ISLAMABAD: Wednesday proved to be a big day for the Federal Board of Revenue (FBR) because it received remarkable applause from the most authentic international monetary organization over unprecedented performance in the revenue collection.
On the last day of the ongoing consultations between Pakistan and International Monetary Fund (IMF) in Dubai, the IMF officials paid glowing appreciation to FBR for showing remarkable performance in enhancing revenue collection by 16.1% in the first nine months of the current fiscal year.
This performance played key role in successful conclusion of the consultations between Pakistan and IMF” a well placed source at FBR privy to the preliminary and policy level of talks told Customs Today.
The source said that although, IMF acknowledged economic improvement of Pakistan as whole, but FBR’s performance received special acknowledgement and appreciation from the monetary fund.
”In March, 2017, FBR recorded a growth of 16.1 % in revenue collection as it collected Rs 345 billion against a collection of Rs 297 billion in the corresponding month of the last year. Thus, total collection in first nine months of the current financial year is Rs 2258 billion which is unprecedented in FBR history,” the FBR team apprised the IMF in due course of consultative process.
Furthermore, he source said that IMF also noted with special appreciation that the shortfall that FBR experienced in the first eight months was due to the pro growth incentives offered to various sectors of the economy particularly exports and agriculture; major item of revenue gap amounting to Rs 100 billion was due to not passing the full impact of the POL prices to the common man.
However, the source maintained that IMF noted with satisfaction the two important initiatives taken by FBR; signature on the revised Avoidance of Double Taxation Agreement with Switzerland and signature on Multilateral Convention on Mutual Administrative Assistance in Tax Matters with Organisation for Economic Co-operation and Development (OECD) in last seven months. These initiatives would help reduce and prevent tax evasion in future.
“These and other initiatives of FBR had helped the government to increase allocation for Public Sector Development Program (PSDP) more than doubled and during FY 2017 despite reducing fiscal deficit over the last three years, the budget deficit (borrowing) will be only for its development spending, which is a milestone achievement” the source added.
It is pertinent to note here that the current account deficit increased to $5.5 billion in Jul-Feb FY17. This was largely due to a sizable increase in imports of capital goods, along with delayed receipts of Coalition Support Fund (CSF).
The budget deficit, which stood at 8.2% of GDP in FY 2013, has been brought down to 4.6 percent in FY 2016. During current FY 2017 it is now projected to reduce to 4.1% of GDP. The government was committed to reduce net public debt which was 60.2% at close of FY 2016 in order to lay the foundations for sustained growth.
The rise in overall import payments was mainly driven by increased purchases and higher prices of fuel. However, there was significant increase in capital goods imports, which will lead the economy to a higher growth path.
