H Khan
01-03-2002, 11:05 PM
By Imran Maqbool
KARACHI, Jan 3 (Reuters) - Cash-strapped Pakistan's tax revenues totalled 170.5 billion rupees ($2.8 billion) in the first six months (July/Dec) of fiscal year 2001/02 compared with a target of 183 million, the main tax collection agency said on Thursday.
Although there were no comparative figures available for the first half of fiscal year 2000/2001, official data shows revenues in the first five months fell to 135.5 billion rupees this fiscal year from 141.6 billion in July-November 2000.
But despite the fall, Vakil Ahmed, spokesman for Pakistan's main revenue collection authority Central Board Revenue (CBR), said given the current economic conditions, total tax revenues had attained a "comfortable figure."
"We have collected around 35 billion rupees in December 2001 that put the total figure at 170.5 billion rupees during the last six months," Ahmed told Reuters from Islamabad by telephone.
In November, the negative impact of the crisis in neighbouring Afghanistan prompted Islamabad to cut its gross domestic product growth target for fiscal 2001/02 (July/June) to 3.7 percent from 4.0 percent.
Pakistan, which recorded 2.6 percent GDP growth in 2000/01, says its exports have plummeted and other business costs have soared since the September 11 suicide plane attacks on the United States, losses projected to cost the country over $1 billion.
The drop in exports and rising business costs have forced Islamabad to revise downward its tax revenue target for fiscal year 2001/02 to 430 billion rupees from an initial target of 457 billion.
But given the first half revenue figure, well below half the planned full year total, analysts now believe the government may soon be forced to revise down its target again.
In fiscal year 2000/01, Pakistan collected 394 billion rupees in tax revenues against the target of 406.5 billion rupees.
Ahmed said multiple factors were behind the drop in tax revenues, including a slowdown in exports and imports.
He said a shortfall of 500-600 million rupees in sales tax was seen in the last six months on imports of petroleum products, due to lower international prices.
"During last (fiscal) year we were collecting tax on the landed cost of $26 per barrel...today we are collecting at $19 per barrel. It has affected our revenues," he added.
Ahmed said a reduction in the maximum import tariff to 30 percent from 35 percent for fiscal year 2001/02 had also affected revenues.
"We were hoping the reduction in import duty would be offset by higher dollar-rupee parity. But the situation has completely reversed," he added.
Since the September 11 attacks on the United States the Pakistani rupee (PKR-) has strengthened by around six percent against the dollar on the official interbank market, on excess supply and low demand for the U.S. currency.
Ahmed said the full-year revenue target was fixed on the basis of goals set for GDP growth, import growth and the inflation.
"If these three targets are achieved, then the target of 430 billion will also be materialised. Then there will be no problem," he said.
($1 - 60.33 rupees)
10:26 01-03-02
KARACHI, Jan 3 (Reuters) - Cash-strapped Pakistan's tax revenues totalled 170.5 billion rupees ($2.8 billion) in the first six months (July/Dec) of fiscal year 2001/02 compared with a target of 183 million, the main tax collection agency said on Thursday.
Although there were no comparative figures available for the first half of fiscal year 2000/2001, official data shows revenues in the first five months fell to 135.5 billion rupees this fiscal year from 141.6 billion in July-November 2000.
But despite the fall, Vakil Ahmed, spokesman for Pakistan's main revenue collection authority Central Board Revenue (CBR), said given the current economic conditions, total tax revenues had attained a "comfortable figure."
"We have collected around 35 billion rupees in December 2001 that put the total figure at 170.5 billion rupees during the last six months," Ahmed told Reuters from Islamabad by telephone.
In November, the negative impact of the crisis in neighbouring Afghanistan prompted Islamabad to cut its gross domestic product growth target for fiscal 2001/02 (July/June) to 3.7 percent from 4.0 percent.
Pakistan, which recorded 2.6 percent GDP growth in 2000/01, says its exports have plummeted and other business costs have soared since the September 11 suicide plane attacks on the United States, losses projected to cost the country over $1 billion.
The drop in exports and rising business costs have forced Islamabad to revise downward its tax revenue target for fiscal year 2001/02 to 430 billion rupees from an initial target of 457 billion.
But given the first half revenue figure, well below half the planned full year total, analysts now believe the government may soon be forced to revise down its target again.
In fiscal year 2000/01, Pakistan collected 394 billion rupees in tax revenues against the target of 406.5 billion rupees.
Ahmed said multiple factors were behind the drop in tax revenues, including a slowdown in exports and imports.
He said a shortfall of 500-600 million rupees in sales tax was seen in the last six months on imports of petroleum products, due to lower international prices.
"During last (fiscal) year we were collecting tax on the landed cost of $26 per barrel...today we are collecting at $19 per barrel. It has affected our revenues," he added.
Ahmed said a reduction in the maximum import tariff to 30 percent from 35 percent for fiscal year 2001/02 had also affected revenues.
"We were hoping the reduction in import duty would be offset by higher dollar-rupee parity. But the situation has completely reversed," he added.
Since the September 11 attacks on the United States the Pakistani rupee (PKR-) has strengthened by around six percent against the dollar on the official interbank market, on excess supply and low demand for the U.S. currency.
Ahmed said the full-year revenue target was fixed on the basis of goals set for GDP growth, import growth and the inflation.
"If these three targets are achieved, then the target of 430 billion will also be materialised. Then there will be no problem," he said.
($1 - 60.33 rupees)
10:26 01-03-02