Friday, 17 September, 2021

Revenue On Right Track

Though some COVID-related restrictions have still been in place across the country, the first five weeks of the current fiscal year have remained quite promising for the government when it comes to revenue collection. During the period, the government has been able to collect Rs. 100.5 billion, which is 8.74 per cent of the total annual target of Rs. 1151.6 billion as estimated in the budget of the current fiscal year. According to the daily budgetary report of the Financial Comptroller General’s Office (FCGO), the government’s total receipts during the same period amounted to Rs. 113.6 billion. This amount stands at 9.35 per cent of this fiscal year’s target of Rs. 1214.9 billion. This is a notable increase in revenue collection as compared to the collections in the fiscal year 2019/2020. The government was able to collect only 6.4 per cent revenue of the total target of Rs. 1011.7 billion in the first five weeks of the previous fiscal year when the government’s total receipts were put at 6.81 per cent.

Officials at the Ministry of Finance are now confident that the revenue target set for the current fiscal year will be met without any difficulty provided the trend continues up until the end of the year. The fourth quarter of the last fiscal year also witnessed an increment in revenue collection. The process of revenue collection can move forward in a smooth manner only when there are no obstacles and restrictions. Increased economic activities and confidence level of the business community may result in a significant rise in revenue mobilisation. However, as per the news report published in this daily on Monday, there is no basis for high hopes as the amounts collected in the first month of the current fiscal year were from the cash returns to the state coffers.

Owing to the coronavirus lockdowns and other curbs, the budget could not be spent as planned in 2019/20 and 2020/21. So, a lot of conditional and matching grant returned to the capital fund as the different government departments and agencies failed to utilise the budget in the fiscal year 2019/20. In the first five weeks, as much as Rs. 83.3 billion tax revenue and Rs. 17 billion non-tax revenue was collected. This accounts for 8.03 per cent and 15.22 per cent of their annual targets, respectively. The government plans to collect Rs. 1038.1 billion tax and Rs. 113.4 billion non-tax revenue during the current fiscal year.

But the mobilisation of budget has remained poor in the first five weeks of the current fiscal year. Although there are limited restrictions on a few service businesses, including travel, tourism, entertainment and education, the process of budget execution could not gain due momentum. Only 1.11 per cent of Rs. 1647.5 billion has so far been spent. Capital spending stands at only 0.25 per cent of Rs. 435.2 billion. It is necessary to increase the capital expenditure to meet the development goals of the nation. A lack of leadership at several development ministries is believed to have been a major obstacle to budget spending. In view of the low spending of the capital budget and increasing amounts of arrears, the relevant authorities must step up necessary measures to make sure that all the development projects are effectively implemented in a result oriented manner within the given timeframe.