ISLAMABAD - The government’s non tax revenue collection is continuously increasing during the ongoing fiscal year that is helping in restricting budget deficit of the country.

Of the total revenues of Rs4.689 trillion, the government collected around Rs1 trillion as non-tax revenues during the first nine months (July to March) of the current fiscal year (FY2020). The non-tax revenue collection helped the federal government in restricting the budget deficit at 3.8 percent of the GDP. Massive increase in non-tax revenue collection had also offset the shortfall in tax collection of the Federal Board of Revenue (FBR).

The FBR had faced a massive tax collection shortfall of Rs476 billion in nine months of the year 2019-20. The FBR had collected Rs3.05 trillion in July to March period of the year 2019-20 as against the revised target of Rs3.520 trillion, leaving the shortfall at Rs476 billion.

In non-tax revenues, the government had collected Rs70.03 billion as mark-up on public sector entities, Rs26.05 billion as dividend, Rs635.5 billion as profit of the State Bank of Pakistan, and Rs113.1 billion as the Pakistan Telecommunication Authority (PTA) profit.

Massive shortfall in non-tax revenue collection expected in last quarter

Other component of non-tax revenue included Rs10.8 billion as defence receipts, Rs16.3 billion on account of passport fee, and Rs10.5 billion for discount retained on crude oil. Around Rs65.5 billion was received on account as royalties on gas and oil, Rs4.6 billion as windfall levy against crude oil, and Rs60.1 billion through other sources.

However, the government would face massive shortfall in non-tax revenue collection in the last quarter (April to June) of the current fiscal year by deferring the privatisation programme due to Covid-19. The non-tax revenue collection was some hope for the economic team to curtail the budget deficit after facing shortfall in taxes.

The government had projected to generate Rs150 billion through privatization programme in budget for the year 2019-2020. However later, it had decided that privatization of 6 public sector entities and selling 28 government owned properties will generate around Rs400 billion before June 2020. The PSEs included, SMEs bank, First Women Bank, two RLNG power plants including Haveli Bhadar Shah and Balloki, government’s 18.5 percent shares in Mari Petroleum Company Limited as well as Services International Hotel Lahore and Jinnah Convention Centre Islamabad.

The budget deficit is now expected to surge to 9.6 percent of the GDP due to shortfall in tax as well as non-tax collection in last quarter of the ongoing financial year.