Uzair bin Farid

The Government of Pakistan has set the target for non-tax revenue receipts for the fiscal year 2023-24 at Rs2.9 trillion. According to budget documents, the government aims to raise Rs12.3 trillion in gross revenue receipts, of which Rs9.4 trillion will be raised by the Federal Board of Revenue (FBR). Out of the total receipts, Rs5.3 trillion will be provided to provinces as their share in the revenue. Among the non-tax receipts, profits from the State Bank of Pakistan (SBP) will make the highest share with Rs1.11 trillion, followed by the petroleum levy of Rs869 billion. They will be followed by dividends in the category of income from property and enterprise with total revenue receipts of Rs121 billion, again followed by mark-up from public sector enterprises with total non-tax receipts of Rs118 billion.

Category-wise, total non-tax revenue receipts include miscellaneous receipts of Rs1.3 trillion, followed by Rs1.16 trillion from the category of receipts from civil administration and other functions. In the third place comes the category of income from property and enterprise with total estimated non-tax revenue receipts of Rs398 billion. Last comes the category of levies and fees with total estimated non-tax revenue receipts of Rs29 billion. Non-tax revenue receipts represent 24% of the estimated total revenue receipts of the government for FY24. After the due share of provinces is paid off from the total revenue receipts, the government is left with net-revenue receipts of Rs6.9 trillion. The rest of the estimated government expenditure that will be incurred during FY24 will be financed from various other sources.

They include non-bank borrowing of Rs1.9 trillion, bank borrowing (T-Bills, PIBs, Sukuk) of Rs2.8 trillion, privatisation proceeds of Rs15 billion, and net external receipts of Rs2.7 trillion. These other sources, apart from the revenue receipts of the FBR and other institutions, amount to a total of Rs7.5 trillion, which represents more than half of the total resources of the government for FY24. This goes on to show that the government has to rely heavily on borrowing and other sources to finance its current and development expenditure. This incurs cost on the government in the form of interest payments and other liabilities as the government then gets beholden to return the borrowed money and favours in the future. The government needs to exponentially increase its revenue generation capacities so that most of the financing for its current and development expenditure could be met from its own revenue sources instead of relying on others.

Credit: INP-WealthPk