ISLAMABAD: In the wake of likely shortfall in the revenue collection projected for the current fiscal year, the provinces are unlikely to receive budgeted share of revenue from the divisible pool.
As per details, Finance Minister Ishaq Dar is aware of the fact that the Federal Board of Revenue may be unable to achieve the targeted revenue collection of Rs2,475 billion. However there are also considerable concerns that the reduced Rs2,345 billion tax revenue projection by the International Monetary Fund (IMF) may also be missed.
It has been conveyed to the IMF that the projected revenue collection for the current fiscal year is unrealistic as over 27 percent growth in revenue collection is required as compared to previous fiscal year to achieve the budgeted target. However the tax authorities are optimistic that revenue collection will cross Rs2,300 billion.
Under the prevailing scenario, the provinces share from the divisible pool will decrease proportionally to the shortfall in revenue collection. The provinces are budgeted to receive Rs1,728 billion in the current fiscal year: Rs 1,379 billion from divisible pool, Rs 538 billion on account of income tax, Rs597 billion sales tax (excluding GST on services), Rs89 billion federal excise duty (excluding excise duty on natural gas) and Rs152 billion from custom tax collection (excluding excise duty on services).