The State Bank of Pakistan has said that achievement of revenue targets depends on realisation of CSF and sale of 3G licences. The State Bank's first quarterly report said that reduction in the budget deficit was caused primarily by 29.7 percent growth in FBR revenues, on the back of increased tax collection efforts and higher revenues from imports. Non-tax revenues also recorded impressive growth of 50.4 percent.
However, on the basis of seasonal trend in FBR revenues, the amount collected up to end of December 2011 falls short of the amount needed to meet the annual target of Rs 1,952.3 billion, it added. FBR's annual tax collection target for FY12 is Rs 1,952.3 billion, which means an additional Rs 394.3 billion over last year's tax collection.
On the basis of seasonal trend in tax collection, the FBR should have collected Rs 406.4 billion in Q1-FY12, implying a shortfall of Rs 25.6 billion. Similarly, FBR data shows tax collection of Rs 840.1 billion on the end of December 2011, which indicates that FBR would have to make considerable efforts to achieve the end-year target, the report said.
"Meeting end-year revenue target would also depend upon the realisation of CSF and sale of 3G licences (around Rs 150.0 billion), in absence of which it would be difficult for the government to contain the fiscal deficit within its annual target", the report pointed out.
The growth in overall revenue was 33.4 percent during Q1-FY12, compared with a negative growth during Q1-FY11. While the non-tax component also contributed to this growth (particularly Rs 54.0 billion transferred as SBP profit), the main contributing factor was high growth in sales tax. Although FBR could not carry forward tax reform agenda during FY11, removal of exemptions in the FY12 budget, and the tax authority's resolve to improve enforcement helped shore up federal tax revenues, the report said, adding that collections under direct tax and sales tax, which together make 81.4 percent of the total FBR revenue, grew by 30.1 and 38.6 percent, respectively.