Category: Finance

Explore finance-related stories with Pakistan Revenue, your source for the latest updates on Pakistan’s economy, financial trends, and market insights. Stay informed with real-time economic developments.

Remittances surge by 24 percent in eight months

KARACHI: The inflow of workers’ remittances has increased by 24 percent to $18.74 billion during first eight months (July – February) 2020/2021, according to data released by State Bank of Pakistan (SBP) on Thursday.

The SBP received $15.104 billion as workers’ remittances during the same months of the last fiscal year.

The inflows during the month of February 2021 also posted 24 percent increase to $2.26 billion when compared with $1.82 billion in the same month of the last year.

The inflows recorded robust growth of 46.7 percent, 56.8 percent and 19.5 percent from USA, UK and Saudi Arabia, respectively, during first eight months of the current fiscal year.

March 11, 2021
ECC approves cotton import through land route

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved import of cotton through land route subject to fulfillment of codal formalities.

Federal minister for Finance and Revenue, Dr. Abdul Hafeez Shaikh, chaired the meeting of the ECC.

The ministry of commerce tabled a summary before the ECC seeking permission for import of cotton from Afghanistan and Central Asian States through land route via Torkham border to bridge the gap between supply and demand and to ensure sufficient availability of cotton for promoting textile exports.

The ECC had granted such permission earlier to workout necessary arrangements with reference to Plant Quarantine Rules to meet Sanitary and Phytosanitary (SPS) requirements for import of cotton via land routes.

The ministry of commerce requested to extend the above permission for import of cotton via land route during the current financial year. The ECC approved the said request subject to fulfillment of codal formalities.

Ministry of Industries and Production presented a ‘Ramadan Relief Package-2021’ in accordance with the directive of the Prime Minister to provide maximum relief to the marginalized segments of the society during the holy month of Ramadan.

The Utility Stores Corporation would subsidize 19 essential items under the proposed relief package entailing subsidy equivalent to approx. Rs. 7.8 billion including wheat flour, sugar and ghee which have significant differential vis-a-vis prevailing prices in the domestic markets.

The MD, USC briefed the forum that procurement would start from 01 April, 2021 to ensure availability of basic items at discounted prices across 4000 outlets of USCs throughout the country. The Committee directed MD USC to coordinate with Finance Division for timely release of funds to ensure well-timed procurement and other contingent arrangements.

The ministry of industries and production presented another summary seeking permission regarding operation of two plants namely Agritech and Fatima Fertilizer from March till November, 2021 to produce urea from SNGPL based plants.

The underlying rationale is to bridge the gap between estimated demand and actual domestic production of urea in the country.

The Committee approved operations of the above-mentioned plants with a direction that the Ministry may closely monitor the demand-supply situation and take decision to import urea, if needed, as per requirement during the current year.

Secretary, Ministry of National Health Services, Regulation and Coordination tabled a summary for exemption of taxes and duties on import of auto disable syringes and raw material needed for local manufacturing of auto disable syringes in the country.

The Secretary Health briefed the forum about efforts underway to switch from conventional syringes to auto disable syringes as reuse of conventional syringes leads to blood borne diseases in Pakistan such as hepatitis, HIV etc.

The ECC approved the summary, in principle, and directed the Ministry of Health to hold a follow-up meeting with the Law Division to fine tune details.

The ECC also considered a summary regarding exemption of Federal Excise Duty for 10 soft-skin vehicles imported by Food and Agriculture Organization (FAO) to be used by the Department of Plant Protection (DPP) for locust control operations. Ministry of NFS&R requested for a one-time exemption of Federal Excise Duty amounting to Rs.10.3 million for 10 vehicles.

After due deliberation, the ECC constituted a Committee with representatives from Law Division, FBR and Ministry of National Food Security and Research for further discussion and submission of updated proposal before the Committee.

Secretary, Ministry of the Information Technology and Telecommunication presented a summary before the Committee based on recommendations by a Cross-stakeholder Committee for addressing critical issues of Cellular Mobile Industry for digital enablement such as reduction in NADRA Biometric Verification Charges (BVC), License renewal under further Spectrum Price etc.

After detailed discussion, the ECC constituted a sub-committee under the Chairmanship of the Adviser to the Prime Minister on Institutional Reforms and Austerity Ishrat Hussain with Secretary IT, Secretary Finance and a representative from PTA as its members to deliberate further and present before the ECC accordingly.

Secretary, Ministry of Communications updated ECC on National Freight and Logistics Policy (NFLP) discussed in earlier meeting held on 20th January, 2021.

The Ministry of Communications has segregated the proposals into two broad categories in line with the earlier directive of the Committee.

The ECC directed to discuss the proposals involving multiple stakeholders as envisaged under the NFLP, through an Institutional framework, steered by the Deputy Chairman Planning for evolving consensus among all stakeholders including provincial representatives for a way forward.

Petroleum Division updated the ECC about the recommendations firmed up by a sub-committee established in line with the earlier decision of the ECC dated 28 Jan, 2021 regarding review of Oil Marketing Companies (OMCs) and Dealers Margins on Petroleum products.

After detailed discussion, the ECC approved to revise OMCs and Dealers Margins on the basis of 85% of the latest average core inflation with immediate effect, and directed to expedite a study by PIDE.

The Power Division submitted another summary about re-targeting of Power Sector subsidies (phase-I). The Committee considered and approved the proposals recommending that Power Division will complete the analysis based on the listed principles and submit specific recommendations on thresholds and rates for the consumers before the ECC by 31st March, 2021.

The following Technical Supplementary Grants were also approved by the ECC:

1. Rs. 1056 million for the Ministry of Federal Education and Professional Training for completion of Projects related to COVID-19.

2. Rs. 1.5 billion for the Ministry of Housing and Works for disbursement of interest free loans to the borrowers under Prime Minister’s Low-Cost Housing Scheme.

3. Rs.334.306 million for the Ministry of Interior for the payment of salaries / subsistence allowance to the Civil Armed Forces deployed in the Peacekeeping Missions.

4. Rs.31.50 million for meeting expenses of Federal Insurance Ombudsman Secretariat working under the Ministry of Law and Justice.

5. Rs. 9.685 million for Pakistan National Shipping Corporation, Karachi to clear the dues of M/s Coniston against PSM.

6. Rs.67.358 million for the Cabinet Division for meeting various expenses.

7. Rs. 419 million were approved to facilitate Pakistan Central Cotton Committee to carry out its research and development activities.

Federal Minister for National Food Security & Research Syed Fakhar Imam, Federal Minister for Energy Omar Ayub Khan, Federal Minister for Planning, Development and Special Initiatives Asad Umar, Federal Minister for Industries and Production Hammad Azhar, Federal Minister for Railways Azam Khan Swati, Federal Minister for Privatization Muhammad Mian Soomro, Adviser to PM on Commerce Abdul Razak Dawood, Governor State Bank of Pakistan Reza Baqir, SAPM on Revenue Dr. Waqar Masood, SAPM on Power Tabish Gauhar, Federal Secretaries from MNS&F, Ministry of Interior, Ministry of Maritime Affairs, National Health Services, Law and Justice Division, Ministry of Information Technology & Telecommunication, Chairman Board of Investment, Deputy Chairman Planning Commission, MD Utility Stores Corporation and other senior officials participated in the meeting.

March 10, 2021
Bill to be presented for abolishing tax exemptions

ISLAMABAD: The government will present a bill before the parliament to abolish tax exemptions that are discriminate towards many individuals and sectors of the economy.

Minister for Finance and Revenue Dr. Abdul Hafeez Shaikh said this at a press conference on Tuesday.

He said many companies and sectors are exempted from the taxes and to abolish such discrimination and to bring uniform system all such exemptions would be brought under the law.

He said under Prime Minister Imran Khan’ vision to collect taxes in a way that poor people should not be affected, tax system is being reformed.

He said that the cabinet approved draft of State Bank of Pakistan (SBP) Amendment Bill 2021 to give absolute autonomy to the Central Bank.

He said the central bank’s core objective was to control inflation and to fight increase in prices and the law also aimed at providing the Bank further autonomy to ensure that it fulfills its objectives of price stability with complete independence.

He said the law would also help SBP to independently fulfill the requirements of monetary policy and exchange rates without intervention of the the government. The term of Governor SBP, he said would also be extended to five years.

Hafeez Shaikh said the government would stop borrowing from the central bank so that the federal government could manage financing by its own resources or by lending from the commercial banks.

Further he said the monetary and fiscal coordination board would also be abolished and instead the government would arrange coordination through special committees.

The minister informed that the Governor would be appointed by the President of Pakistan and the Bank would only be accountable to the Parliament.

He informed that the second law approved by the cabinet was about Pakistan’s State Owned Entities (SOEs) that were engaged in business activities.

The purpose of this law is to provide more authority to the SOEs by stopping intervention of the ministries and the ministers.

The board and the Chairman would be appointed by the government under a transparent and professional way and the CEOs of the institutions would appoint the boards, instead of the minsters so that professionalism in these areas should be promoted.

Further he said the CEOs would be made more secure so they run their companies without any pressure to compete with the private sector.

He pointed out that these bills would be followed on fast track basis.

About International Monetgary Fund, Shaikh said Pakistan and the IMF were currently engaged to resume the Extended Fund Facility that was paused for few months due to COVID-19.

“The IMF international Board would meet soon and financial lending for Pakistan will resume”, he added.

Adviser to Prime Minister on Institutional Reforms Dr. Ishrat Hussain on the occasion said major reforms in the institutions were being introduced to promote transparency and professionalism in the government departments.

He said the due to these reforms, losses in government institutions were drastically reduced and efforts were made to wipe out all losses in future.

To a question, Shaikh said privatization was a difficult task and big investors were needed in this process.

He said the privatization programme was being extended and the process was now resumed after a temporary halt due to COVID-19.

To another question, he said the government was minimizing gap between the income and the expenditure and the primary fiscal balance was in surplus of Rs 400 billion.

Besides, he said the government had also not borrowed a single rupee from the Central Bank nor it provided additional grants to the government departments.

About inflation, he said the government had not control over the prices of such basic kitchen items which are imported from abroad.

However, the government in this regard can only do to provide assistance to the extreme people and it is providing financial support to over 15 million, he added.

Further he said at utility stores too, the government was providing the basic usable items at affordable prices to the targeted income group. He informed that the targeted subsidy would be further extended in future.

Minister for Industries Hammad Azhar said that utility stores was providing wheat flour at a subsidized rate of Rs 800 per 20 kg bag, sugar at Rs 68 per kg, ghee at Rs 125 per kg and the price was retained for over a year an it has been decided that this price would continue in future as well.

Chairman Federal Board of Revenue Javed Ghani and Secretary Finance Kamran Afzal were also present on the occasion.

March 9, 2021
Grant of disparity reduction allowance at 25pc for government employees notified

ISLAMABAD: The finance division has notified grant of disparity reduction allowance at 25 percent of the basic pay to the civil employees in BS-1-19 of the federal government.

Sources on Friday said that the finance division had issued a notification for the approval of the Federal Government for grant of Disparity Reduction Allowance at 25percent of the basic pay of Basic Pay Scales 2017 with effect from March 01, 2021.

This allowance shall be admissible to civil employees in BPS 1-19 of the Federal Government, (including employees of the Federal Secretariat and attached departments), who have never been allowed additional allowance/allowances equal to or more than 100 percent of the basic pay (whether frozen or not) or performance allowance subject to the following conditions:

a) This Allowance will not be admissible to the employees of the organizations as mentioned in Annexure-I and those employees who are drawing additional allowance/allowances equal to or more than 100 percent of the basic pay whether frozen or otherwise);

b) This allowance will be frozen at the level drawn on March 01, 2021

c) This Allowance will be subject to Income Tax;

d) This Allowance will be admissible during leave and entire period of L.P.R. except during extra ordinary leave;

e) This Allowance will not be treated as part of emoluments for the purpose of calculation of Pension/Gratuity and recovery of House Rent;

f) This Allowance will not be admissible to the employees during the tenure of their posting/deputation abroad;

g) This Allowance will be admissible to the employees on their repatriation from posting/deputation abroad at the rate and amount which would have been admissible to them, had they not been posted abroad;

h) This Allowance will be admissible during the period of suspension;

i) The term “Basic Pay” will also include the amount of Personal Pay granted on account of annual increment (s) beyond the maximum of the existing pay scales.

Annexure-I

Following is the List of organizations/Employees drawing Extra Allowances

1. President/ PM Secretariat

2. Federal Board of Revenue

3. Health personnel/ Health establishments

4. National Accountability Bureau (NAB)

5. All Superior Courts

6. Law & Justice Commission of Pakistan

7. Islamabad Capital Territory Police

8. National Highways & Motorways Police

9. Islamabad Model Traffic Police

10. Airport Security Force

11. Civil Armed Forces

12. Intelligence Bureau

13. Inter Services Intelligence

14. Federal Investigation Agency

15. National Highways & Motorways Police

16. National Assembly

17. Senate Secretariat

18. Parliamentary Affairs Division

19. District Population Welfare Office

20. Clinical Regional Training Institute

21. Directorate General of Special Education

22. National Institute of Rehabilitative Medicines

23. National Institute of Special Education

24. Rehabilitation Centre for Children with Development Disorders Islamabad

25. National Council for Rehabilitation

26. National Braille Press Islamabad

27. Rehabilitation Unit Vocational Rehabilitation & Employment of Disabled persons Islamabad

28. National Mobility & Independence Training Centre

29. National Training Centre for Special Persons G-9/2 Islamabad

30. Vocational Rehabilitation & Employment of Disabled persons SC-1 Islamabad

31. Provision of Hostel facilities at NSEC VHC Islamabad

32. National Special Education Centre for PHC Islamabad

33. National Special Education Centre

34. National Library & Resource Centre Islamabad

35. National Trust for the Disabled

36. Common Unit to Manage Global Fund

37. Federal Services Tribunal

38. Central Health Establishment and its Field Offices

39. Federal Tax Ombudsman

40. Appellate Tribunal Inland Revenue

41. Customs Excise and Sales Tax Appellate Tribunal

42. Environmental Protection Tribunal

43. Accountability Courts

44. Special Judge (Customs Taxation & Anti Smuggling)

45. Special Judge (Central)

46. Banking Courts

47. Special Courts (Control of Narcotics Substance)

48. Special Court (Offence in Banks)

49. Special Court (Anti Terrorism)

50. Competition Appellate Tribunal

51. Intellectual Property Tribunal

52. Drug Courts

53. Anti Dumping Appellate Tribunal

54. Senior Civil Judge West Islamabad

55. Senior Civil Judge East Islamabad

56. District & Session Judge West Islamabad

57. District & Session Judge East Islamabad

58. The civilian employees of PAF who are drawing additional allowance as allowed vide Finance Division’s U.O. note bearing No.F.1(7)lmp/2009-705, dated 19-12-2012.

March 5, 2021
Trade deficit widens by 24pc in February

ISLAMABAD: The trade deficit has been widened by 24 percent Year on Year (YoY) in February 2021 owing to increase in imports and decline in exports, according to data released by Pakistan Bureau of Statistics (PBS) on Friday.

The import bill for the month of February 2021 increased to $4.56 billion as compared with $4.16 billion in the corresponding month of the last year, showing an increase of 9.55 percent.

However, the exports fell by 4.12 percent to $2.05 billion in February 2021 when compared with $2.13 billion in the same month of the last year.

The trade deficit widened by 10.64 percent to $17.536 billion in first eight months (July – February) 2020/2021 when compared with the deficit of $15.85 billion in the corresponding months of the last fiscal year.

The imports posted 7.49 percent growth to $33.84 billion during first eight months of the current fiscal year as compared with $31.48 billion in the corresponding months of the last fiscal year.

The exports registered an increase of 4.29 percent to $16.3 billion during July – February 2020/2021 as compared with $15.63 billion in the corresponding period of the last fiscal year.

March 5, 2021
Foreign exchange reserves increase to $20.133 billion

KARACHI – The State Bank of Pakistan (SBP) has reported a positive development in the country’s economic indicators as the liquid foreign exchange reserves increased by $91 million to reach $20.133 billion by the week ending February 26, 2021.
(more…)

March 5, 2021
Trade deficit widens to $17.3bn in July – February

ISLAMABAD: Pakistan’s trade deficit widened by 9 percent or $17.3 billion during first eight months (July – February) 2020/2021 of the current fiscal due to surge in import bill for the period, according to provisional data released by the ministry of commerce.

The trade deficit widened to 17.3 billion during first eight months of the current fiscal year as compared with $15.87 billion in the same months of the last fiscal year.

Import bill increased to $33.6 billion during the period under review as compared with $31.5 billion in the corresponding period of the last fiscal year, showing an increase of 6.6 percent.

On the other hand, exports posted a growth of 4.2 percent to $16.3 billion during July – February 2020/2021 as compared with $15.64 billion in the same period of the last fiscal year.

Abdul Razak Dawood, Adviser to Prime Minister of Pakistan for Commerce and Investment, in a tweet message commented that most of this growth came from increase in import of raw material and intermediate goods, which increased by 7.8 percent.

The import of capital goods declined by 0.2 percent, while that of consumer goods decreased by 7.3 percent, he added.

“This shows that the Make-in-Pakistan Policy of MOC is delivering dividends and industrial activity in the country is increasing. The import bill this year also increased because we had to import Wheat and Sugar to stabilize the market prices,” he said.

Cotton was also imported to to help the Export-oriented industry so that the exports are not hampered.

During Jul-Feb 2021, the import of Wheat amounted to USD 909 million, Sugar USD 126 million and Cotton USD 913 million (total of USD 1,948 million).

March 2, 2021
Istanbul-Tehran-Islamabad freight train resumes operation on March 04: Razak

ISLAMABAD: Razak Dawood, Adviser to Prime Minister of Pakistan for Commerce and Investment, on Tuesday said that after a span of nine years the Istanbul-Tehran-Islamabad (ITI) Freight Train will resume operations from March 4, 2021.

In a tweet message, the adviser said that Istanbul-Tehran-Islamabad (ITI) Freight Train will resume operations from March 04, 2021 after nine years.

“It will complete the one-side trip in 12-days, with capacity to move 750 MT of goods.”

This is a testament of friendship between the three countries and will go a long way in facilitating movement of goods between Pakistan, Iran & Turkey.

“I congratulate Senator Azam Swati for making this possible,” he said.

I call on our exporters to take benefit of this alternative route and mode of transport and contact the ministry of commerce for any facilitation.

March 2, 2021
Finance ministry hopes achieving annual fiscal targets

ISLAMABAD: The finance ministry is hopeful of achieving annual fiscal targets as half year (July – December) 2020/2021 fiscal position indicates that it will remain on track in the remaining half.

The ministry of finance on Monday issued Mid-year Budget Review Report for Fiscal Year 2020/2021. The finance division said that the fiscal consolidation measures taken by the government had resulted in financial discipline, higher revenues and controlled expenditures.

“The same strategy will be followed during the remaining period of the current fiscal year to achieve the fiscal sustainability,” it added.

The continuity in fiscal consolidation, stable exchange rate, improved current account and better financial management, present a promising economic outlook, the finance division said.

It said that the borrowing operations remained quite successful and in-line with the Medium-Term Debt Management Strategy (MTDS FY20 — FY23) of the Government. Government is following the policy of zero borrowing from SBP since July 2019 and is maintaining a cash buffer with SBP for meeting the contingencies/ obligations.

Following are the key highlights:

Similar to last year, domestic borrowing was made entirely from the financial markets during first half of current fiscal year. No borrowing was made from SBP. In fact, an amount of Rs. 285 billion was repaid to SBP during first half of ongoing fiscal year.

All borrowings needed to finance the fiscal deficit were made through longer-term debt while Government retired a portion of short-term debt (T-Bills) by around Rs. 579 billion during this period.

The government introduced various new instruments during first half of the current fiscal year to further develop the government securities market, attract more diversified investor base and to provide more flexibility and options to the investors as well as to the government.

— 3, 5 and 10-year floating rate PIBs with quarterly coupon payment frequency are being issued since October 2020.

— the government has started issuance of 5-year Sukuk with fixed rate rental payments since July 2020.

— The government also introduced 2-year floating rate PIBs in November 2020 with quarterly coupon payment frequency and fortnightly interest rate resetting. Existing Floating Rate PIBs carry interest rate reset of 6-month while interest rate reset in this instrument in only two weeks.

Similar to conventional bond, the government introduced re-opening mechanism in Sukuk auctions in July 2020 to increase liquidity of the Sukuk issue and lower costs for the government.

Considering the encouraging participation and demand from the market in the recent auctions of 15 and 20-year PIBs, the government has decided to issue 30-year PIBs with effect from January 2021.

In order to enhance participation and competition in primary and secondary markets for government debt, the government banned all institutional investors in National Savings Schemes from July 2020; and

Most of the external debt was raised from multilateral and bilateral sources on concessional terms (low cost and longer tenor).

March 1, 2021
Headline inflation increases by 8.7pc in February

ISLAMABAD: The headline inflation i.e. Consumer Price Index (CPI) increased by 8.7 percent in February 2021 on year on year basis, Pakistan Bureau of Statistics (PBS) said on Monday.

CPI inflation General, increased by 8.7 percent on year-on-year basis in February 2021 as compared to an increase of 5.7 percent in the previous month and 12.4 percent in February 2020.

On month-on-month basis, it increased by 1.8 percent in February 2021 as compared to a decrease of 0.2 percent in the previous month and a decrease of 1.0 percent in February 2020.

CPI inflation Urban, increased by 8.6 percent on year-on-year basis in February 2021 as compared to an increase of 5.0 percent in the previous month and 11.2 percent in February 2020.

On month-on-month basis, it decreased by 2.3 percent in February 2021 as compared to a decrease of 0.2 percent in the previous month and a decrease of 1.1 percent in February 2020.

CPI inflation Rural, increased by 8.8 percent on year-on-year basis in February 2021 as compared to an increase of 6.6 percent in the previous month and 14.2 percent in February 2020. On month-on-month basis, it increased by 1.1 percent in February 2021 as compared to a decrease of 0.3 percent in the previous month and a decrease of 1.0 percent in February 2020.

The Sensitive Price Indicatory (SPI) inflation on YoY increased by 11.9 percent in February 2021 as compared to an increase of 7.7 percent a month earlier and an increase of 14.5 percent in February 2020. On MoM basis, it increased by 3.1 percent in February 2021 as compared to a decrease of 0.8 percent a month earlier and a decrease of 0.8 percent in February 2020.

Wholesale Price Index (WPI) inflation on YoY basis increased by 9.5 percent in February 2021 as compared to an increase of 6.4 percent a month earlier and an increase of 12.7 percent in February 2020. WPI inflation on MoM basis increased by 2.2 percent in February 2021 as compared to an increase of 2.5 percent a month earlier and a decrease of 0.7 percent in corresponding month i.e. February 2020.

March 1, 2021