ISLAMABAD: About 37 per cent of tax revenue will be spent on foreign debt servicing in the budget for the financial year 2016-17. Annual deficit of the current fiscal year 2016-17 has been fixed 3.8 per cent of GDP and it is proposed to obtain long term foreign loan amounting to Rs 234.4 billion and domestic loan amounting to Rs 1041.16 billion to make up for annual deficit. According to official documents available with Daily Times, the annual federal deficit is estimated at Rs 1615 billion in the current financial year. The annual deficit will stand reduced to 1276 billion with acquiring Rs 339 billion under the head of provincial surplus. This deficit will constitute 3.8 per cent of GDP. The total revenue collection target has been set at Rs 4915.6 billion. The target for collecting Rs 3621 billion under FBR tax revenue head, Rs 335.1 billion under other taxes and Rs 959.5 billion against non tax revenue has been set. 43 per cent share of overall revenue collection which comes to Rs 2135.59 billion will be disbursed among the provinces. The volume of total expenditure of federation is proposed to be set at Rs 4394.7 billion in the financial year 2016-17. Rs 2779.7 billion will be acquired from revenue receipts for making this payment to federation. Against the remaining deficit of Rs 1615 billion, payment of Rs 339 billion will be made through provincial surplus, Rs 234.4 billion through foreign debt and Rs 1041.6 billon. The total expenditure for the fiscal year 2016-17 is estimated at Rs 4394.7 billion while Rs 1360 billion have been allocated for payment of mark up on foreign and domestic loans, Rs 245 billion for payment of pension, Rs 860.2 billion for defence matters, Rs 441.6 billion for grants and transfer, Rs 140.6 billion for subsidies and Rs 352.8 billion for civil government affairs. Rs 800 billion are proposed to be earmarked for federal development projects in development funds and Rs 184.6 billion for other development expenditure. Overall development budget for the current financial year is proposed to be Rs 1675 billion while payment of mark up on external and domestic loans stand at Rs 1360 billon. Upsurge in debt is multiplying the hurdles on the way to national development. Tax revenue collection target for FBR has been set at Rs 3621 billion. 37 per cent of tax revenue is paid against mark up on loans. During the financial year 2015-16 a sum of Rs 1315.016 was paid on account of interest on loans including Rs 118.360 billion on foreign loans and Rs 1196.655 billion on domestic loans. Tax revenue collection target of FBR has been increased to Rs 3621 billion against fiscal year 2015-16 target of Rs 3103.700 billion. The collection of direct tax target has been increased by Rs 112 billion and indirect taxes collection by Rs 300 billion. The payment of mark up on loans has increased to Rs 1360 billion as against Rs 1279.895 billion in the last year of 2015-16.