Forex reserves soar up $23b

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Pakistan meets tax revenue target for first time in a decade

Mian Arshad

Islamabad—Finance Minister, Senator Muhammad Ishaq Dar, Friday, announced that country’s foreign exchange reserves had surpassed $23 billion which was a landmark achievement and a new national record.
The minister said out of this amount over $18 billion were held by the State Bank of Pakistan while the net foreign reserves held by commercial banks were around $4.9 billion. The minister said the whole Pakistani nation deserved felicitations over these accomplishments.
Making an announcement before media Finance Minister said that Federal Board of Revenue (FBR) had achieved the revenue target for the fiscal year 2015-16. The Minister extended felicitations to Prime Minister Muhammad Nawaz Sharif on this occasion. He also facilitated the entire nation and the FBR team for this historic achievement.
Finance Minister making an announcement before media stated that it was significant that the original target of Rs3104 billion set in Budget 2015-16 had been maintained and no downward revision was made during the year, which had been a common practice in the past. He said that it was a stiff target and FBR deserved appreciation for achieving it. The revenue collection showed 20pc annual growth and an overall 60pc growth compared to revenue collection in 2013 when the present government assumed responsibilities.
The minister said that revenue collection of Rs3104 billion would mean that the provinces would be receiving around Rs700 billion more from the divisible pool compared to what they received in 2012-13. This significant increase allows the provinces to carry out projects and programs of public benefit and interest.
Reuters add: Pakistan collected 3,104 billion rupees ($29.7 billion) in taxes in fiscal year 2015/16, the finance ministry said on Friday, the first time it has met its tax revenue target in a decade.
Last year, the government collected 2,588 billion rupees in taxes but missed its target by 9 percent.
Tax collection has been one of the biggest challenges facing successive governments who have promised to rein in tax evaders but faced fierce resistance to change, including from the many politicians and businessmen believed to be among evaders.
The inability to raise tax revenue has constrained government spending, depriving schools and hospitals of funds, exacerbating a power crisis and causing widespread hardship in the nuclear-armed country of 190 million people.
Tax revenue for fiscal year 2015/16 is the highest in the country’s history, according to the finance ministry.
“This represents a 60 percent increase in the last three years, representing an average increase of 20 percent per annum,” the finance ministry said in a statement to mark the beginning of the new fiscal year.
“Total tax collection goes to the provinces to spend on education, health and other sectors,” it said.
The ministry said foreign exchange reserves had crossed $23 billion, the highest in the country’s history. The sum includes reserves held by the central bank and commercial banks.
The IMF helped Pakistan stave off a default in 2013 with a $6.7 billion financial assistance programme.

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