LAHORE: Federal Board of Revenue’s (FBR) collections increased by only 13.6 percent, while persistent structural weaknesses, particularly energy, shortages, low Foreign Direct Investment (FDI), losses of PSEs, and low tax-to-GDP ratio continue to take a toll on the country’s overall economic performance.
This was stated by second quarterly report of the Central Board of Directors of the State Bank of Pakistan presented to the Parliament Friday.
Total revenue (federal and provincial) grew by only 5.0 percent in the first half of the year, compared with 13.9 percent last year, the report said adding that although the government introduced several tax measures in the budget for fiscal year 2014-15, FBR revenues increased by only 13.6 percent during this period.
The low growth in tax revenue was partly due to sharp fall in oil prices.
After facing some difficulties in the initial months of the fiscal year, the economy ended the first half of current fiscal year with some positive developments.
These positive developments include a decade low inflation; contained budget deficit along with its improved financing mix; comfort in balance of payments mainly on the back of sharp decline in global oil prices; increase in foreign exchange reserves and stability in the exchange rate.
‘In order to address these issues and to put the economy on a higher growth trajectory, bold policy measures along with better overall governance are inevitable,’ the report concludes.