Govt likely to miss even the revised revenue target

The government is likely to miss revenue targets yet again.

Data released by the Financial Comptroller General Office (FCGO) shows the government has mobilized Rs 661bn in revenue in the first eight months of the fiscal year 2023/24. Although the collection is 7.13 percent higher compared to the same period of the previous fiscal year, it is only 41 percent of the revenue target for the current fiscal year.

The government initially set a revenue target of Rs 1,422bn for the current fiscal year through the annual budget announced on May 28 last year. It, however, lowered the revenue target to Rs 1,202bn through the mid-term review of the budget since revenue collection was not picking up as expected.

To meet the revised revenue target, the government needs to raise Rs 541bn in the remaining four months of the fiscal year which is unlikely as the government had mobilized Rs 393bn in the last four months of the previous fiscal year. This means the government needs to collect 38 percent more revenue compared to the last months of 2022/23 to meet the revenue target. Even if the revenue collection in the last four months of the current fiscal year follows the trend of the first eight months, total revenue collection will still be below Rs 1,100bn.

Although the government has managed to mobilize only Rs 661bn over the first eight months of the current fiscal year, it has spent Rs 801bn in the review period, according to FCGO. In the same period of the previous fiscal year, such spending was Rs 779bn.

Of the total spending, Rs 582bn is in recurrent expenditure and Rs 81.21bn is in capital expenditure, while Rs 138bn is toward financial management. In the first eight months of the previous fiscal year, the government had spent Rs 600.8bn toward recurrent expenditure, Rs 84.25bn toward capital expenditure, and Rs 86.12bn toward financial management.

According to the Financial Comptroller General Office (FCGO), the government has mobilized Rs 578m from tax revenue and Rs 60.37bn from non-tax revenue in the eight-month period.

The government had mobilized Rs 500.18bn from tax revenue, Rs 56.8bn from non-tax revenue, and Rs 35.3bn from other sources in the first eight months of fiscal year 2022/23.