All hands in the cookie jar: Billions of rupees of taxpayer money untraceable

Published: November 27, 2012

Fiscal books show Rs88.7 billion unaccounted-for; questions raised over authenticity of fiscal operations. DESIGN: TARIQ GILANI

ISLAMABAD: 

A huge sum of Rs88.7 billion is untraceable in the official books, as the federal government does not have any clue about roughly one-tenth of the total expenditures that it incurred during the first three months of the current financial year.

This also puts a question mark over authenticity of the entire fiscal operations since the numbers reported in the ‘Summary of Consolidated Federal and Provincial Budgetary Operations’ are understated. The finance ministry, on Monday, released the summary of fiscal operations for the period July-September of the fiscal year 2012-13.

In the summary, a sum of Rs88.7 billion has been described as “statistical discrepancy” – a euphemism that the finance ministry uses for untraceable chunks. The untraceable amount makes 9.1% of the total expenditures of Rs975.9 billion that were incurred during the first quarter, according to the official documents.

This is not for the first time that big amounts are untraceable in the official books; however, the figure is alarming this time. In the fiscal year 2010-11, Rs32.4 billion was reported as untraceable, whereas by end of the last fiscal year it swelled to Rs69.9 billion. The government’s budget is based on cash accounts and previous transactions are not reported in the new fiscal year.

The reported figures also undermine the authenticity of the entire budget. The summary shows that government’s development spending during the first quarter remained at Rs30.3 billion. Contrary to this figure, Prime Minister Raja Pervez Ashraf spent his entire annual discretionary budget of Rs22 billion in just three and half months.

The finance ministry’s own reports suggested that the federal development spending was over Rs60 billion.

The discrepancies, giving rise to doubts of irregularities, are despite the fact that the Rs5.6 billion Project to Improve Financial Reporting and Auditing (PIFRA) has in place for the last many years. PIFRA’s objective is to ensure accuracy, completeness, reliability, and timeliness of intra-year and year-end government financial reports at the national, provincial, and district levels.

9.1

Both, spokesperson of the Ministry of Finance Rana Assad Amin and PIFRA Project Director Asif Usman, were not available to defend the discrepancies. In the past, officials used to say that discrepancies are addressed at close of every fiscal year but so far neither the finance ministry nor PIFRA had given any update about discrepancies over the last couple of years.

Though the numbers appear understated, the summary shows, that in three months the federal government spent Rs299.4 billion on domestic debt servicing and Rs13.4 billion on foreign debt servicing, which is Rs131.8 billion or 73% higher than the preceding period. On defence, Rs117.5 billion was spent – higher by Rs10 billion or one-tenth.

Total revenues, both federal and provincial, remained at Rs692 billion. The budget deficit – gap between income and expenditures – during the period under review remained at Rs283.8 billion or 1.2% of the gross domestic product.

The deficit is in line with annual target of 4.7%, but the trend is unlikely to be sustained in the coming months. Total revenues ballooned due to the Rs113.8 billion one-off payment by the United States on account of Coalition Support Fund.

Moreover, the Federal Board of Revenue (FBR) has already informed the finance ministry that it cannot achieve this year’s tax collection target of Rs2.381 trillion. It has estimated an Rs187 billion shortfall that will widen the annual budget deficit by the same amount.

Asrar Raouf, member of Inland Revenue of FBR recently said that the Finance Minister Dr Abdul Hafeez Shaikh was in the loop regarding declining revenues.

Published in The Express Tribune, November 27th, 2012.

Reader Comments (14)

  • Polpot
    Nov 27, 2012 - 4:24AM

    “All hands in the cookie jar: Billions of rupees of taxpayer money untraceable”
    +++++++++++++++++++++++++++++++++++++++++++++++++++++++++
    The graphic for this article shows a coin at the bottom of the jar.
    Of course that is artistic freedom, in reality there is no coin:)

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  • Nov 27, 2012 - 6:49AM

    It is strange to know that Rs. 88.7 billion is untraceable during one quarter in the books of Federal government on the expenditure side.. it raises a question mark on the efficacy of the prevalent system of accounting/ monitoring . In modern days when systems are so streamlined that with the tip of a button total information can be made available such pathetic situation speaks the utter negligence/ carelessness on the part of concerned officials to ensure improvement . Such news/ facts reflects the state of affair and highly degrades the image of the Pakistani system and the apathy to improve.

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  • Trippy Lucifer
    Nov 27, 2012 - 12:27PM

    Creativity and accounting don’t mix very well.

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  • ishrat salim
    Nov 27, 2012 - 1:11PM

    Such irregularity should not be taken so lightly….this is criminal…the govt need money to fight election next year……poor people are dying everyday & the govt is spending tax-payers money left, right & center without giving account of expenditure….is this not criminal ? they show ignorance where such a big amount spent ? & the best part….yet we have people who supports the govt in power…exposing themselves as equal accomplice in such crime….

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  • JS
    Nov 27, 2012 - 2:48PM

    And this is after the fact that they have doled out upto Rs50 billion of our taxes in the stupidity of BISP, Laptops, Yellow Cabs, Sasti Roti etc etc….

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  • PS
    Nov 27, 2012 - 3:35PM

    Inna-lillah-e-wainna;ilaehe-rajeoon!

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  • Parvez
    Nov 27, 2012 - 3:53PM

    @Polpot: You killed it ……. that was hilarious.

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  • jay verma
    Nov 27, 2012 - 4:37PM

    No insult intended but Pakistani officials are just learning how to get the cookies. Our Indian politicos could teach how to vanish billions in a minute, how a snack seller could become owner of 50000cr (Ponty) and how marrying into a political family could make someone one of the most powerful in the world, not to talk how another marriage in the same family could make a unknown exporter jump to play in billions. Our desi mind has different set of mind for moral and honesty.

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  • Out of the box
    Nov 27, 2012 - 7:16PM

    @Trippy Lucifer: This actually is Creative Accounting.

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  • Zzzz
    Nov 27, 2012 - 9:39PM

    All i can say is Jeay Bhutto

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  • Toba Alu
    Nov 27, 2012 - 10:07PM

    In the same period about Rs200 billion were printed. So at least the printing keeps pace with the magically disappearance. If you print faster you can let more Rs disappear magically. Aladdin is still alive, the only question is whether everyone will live happily ever after.

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  • Incognito
    Nov 27, 2012 - 10:10PM

    Democracy is best corruption/looting.

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  • Yusuf
    Nov 27, 2012 - 10:31PM

    Crap, I am a Taxpayer, I do not have a Money Return in My Retirement. 10% waste would pay Benefit to Tax Return Filers. Whats the Benefit of paying Tax in Pakistan.

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  • Maslow
    Nov 27, 2012 - 11:38PM

    @Zzzz:

    You seem to be an accomplice in the loot n plunder….

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