Monday, September 27th, 2021
Home »Taxation » Pakistan » 0.6 percent primary deficit agreed with IMF: Government banking on Rs 800 billion non-tax revenue
The government is banking on Rs 800 billion non-tax revenue from renewal of cellular licenses, privatization of two power plants and State Bank of Pakistan (SBP) profit to get close to 0.6 percent primary deficit agreed with the International Monetary Fund (IMF) under $6 billion extended fund facility (EFF). Providing details, Finance Ministry officials stated that it expects Rs 300 billion from privatization of two RLNG power plants, Rs 200 billion from cellular companies and Rs 300 billion as State Bank of Pakistan profit while non-tax revenue projected from other accounts would be in addition to this.

Sources added that the government is expected to hire financial advisor (FA) to issue $ 1 billion to $ 2 billion bond in the international capital market as availability of liquidity in the capital market makes issuance of bonds very attractive at this point in time.

Sources in the International Monetary Fund (IMF) and Ministry of Finance told Business Recorder that the (IMF) mission's visit to Pakistan on 16 September was previously scheduled.

"This is a routine visit of the IMF mission to Pakistan" said an official of IMF on condition of anonymity while spokesman Finance Ministry Omer Hameed, when contracted, maintained that "no one can stop IMF mission visiting but this has nothing to do with budget deficit or primary deficit for the last fiscal year". He added that Pakistan would meet the 0.6 percent primary deficit target agreed with IMF by the end of fiscal year 2019-20.

He further stated that the video-conference with the IMF a few days ago was also a routine matter since the time of the then finance minister Asad Umar.

Sources in Finance Ministry further stated that a number of factors notably a decrease in revenue by a Rs 321 billion, Rs 276 billion decline in other revenue and increase in expenditure by Rs 286 billion, led to a higher budget deficit for last fiscal year as opposed to revised estimates in the budget documents.

They, however, insist that the economic situation has begun to show some positive signs with 14 percent growth in revenue collection during the first two months likely to be further consolidated with administrative measures by the federal board of revenue (FBR) in coming months.

Sources added that against the target of Rs 291.5 billion for the month of July 2019, (FBR) collected Rs 281.7 billion while revenue collection in the month of August 2019 was Rs 297.7 billion against the target fixed at Rs 352.1 billion, reflecting a shortfall of Rs 50 billion.

Copyright Business Recorder, 2019

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