ISLAMABAD:                -             The government’s non-tax revenues are continuously increasing during the ongoing fiscal year mainly due to increased State Bank of Pakistan (SBP) profits and receipt of outstanding cellular licenses renewal fees.

The government has collected Rs718.8 billion as non-tax revenues in first six months (July to December) of the current fiscal year, which is over 80 per cent of the annual projection of Rs894.5 billion. Non-tax revenue represents the recurring income earned by the federal government from sources other than taxes.

“During first six months of the current financial year, an upsurge in collection of revenue (other than FBR) has been witnessed vis-à-vis corresponding period of last financial year 2018-19, owing to increased SBP profits, receipt of outstanding cellular licenses renewal fees and a steady flow of other receipts from all streams as per projections,” the ministry of finance stated in mid-year budget review 2019-20, which was recently presented in federal cabinet meeting.

The breakup of Rs718.8 billion showed that the government has collected Rs110.1 billion as surplus of Pakistan Telecommunication Authority (PTA) as licenses renewal fees /3G&4G in July-December period of the year 2019-20. The collected amount has exceeded the government’s projection of Rs53.7 billion for the entire current fiscal year. Meanwhile, the government has received Rs426.5 billion as SBP profits in six months against the annual projection of Rs406.1 billion.

Furthermore, the government has collected Rs43.8 billion as discount retained on local crude oil and Rs27.4 billion as interest from Public Sector Entities (PSEs) and others.  The government has received Rs26.2 billion as dividends from PSEs. Meanwhile, the government has accumulated Rs12 billion from mark-up from provinces, Rs11.9 billion as UNO receipts, Rs11.5 billion as foreign grants,  Rs11.4 billion as citizenship & passport fee and Rs7.2 billion as discount retained on local crude oil and Rs6.5 billion as defence in six months of the current fiscal year.

The massive increase in non-tax collection helped the government in offsetting the shortfall in tax collection of Federal Board of Revenue (FBR). The Federal Board of Revenue (FBR) has faced a massive tax collection shortfall of Rs274 billion in first six months (July to December) of the current financial year. The FBR had targeted a total collection of Rs2367 billion for the first six of this year. However, the FBR collected Rs2093 billion during the period under review. The shortfall in tax collection is increasing with the passage of every month.

The non-tax collection has helped the government in controlling the budget deficit. Pakistan’s budget deficit has recorded at Rs994.7 billion during first half (July to December) of the current fiscal year. The country’s expenditures have recorded at Rs4226.6 billion as compared to the revenues of Rs3231.9 billion in July-December of the ongoing financial year.

The budget deficit has recorded at Rs994.7 billion (2.3 percent of the GDP).

It is worth mentioning here that non-tax collection would bridge the tax collection shortfall in ongoing fiscal year. The non-tax collection would increase by Rs400 billion to Rs1.6 trillion in the current fiscal year from budgeted Rs1.2 trillion.