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FBR’s consistent soaring performance plays key role in fiscal consolidation

FBR’s consistent soaring performance plays key role in fiscal consolidation

ISLAMABAD: The soaring performance of Federal Board of Revenue (FBR) in last five years has played key role in fiscal consolidation of national economy. FBR demonstrated marvelous consistent performance in terms of revenue collection which hiked during every fiscal year in last five years.

In fiscal year 2012-13 FBR’s revenue collection stood at Rs1,946 billion which gone up to Rs,361 billion in last year. FBR has collected revenue amount of Rs 1,730 billion during first six months of current fiscal year 2017-18 which is Rs263 billion more than the revenue collected in the corresponding time of previous fiscal year. It was Rs1467 billion.

Regulatory duties (RDs) are helping contain imports and export package has helped in increasing exports by 11.8% from July-January 2017-18 as compared to same period last year. Therefore, the foreign exchange reserves had hit $ 11 billion in FY 2013, which rose to $ 24.5 billion in October 2016, but have since declined as a result of higher imports of growth enhancing capital equipment and machinery.

Official source at FBR told Customs Today that FBR had played key role in fiscal consolidation because it had been achieved through improved revenue collection by elimination of tax concessions and exemptions, broadening of tax base and better tax administration as well as prudent expenditure management by rationalization of untargeted subsidies. Fiscal deficit contained yet Federal PSDP increased three folds since FY 2013.

The source told that positive development seen in both working capital and fixed investment, on account of lowest policy rate in 45 years, at 5.75% till first half of FY 2017-18, down from 9% in FY 2012-13.  Policy rate has recently been increased to 6% in January, 2018. In 2015-16 inflation hit a 47year low at 2.86% thus enabling price stability and consolidating the purchasing power of a common person.

The increased revenue collection due to FBR’s strenuous efforts, the source said that Pakistan’s public debt dynamics witnessed various positive developments therefore government continued to adhere to the targets set forth in Medium Term Debt Management Strategy (MTDS) to ensure public debt sustainability. Major debt sustainability indicators have improved in last four years of the present government, a fact that is acknowledged by global stakeholders.

“Refinancing Risk of the Domestic Debt Portfolio” was reduced through lengthening of the maturity profile as percentage of the domestic debt maturing in one year was reduced to 55.6% at end of June 2017 compared with 64.2% at end of June 2013″ the source maintained.

The source told that exposure to the Interest Rate Risk was also reduced as the percentage of public debt re-fixing in one year decreased to 47.8% at the end of June 2017 compared to 52.4% at the end of June 2013. Similarly, share of External Loans Maturing within One Year” was equal to around 27.7% of official liquid reserves at the end of June 2017 as compared with around 68.5% at the end of June 2013 indicating improvement in foreign exchange stability and repayment capacity.