Pakistan may face worst ever revenue shortfall of over Rs 900 billion due coronavirus pandemic outbreak

Shares
Pakistan may face worst ever revenue shortfall of over Rs 900 billion due coronavirus pandemic outbreak

ISLAMABAD: *Pakistan may face worst ever revenue shortfall of over Rs 900 billion due coronavirus pandemic outbreak, *Industries and Production Minister Hammad Azhar on Friday informed the Senate.

He said that the Federal Board of Revenue’s tax collection for this fiscal year may drop to around Rs3,905 billion, as against the pre-corona target of Rs4,800 billion.

Responding to various supplementary questions during question hour, he said due to the pandemic, a loss of Rs700-Rs900 billion was expected in the last quarter.

“With a shortfall in revenues and an increase in public spending due to stimulus package, the fiscal deficit is expected to exceed the target of 7.5pc of GDP and might go up to 9.4pc of GDP.

On a query, he said the incumbent government has successfully brought down current account deficit from $20 billion to $3-6 billion.

He said since 2018, Pakistan has received $1.44 billion under the Extended Fund Facility (EFF 2019-2023) and $1.38 billion under the Rapid Finance Instrument (RFI) from the International Monetary Fund (IMF). Similarly, an amount of $1.27 billion has been returned to IMF since March 2018.

To another question, Azhar said the government had announced a stimulus package of Rs1.24 trillion to support different segments of the society, including businesses, during the Covid-19 pandemic.

“Before the outbreak of Covid-19, gross domestic product growth (GDP) was projected at 3.24pc for FY20, with growth in agriculture projected at 2.85pc, industry 1.95pc and services 4.04pc,” he recalled. “However, due to the pandemic, FY20 posted a negative growth of -0.4pc (provisional), with agriculture at 2.67pc, industry -2.64pc and services -0.59pc.”