Islamabad August 17 2022: Pakistan's fiscal deficit for the period spanning July 2022 to June 2023 has reached PKR 6,521 billion. This increase is attributed to a rise in interest payments, which reached PKR 5,831 billion, compared to the deficit of PKR 5,260 billion recorded during the same period the previous year. This information comes from the Ministry of Finance.
In relation to the country's Gross Domestic Product (GDP), the fiscal deficit has decreased to 7.7 percent from the 7.9 percent recorded during the same period last year. Notably, the primary balance has improved, reaching 0.8 percent of the GDP. In contrast, the previous year saw a negative primary balance of 3.1 percent.
Total revenue collection for the country amounted to PKR 9,634 billion, marking a 19.8 percent increase compared to the PKR 8,035 billion collected during the same period last year. Meanwhile, expenditures have risen by 21.5 percent, reaching PKR 16,155 billion, up from PKR 13,295 billion the previous year.
Of the total revenue, PKR 7,169 billion was collected at the federal level, while the provinces contributed PKR 650 billion in the Fiscal year 2023, which runs from July to June. In comparison, the previous year saw collections of PKR 6,143 billion and PKR 612 billion from the federal and provincial levels, respectively.
The Tax to GDP ratio for Fiscal year 2023 has dropped to 9.2 percent, down from 10.1 percent in Fiscal year 2022. This is primarily due to a mere 6.1 percent increase in collection from provincial taxes.
Breaking down the revenue streams, direct taxes amounted to PKR 3,272 billion, up from PKR 2,280 billion, while indirect taxes totaled PKR 3,897 billion, slightly up from PKR 3,862 billion. Within indirect taxes, customs revenue generated PKR 935 billion, a decrease from the previous year's collection of PKR 1,009 billion. Sales tax collection rose to PKR 2,592 billion from PKR 2,532 billion.
The collection from Petroleum Levy in Fiscal year 2023 reached PKR 580 billion, showing significant growth compared to the PKR 128 billion collected during the previous year.
During Fiscal year 2023, the country spent PKR 5,831 billion, accounting for 60.5 percent of total income, on interest payments for its debt. The country's overall expenditure increased to PKR 16,155 billion compared to PKR 13,295 billion the previous year. This was mainly due to higher markup payments, which amounted to PKR 5,831 billion, up from PKR 3,182 billion the previous year. Additionally, Defense spending increased to PKR 1,586 billion from PKR 1,412 billion during the same period the prior year.
The country's pension liability also increased, reaching PKR 666 billion during the period from July 2022 to June 2023, as compared to PKR 545 billion during the same period the previous year.
In terms of subsidies, the government provided PKR 1,080 billion to the general public during Fiscal year 2023, a decrease from the PKR 1,529 billion in subsidies provided during Fiscal year 2022.