabi and Member Taxpayer Education and Facilitation, Habib Fakhurddin were also present on the occasion.

Shaukat said that collection of direct taxes stood at Rs. 159.1 billion against target of Rs. 160 billion. However, he said he was confident that CBR would cross the target of Rs. 160 billion till compilation of final figures. He appreciated that the collection of sales tax was equal to the target of Rs. 218 billion. The department achieved target of Rs. 218 billion on June 30, which is very encouraging. On the customs side, the CBR collected Rs. 89.3 billion against target of Rs. 88 billion showing an increase of Rs. 1.3 billion. The collection of custom duty would also increase in coming days he said. The collection of central excise duty (CED) was Rs. 44.2 billion against target of Rs. 44 billion.

Responding to a question on meeting target of Rs. 580 for 2004-05, Shaukat said that the government would achieve this "ambitious target" through broadening of the tax base, simplification of law, strengthening of economy keeping in view of growth target of 6.6 percent. He said that the target of Rs. 510 billion for 2003-04 was also aggressive, as it was 13-14 percent more than the previous year's target. The target was achieved due to economic growth, he added.

Pakistan's performance on the export side during the outgoing financial also has been very encouraging as it exceeded the target of $ 12.1 billion. It recorded a figure of $ 12.210 billion on June 30 which is likely to rise by another 150 million during final calculation. It shows on increase of about 14 percent on last year performance of about $ 11 billion. To exceed the target of $ 12.1 billion was by no means an easy task, particularly, in a situation wherein exporters faced new restriction from the European Union and some other important trade partners in the world market.



It was way back in 2001-02, when the government decided to go for an exports driven strategy to reduce trade deficit. The policy worked to the expectation of the government and inspired it to go for enhanced exports target after each outgoing fiscal year for the last three years. The officials are happy over remarkable results on export front. They believe that Pakistan's strong economy has started showing its positive impact and exceeding the exports target of $ 12.1 billion.

At the end of the last financial year, the economy had shown impressive growth, foreign exchange reserves stood at more than $ 12 billion, high cost debts are being retired and the country's credit rating has improved. The enhancement of the income tax limit from Rs. 80,000 to Rs. 100,000 will provide relief to the employed persons and the increase in sales tax limit from Rs. 500,000 to Rs. five million and fixation of its rate at 15 percent will benefit a large number of business. The finance minister also pointed out that the revenue target for the current financial year has been fixed at Rs. 580 billion and given a stable law and order situation and 6.6 percent growth in the economy, this will be achieved. He made it quite clear that one day strike in Karachi costs the exchequer rupees one billion to Rs. 1.5 billion and these should protests in the shape of inflation or taxation while daily wage earners, small businessmen and other employees are also badly affected by them. The adverse impacts that protests and strikes have upon the smooth operative of economic activity have to be discarded by everyone.

Pakistan economy can meet its economic growth target of 6.6 percent for the fiscal year 2004-05 as it has been described as a realistic forecast by the State Bank of Pakistan. In its third quarterly report, which was released last Tuesday, the bank also made some highly significant observations that deserve close attention. It has rightly pointed out that the growth momentum will need to be maintained. This is particularly so as it has been possible to achieve high rates of growth after a great deal of effort. In the outgoing year, agriculture sector grew by only 2.6 percent against the target of 4.2 percent. It was due to an unusually high industrial output that economic growth of 6.4 percent was achieved during this period. As the newly announced budget carried numerous incentives for agriculture as well as other sectors of the economy, it is all the more necessary that the growth process is not only maintained but also even further accelerated.

The central bank is of the view that growth policies should be strongly titled in favour of those sectors of the economy that use more for the unskilled labour to let the process of growth generate employment and reduce poverty. This is yet another extremely important observation in the report as creation of jobs and poverty reduction are high on the government's policy agenda. Related to that is the policy to encourage construction sector but owing to high prices of the required material, it is yet to achieve full potential of growth. The measures announced in the budget should help in this regard. According to the report, there are imbalances in the skills demanded by the vibrant sectors of the economy and the output produced by the educational institutions. It has emphasis that inflationary pressure be contained.