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IMF changes Pakistani revenue target to 10.2% of GDP growth
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Wednesday, 13 May 2009
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Business Recorder reported that International Monetary Fund has removed the current revenue target slab of PKR 1.327 trillion after negotiations with the team of taxmen in Dubai and linked it with 10.2% of annual GDP growth.

A member of the delegation of the Federal Board of Revenue, who attended the meeting held with the representatives of IMF, said that 10.2% of GDP growth has been set as revenue target for current fiscal year.

He said that IMF has suggested establishing a fair and efficient tax administration that would not impede investment or production incentives and would also raise enough revenues for development and poverty reduction programs. Several issues pertaining to overall macroeconomic constraints, present revenue administration, and assessment of main taxes sub-national taxation and political economy of intergovernmental reforms were also discussed.

He added that FBR had earlier fixed PKR 1.25 trillion, which later was revised by PKR 1.32 trillion, when the GDP growth was expected around 8 percent in the current fiscal year.

However, the official statistics reconciled by the State Bank of Pakistan have shown that the current GDP growth is not above 3%. The official said that it was a very intricate matter to achieve the target of PKR 1.3 trillion when the growth rate of GDP is less than the expectation.

He said that the only major source of revenue collection was petroleum development levy, being collected on sales of petroleum products. He said that FBR is still left with PKR 431 billion, which has to be collected in two months and termed it as a formidable task to achieve. However, he was optimistic about crossing the PKR 1,200 billion mark, saying that if the department collected PKR 1.2 trillion in current fiscal year the budgetary target, which is now linked with the GDP growth, would be achieved.

(Sourced from Business Recorder)

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