Economy: 1HFY16; Higher tax collection dragged FD down to 1.7% of GDP – By Shajar Research
Economy: Pakistan’s Fiscal deficit checked in at 1.7% of GDP in 1HFY16 underneath 2.2% recorded in the CPLY as it recorded 0.6% deficit in 2QFY16 vs. 1.1% deficit in the previous quarter.
Tax revenue collection enhanced to PkR916bn vs. PkR723bn in the 1QFY16 due to 1) settling of final tax liabilities by organizations 2) implementation of revised custom and regulatory duty 3) Higher sales tax charged by the government on petroleum products amid declining prices.
This drove the total tax collection to PkR1.64trn in 1HFY16 as against targeted PkR1.55trn and IMF Target of PkR1.39trn. Where 2H of fiscal year historically witness improvement in tax collection, the expected of curtailment of development expenditure have made us to modify our full year expectation of fiscal deficit to 4.1% vs. 5.2% previously within IMF target of 4.3%.
By: Shajar Capital Pakistan Private Limited