Tag Archives: fiscal

The Center faces a big challenge to find an outlet for income | Instant News


ISLAMABAD: The center must face serious challenges to support daily expenses after paying defense bills and debt payments from available resources, because the fiscal budget 2020-21 is being prepared based on the existing National Finance Commission Award (NFC). .

However, the government has decided to focus primarily on ‘facilitation’ in the coming budget so that economic activity can begin instead of taking any coercive action.

Income can be mobilized through tax rationalization, effective enforcement and administrative steps but it was decided to explore options to burden the rich, if there were no other options left to meet revenue targets.

Meanwhile, the tax authorities recommend avoiding taxation steps but the final decision for this effect will be taken by the ruling regime, while considering the political costs attached to any action to mobilize more revenue collection efforts.

The figures collected through ongoing budget preparation for the next fiscal year will set the stage for the resumption of the stalled US $ 6 billion IMF extended funding facility (EFF) program.

Pakistan seems very grateful to the IMF for going forward to provide US $ 1.4 billion under the Fast Financial Instrument (RFI).

The Ministry of Finance authorities informed PM Imran Khan about the preparation of the upcoming budget and argued that without rationalizing spending on targeted subsidies, especially for the electricity sector and reducing losses from public sector companies (PSE), it would be impossible to make a fiscal cushion for development after transfer financial stocks to the federation unit and pay the debt and debt spending bills on the head of expenditure.

Under the existing NFC arrangement, the Federal Divisible Pool (FDP) is distributed at a ratio of 57.5 percent and 42.5 percent between the province and the federal government. If the Center collects Rs100 per year, it goes to the province up to Rs60 through 62 through the inside of the FDP and other subvention accounts while the remaining Rs38 goes to the Center to do business.

One of the top financial division officials told ‘The News’ late Friday that the ministry told the PM that the economy was performing well during the pre-COVID-19 scenario because twin deficits such as budget deficits and current account deficits were under control.

It is said that the IMF / World Bank and ADB are advancing to save Islamabad because multilateral lenders are happy with economic performance in the first nine months.

“The post-COVID-19 situation poses a serious challenge to the economy because the country is under the IMF program and the government must make budget figures to give direction to the economy,” said one of the top finance ministry officials. The government has agreed with the IMF to envisage the target of gathering FBR at Rs5, 101 billion for the next budget against the revised target of Rs3,908 billion for the fiscal year ending June 30, 2020. The FBR needs 31 percent growth to reach the desired target of the next fiscal year.

With a nominal growth of 10 percent, including 2 percent growth in real GDP and 8 percent inflation, FBR must meet the target of the next fiscal year with an additional 20 percent growth coupled with a nominal growth of 10 percent.

The tax collection target will mainly depend on the prevalence of the corona virus during the next fiscal year and how the economic situation develops.

So budget targets evolve with the passage of time but the government must make clear figures until the first week of next month.

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Pakistan’s economy will face more pain, coronavirus next, fiscal: expert | Instant News


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