The federal government’s total debt increased to Rs36.537 trillion by end-January as against Rs32.997tr in the same period last year, up by almost 11 per cent, or Rs3.54tr.
Latest data released by the State Bank of Pakistan on Friday showed the central government’s domestic debt also increased to Rs24.502tr at the end of first seven months of 2020-21 when compared to Rs21.794tr, an increase of 12.4pc, or Rs2.71tr.
Central government external debt at the end of January has been reported at Rs12.035tr against Rs11.202.7tr of the comparable period last year, showing an increase of Rs832bn or 7.42pc.
Despite the overall increase in debt situation, the SBP data, however, showed that major increase was reported in the long-term domestic debt, up by about 15.63pc to Rs19.367tr against Rs16.748tr by end-January last year. In absolute terms, the long-term debt increased by Rs2.62tr in a year.
On the other hand, the short-term domestic debt increased by only Rs89bn to Rs5.136tr at end-January this year as against Rs5.047tr last year, up by 1.76pc. This apparently was part of the government strategy to prolong the profile of the debt to stagger debt servicing obligations.
The SBP data also put the total domestic permanent debt at Rs15.692tr, showing a massive increase of 17.83pc, or Rs2.375tr, in a single year from Rs13.317tr reported at the end of January 2020.
This included a major portion of about Rs15tr worth of federal government bonds by end of first seven months of current fiscal year against Rs12.581tr reported at the end of first seven months of last year. Even out of this, the major chunk of Rs14.16tr pertained to Pakistan Investment Bonds as against Rs12.33tr of same period last year. The long-term PIBs are not only preferred by domestic but also by foreign investors as these bonds offer higher returns.
On the other hand, domestic debt on account of prize bonds declined by 6.5pc to Rs686bn this year as against Rs734bn at the end of first seven months of last fiscal year.
Total unfunded debt amounted to Rs3.668tr by end of January this year when compared to Rs3.424tr of same period last year.
The government relies heavily on the markets for borrowing to meet fiscal deficit after its agreement with the International Monetary Fund that restricts borrowing from the central bank for deficit financing.
https://www.dawn.com/news/1610926/govt-debt-surges-by-11pc-to-rs3653tr
Pakistan, IMF agree to lower FBR’s tax collection target
by Mehtab Haider in The News, Mar 6, 2021
ISLAMABAD: Pakistan and the International Monetary Fund (IMF) have agreed to revise downward the annual tax collection target of the Federal Board of Revenue (FBR) in order to revive the stalled extended fund facility (EFF) programme.
The tax collection target would be lowered by Rs246 billion, from Rs4,963 billion to Rs4,717 billion, for the current fiscal year, 2020-21. The two sides agreed for revival of the programme, but it required stamped approval of the Fund’s executive board, which is expected to be held by the end of the ongoing month.
The IMF and Pakistan also agreed to fix the next budget’s FBR target at Rs6,000 billion, a gigantic task, in which the government would be given the task to collect additional Rs1,300 billion with the help of normal growth plus different stringent taxation measures. The FBR has so far collected Rs2,916 billion during the first eight months (July-Feb) period of the current fiscal year, and the Board would have to collect Rs1,801 billion during the next four months (March-June) period to materialise its downward the revised target of Rs4,717 billion on its board on June 30, 2021.
On an average, the FBR would have to collect over Rs450 billion every month in the next four months for achieving the desired target. Independent economists argued that the FBR could collect Rs4,300 to Rs4,400 billion during the current fiscal year and with adoption of stringent measures through taking advances, it could go up to Rs4,500 billion. But achieving the revised downward target of Rs4,717 billion seems a bit difficult, they added.
Now the FBR official circles say that the Board would be able to achieve its desired tax collection target for the current fiscal year. The FBR was taking all required measures and database would be utilised to bring potential income earners into tax net.
When contacted, FBR Member Inland Revenue (Operations) Dr Mohammad Ashfaque Ahmed said on Friday that the tax machinery took different measures without creating hue and cry for the purpose of streamlining the tax collection. He said that the tax machinery generated tax demand of Rs1.4 trillion, highest in the last six years, which would be materialised into taxability after completing all procedures.
He said the FBR showed zero tolerance for corruption and wrongdoings and took a number of other steps that would be converted into taxability with certain time lag. He said the FBR streamlined its collection despite COVID-19 pandemic difficulties.
https://www.thenews.com.pk/print/799870-pakistan-imf-agree-to-lower-fbr-s-tax-collection-target
