Tax ratio drops to 4.4pc in first half

ISLAMABAD: Amid fiscal challenges, Pakistan’s tax-to-GDP ratio dropped further by 0.4pc in the first half (July-December) of the current fiscal year to 4.4pc from 4.8pc of the same period last year. According to half-yearly data on fiscal operations released by the Ministry of Finance on Wednesday, the non-tax revenue remained unchanged at 1.1pc of GDP in the first half of the year and stood at Rs967bn, supported by a massive Rs378bn from the State Bank of Pakistan and a record Rs178bn of petroleum development levy on oil products. In another highlight of the half-yearly fiscal operations, the four provinces came up with a cash surplus of just Rs101bn against a full-year target of Rs800bn committed to the International Monetary Fund (IMF). This suggests that the annual cash surplus target was unlikely to be met over the remaining five months of the fiscal year as the current gap stood at almost Rs700bn. The overall revenue to GDP ratio also declined by 0.3pc and stood at 5.6pc of GDP in the first half of the fiscal year when compared to 5.9pc of GDP during the same period last year.