ISLAMABAD (Eshfak Mughal):- The Federal government has spend 55 percent of total revenue for debt servicing due to the highest policy rate of banks and currency devaluation during the current fiscal year.
The Finance Ministry published Fiscal Operation Report on Wednesday. According to the report, the debt servicing is eating up 55 percent of total revenue including tax and non-tax income during the first half of the current fiscal year.
The report shows that the total revenue of the country was recorded Rs4.699 trillion including Rs3.73 trillion of tax revenue and Rs967 billion during non.tax revenue during the current fiscal year. In tax revenue, federal government collection was Rs3428 billion whereas provincial collection stood at Rs303 billion. Meanwhile, the federal government has collected Rs896.4 billion and provincial governments Rs70 billion in non-tax revenue.
Documents state that the total federal share in tax revenue was Rs3428 billion which included Rs1525 billion direct taxes, Rs466 billion in taxes on international trade, Rs1271 billion in sales tax and Rs164 billion in Federal Excise Duty.
Meanwhile, the total provincial share in tax revenue was Rs303 billion which included the sales tax on services Rs186.3 billion, excise duty Rs4.7 billion, stamp duty Rs31.04 billion, motor vehicle taxes Rs15.6 billion whereas other taxes were Rs 65.2 billion.
On the other hand, the country has spent Rs.6.38 trillion including Rs6.061 trillion for current expenditure, 636 billion for development expenditure and net lending during the first half of the current fiscal year. Out of total current expenditure, the government paid Rs2.573 trillion for debt servicing including include Rs2273.4 billion domestic, Rs299.5 billion foreign debt servicing.
The data shows that the government has spent 55 percent of total income on debt serving during the first half of the current fiscal year.
The document states that the markup payments were recorded at Rs2573 billion which Rs638.8 billion defence affairs and services, Rs321.1 billion pension, Rs226.6 billion civil government expenses, Rs196.6 billion subsidies, and Rs389.1 billion grants.
Sources in the Finance Ministry confirmed that the local currency devaluation and increase in policy rate has pushed up estimated cost of debt servicing from Rs3.9 trillion of original estimates to Rs5.2 trillion for the current fiscal year. It is pertinent to mention here that the Policy Rate has been jacked up to 18 percent in Pakistan which was 13.75 percent in June 2022.
After the debt servicing, the Federal Government has transferred Rs1880 billion to provincial governments under National Finance Commission Award during the first half of the current fiscal year.
The local currency devaluation against the green back current was Rs204 which is being traded Rs270 nowadays.
The report shows and Rs638 billion for defence budget during the first six months of the current fiscal year.
The report states that a statistical discrepancy of Rs-315 billion was also observed in the period under review.
Overall, the budget deficit was recorded at Rs1683 billion whereas the primary balance was Rs889.5 billion (1.1% of GDP).
The federal share includes a markup on PESs Rs77.6 billion, dividend Rs40.8 billion, SBP profit Rs371 billion, PTA profit Rs32.5 billion, royalties on gas Rs56.6 billion, defence receipts Rs9.2 billion, passport fee Rs16.4 billion, discount retained on crude oil Rs10.8 billion, windfall levy against crude oil Rs14.8 billion, Gas Infrastructure Development (GID) Cess Rs6.02 billion, natural gas surcharges Rs10.8 billion, petroleum levy Rs177 billion and others taxes were Rs68.2 billion.
The provinces’ non-tax revenue was recorded at Rs70.6 billion in the first six months of 2022-23.
Besides, the Public Sector Development Program (PSDP) releases from July to December were recorded at Rs590 billion which includes Rs136 billion federal and Rs.454.4 provincial shares.