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  • 10th National Finance Commission constituted

    10th National Finance Commission constituted

    ISLAMABAD: The President of Pakistan on Tuesday constituted the 10th National Finance Commission (NFC) consisting members of federal and provincial governments.

    The finance commission has been constituted with effect from April 23, 2020, consisting following members:

    01. Minister for Finance, Government of Pakistan: Chairman

    02. Minister For Finance, Government of the Punjab: Member

    03. Minister for Finance, Government of Sindh: Member

    04. Minister for Finance, Government of Khyber Pakhtunkhwa: Member

    05. Minister for Finance, Government of Balochistan: Member

    06. Advisor to the Prime Minister on Finance and Revenue: Member

    07. Tariq Bajwa, Government of Punjab: Member

    08. Dr. Asad Sayeed, Government of Sindh: Member

    09. Musharraf Rasool Cyan, Government of Khyber Pakhtunkhwa: Member

    10. Javed Jabbar, Government of Balochistan: Member

    11. Finance Secretary, Government of Pakistan: Official Expert

    The president has also authorized Advisor to the Prime Minister on Finance and Revenue to chair the meeting of the NFC in the absence of Federal Finance Minister.

    A circular issued in this regard stated that in terms of Article 160(2) of the Constitution, the terms of reference for the 10th NFC are as under:

    a. Distribution between the Federation and the provinces of the net proceeds of the following taxes:

    i. Taxes on income, including corporation tax, but not including taxes on income consisting of remuneration paid out of the federal consolidation fund;

    ii. Taxes on the sales and purchases of goods imported, exported, produced, manufactured or consumed;

    iii. Export duties on cotton, and such other export duties as may be specified by the president;

    iv. Such duties of excise as may be specified by the president; and

    v. Such other taxes as may be specified by the president.

    b. Making of grants-in-aid by the federal government to the provincial governments;

    c. Exercise by the federal government and the provincial governments of the borrowing powers conferred by the constitution;

    d. Assessment and allocation of resources to meet expenditures related to Azad Government of the States of Jammu and Kashmir, Government of Gilgit-Baltistan and newly merged districts of Khyber Pakhtunkhwa (erstwhile FATA);

    e. Assessment and allocation of resources to meet expenditures made on security and natural disaster/calamities;

    f. Assessment of total public dent and allocation of resources for its repayment;

    g. Rationalization of subsidies given by the federal and provincial governments in their budgets and agreeing on a mechanism to finance them;

    h. Exploring ways to reduce losses of state-owned enterprises and agreeing on mechanism for sharing these losses between the federal government and the provincial governments;

    i. Any other matter relating to finance referred to the commission by the President.

    The finance division shall, as per the Rule of Business, 1973, provide the secretarial support to the commission.

  • Premium prize bonds get Rs19.21 billion investment; grow by 228 percent

    Premium prize bonds get Rs19.21 billion investment; grow by 228 percent

    KARACHI: The investment in premium prize bonds has surged by 228 percent to Rs19.21 billion by March 2020 as compared with Rs5.86 billion by the same month a year ago.

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  • Tariff Policy Board discusses budget proposals

    Tariff Policy Board discusses budget proposals

    ISLAMABAD: The Tariff Policy Board (TPB) on Monday discussed budget proposals submitted by various stakeholders.

    Advisor to the Prime Minister on Commerce Abdul Razak Dawood chaired the meeting.

    The advisor said that the budget proposals, forwarded by different stakeholders, would be given due consideration by the TPB so that economy of the country could be revitalized at this difficult juncture.

    The meeting was attended by the Secretary Ministry of Commerce, Chairperson National Tariff Commission (NTC), Member Customs Federal Board of Revenue (FBR) and other senior officials of the ministries concerned.

    During the meeting, Abdul Razak Dawood emphasized that the maximum benefits would be given to the industry and the lowest strata of society, as per instructions of the Prime Minister Imran Khan, so that maximum job opportunities could be generated in the shortest possible time.

    In the meeting, the tariff related proposals pertaining to different sectors of the economy, for improving the competitiveness of Pakistan’s exports and giving new impetus to the process of industrialization, were discussed at length.

    The recommendations of TPB on tariff structure would be incorporated in the fiscal budget for the year 2020-2021.

    It was decided by the TPB that the meetings of the Sub-Committee of the board would be convened regularly and the recommendations of the Sub-Committee would be placed before the Tariff Policy Board for deliberations and taking informed decisions thereon.

    The next meeting of the Tariff Policy Board will be held by the end of this week.

  • Inflows of remittances registers 5.5 percent decline in April

    Inflows of remittances registers 5.5 percent decline in April

    KARACHI: The inflow of workers remittances has registered decline of 5.5 percent in April 2020, State Bank of Pakistan (SBP) said on Monday.

    Workers’ remittances during April 2020 amounted to US $ 1.79 billion recording a decrease of US $ 104.4 million or 5.5 percent over remittance received during previous month (March 2020, US $ 1.89 billion).

    The workers’ remittances received during July – April FY20 amounted to US $ 18.78 billion recording an increase US $ 980.6 million or 5.5 percent over remittances received during July – April FY19 (US $ 17.8 billion).

    The remittances during April 2020 (US $ 1,790.0 million) increased by US $ 19.8 million or 1.1 percent over remittance received during corresponding month of FY 19 (US $ 1,770.2 million).

    During April 2020, larger amounts of Workers’ Remittances are received from Saudi Arabia (US $ 451.4 million), USA (US $ 401.9 million), UAE (US $ 353.8 million) and UK (US $ 226.6 million) recording an increase of 14.0 percent for USA whereas a decrease of 0.2 percent, 15.8 percent and 8.8 percent for Saudi Arabia, UAE and UK respectively as compared to March 2020.

  • Foreign exchange reserves increase by $292 million to $18.75 billion

    Foreign exchange reserves increase by $292 million to $18.75 billion

    KARACHI: Pakistan’s foreign exchange reserves of the country have increased by $292 million to $18.755 billion by week ended April 30, 2020, State Bank of Pakistan (SBP) said on Thursday.

    The total foreign exchange reserves were at $18.463 billion a week ago.

    The official reserves held by the central bank increased by $259 million to $12.329 billion by week ended April 30, 2020 as compared with $12.07 billion a week ago.

    The reserves held by commercial banks also increased by $33 million to $6.426 billion by week ended April 30, 2020 as compared with $6.393 billion a week ago.

  • ECC approves free period for cargo, containers landing up to May 31

    ECC approves free period for cargo, containers landing up to May 31

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet non Wednesday approved free period from five working days to 15 working days for cargo and containers landing up to May 31, 2020.

    The ECC considered and approved a proposal by the Ministry of Maritime Affairs for extension due to corona pandemic of free period from five working days to 15 working days for cargo and containers landing for period up to May 31, 2020.

    The ECC of the Cabinet has asked the Ministry of National Food Security and Research to closely monitor the wheat procurement process and actively engage with the food departments and PASSCO to ensure procurement of wheat as per 8.25 million tones target set for procurement by the public sector this year.

    The ECC meeting chaired by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh asked the Ministry of National Food Security and Research to submit to ECC a detailed report in the next two to three weeks on the progress of wheat procurement by PASSCO and provincial food departments and overall wheat production in the country with the help of reliable data and figures to have a clearer picture for better planning in future.

    The ECC also called for exploring possibilities for extending more time to flour mills to procure wheat from the market, allowing inter-provincial movement and preventing smuggling of wheat outside Pakistan.

    The ECC gave the instruction after a report was presented to it by the Ministry of National Food Security and Research on wheat procurement by the public sector in the current season.

    The Ministry, in its report, told the ECC that the wheat procurement target for the wheat crop 2019-20 was set to 8.25 million tones with 4.5 million tones to be procured by Punjab, 1.4 million tones by Sindh, 0.4 million tones by Khyber Pakhtunkhwa, 0.1 million tones by Balochistan and 1.8 million tones by PASSCO.

    So far PASSCO and the provincial food departments had procured 3.96 million tones of wheat, approximately 48 percent of the target while the procurement pace was slow in KP and Balochistan and both the provinces had been requested to speed up the procurement process.

    The ECC also took up another proposal by the Ministry of National Food Security and Research for fixing an intervention price for cotton and after a detailed discussion asked the Ministry to come up with a comprehensive package focusing on cotton seed research, overall research and development, better water management, deregulation of the sector and zoning of crop growing areas to enhance productivity and competitiveness of the local crop.

    The ECC also discussed and approved five separate supplementary grants on different proposals submitted by various divisions.

    On two separate proposals for technical supplementary grants by the Defence Division, Rs 1.665 billion grant was approved for upgradation of Special Telecom Monitoring Project at Directorate ISI and a Rs 500 million for construction of Special Education School at the Defence Complex Islamabad.

    On a proposal by the Prime Minister’s Inspection Commission, a technical supplementary grant of 10.476 million was approved for assistance package for the family of Raees Anwar Abbasi, Senior Private Secretary (BS-19), Prime Minister’s Inspection Commission following his death on 12th August 2019.

    On a proposal for technical supplementary grant by the Poverty Alleviation & Social Safety Division, an amount of Rs12.143 million was approved following transfer of the subject of “Collection of Zakat and Ushr, disbursement of Zakat and Ushr to the Provinces and other areas as per formula approved by the Council of Common Interest” from Religious Affairs & Interfaith Harmony to the PA&SS Division and subsequent transfer of officers along with their posts and budgets by the Ministry of Religious Affairs & Interfaith Harmony to the PA&SS Division.

    On another proposal for technical supplementary grant by the Finance Division, the ECC approved Rs 306.615 million for the Office of Controller General of Accounts during FY 2019-20 for payment of dues on account of Prime Minister’s Assistance Package. On a proposal by the Ministry of Interior, the ECC allowed Capital Development Authority (CDA) Islamabad to allocate Rs 3.05 billion to the Metropolitan Corporation Islamabad (MCI) on loan basis for payment of obligatory expenses for the second half of the FY 2019-20.

    The ECC also considered and approved a proposal for reconstitution of a Committee formed by the ECC in its meeting on 26th March 2020 for examination of incentive package for the National Electronic Vehicle Policy by nominating the Minister for Industries and Production Hammad Azhar in place of Abdul Razak Dawood as Chairman and member of the committee following the cabinet reshuffle and including Secretary Commerce as member of the Committee in place of Adviser to the Prime Minister on Commerce and Investment  Abdul Razak Dawood.

    The ECC also approved another proposal by the Ministry of Maritime Affairs for technical supplementary grant of Rs 58 million as compensation of the demolished structures of Pakistan Coast Guards in order to provide 19 acres land previously in possession of Pakistan Coast Guards and vacated for Gwadar Free Zone and Right of Way of the Eastbay Expressway. On a proposal by the Ministry of Energy for development of a new mechanism/criterion for disbursement of payments to the tune of Rs 300 billion through CPPA-G to the power generators, the ECC asked the Power Division to devise the requisite criterion for fair and equitable disbursement of payments to the power generators and come back to ECC for its approval.

    On another proposal by the Power Division, the ECC approved shifting of most expensive loan from the books of PHL to Government of Pakistan and taking up of Rs 136.454 billion loan in the FY 2019-20 while other loans to be considered in the following financial years accordingly.

    On another proposal by the Power Division, the ECC gave go-ahead to issuance of new sovereign guarantee by the Ministry of Finance in respect of fresh syndicated term finance facility for Rs 41 billion through Power holding Limited (PHL) for the purpose of set off/adjustment of existing PHL finance facility of Rs 41 billion executed in pursuance of ECC decision made on 7th June 2017. The ECC, on a proposal by the Petroleum Division, asked the Finance Division to transfer Rs 11.7 billion in the NBP account for ensuring remittances to Kuwait as per schedule.

  • Fiscal deficit contracts at 3.8pc in first nine months

    Fiscal deficit contracts at 3.8pc in first nine months

    ISLAMABAD: The fiscal deficit has contracted at 3.8 percent during first nine months of current fiscal year. The budget deficit was 5 percent in the same moths of the last fiscal year.

    Analysts at Topline Securities said that importantly, the primary balance during the period clocked in at 0.4 percent of GDP or Rs194 billion (last year was -1.2 percent of GDP or -Rs463 billion), close to the initial target of 0.6 percent set by the IMF.

    IMF is likely to review these targets going forward because of the implications of COVID-19 outbreak, the analysts said.

    In the 3QFY20, the fiscal deficit came in at 1.6 percent of GDP compared to 2QFY20’s fiscal deficit of 1.6 percent of GDP and 1QFY20’s fiscal deficit of 0.7 percent of GDP.

    All the four provinces recorded a budgetary surplus during the first nine months of current fiscal year, while only Punjab recorded a budgetary deficit in 3QFY20.

    During the 9MFY20, Total Revenues increased by 31 percent YoY, where the improvement was led by 14 percent YoY higher Tax Revenues (Mar-2020 revenues partially affected by COVID-19) and 160 percent YoY higher Non-Tax Revenues.

    Looking into further breakup of revenues, government collected 15 percent YoY higher Direct taxes, 18 percent YoY higher Sales Tax and 40 percent YoY higher Petroleum Levy during 9MFY20. In 3QFY20, the same were down by 16 percent QoQ, 16 percent QoQ and 17 percent QoQ, respectively.

    The government hugely benefitted from 360 percent YoY higher profits from State Bank of Pakistan (SBP) in 9MFY20 (down 13 percent QoQ in 3QFY20), which is around 1.4 percent of GDP.

    On the expenditures front, Total Expenditure increased by 16 percent YoY. Current Expenditures increased by 17 percent YoY, where Mark-up Payments were up 29 percent YoY and Defense Expenditures were up 4 percent YoY. Excluding these items, government’s own expenses increased by 14 percent YoY during 9MFY20.

    The decline in interest rates helped the government reduce the interest bill by 16 percent QoQ during 3QFY20.

    The Development Expenditure remained steady, where growth of 14 percent YoY was witnessed in 9MFY20. In 3QFY20, the same declined by 6 percent QoQ.

    In the wake of COVID-19, government’s expenses on Social Protection during the 3QFY20 clocked in at Rs13.9bn (vs. Rs701mn in 2QFY20 and Rs547mn in 1QFY20).

    Pakistan’s fiscal deficit to clock in at 9.0 percent of GDP in FY20 due to implications of COVID-19 on both revenues and expenditures, the analysts estimated.

  • Exports fall by 54 percent in April amid COVID-19 pandemic

    Exports fall by 54 percent in April amid COVID-19 pandemic

    ISLAMABAD: Pakistan’s exports have declined by 54 percent in April 2020 owing to ongoing lockdown and cancellation of foreign orders.

    According to trade data released by Pakistan Bureau of Statistics (PBS) the exports were at $957 million in April 2020 as compared with $2.09 billion in the same month of the last year.

    The massive decline in exports can be attributed to cancellation of foreign orders due to outbreak of coronavirus. Besides, the manufacturing activities were remained halted due to lockdown to prevent the COVID-19 pandemic.

    The existing situation also reduced the import bill in the month under review. The imports fell by 34.5 percent to $3.09 billion in April 2020 as compared with $4.714 billion in April 2019.

    The exports in first ten months (July – April) 2019/2020 also fell by four percent to $18.41 billion as compared with $19.16 billion in the corresponding period of the last fiscal year.

    On the other hand the import bill fell by 16.5 billion to $39.9 billion in the first ten months of current fiscal year as compared with $45.4 billion in the corresponding period of the last fiscal year.

    The trade deficit shrank by 25.68 percent to $19.49 billion during July – April 2019/2020 as compared with the deficit of $26.23 billion in the same period of the last fiscal year.

  • Sales tax rate reduction: Think tank to discuss with FBR

    Sales tax rate reduction: Think tank to discuss with FBR

    Islamabad – The Federal Government’s think tank convened its third meeting on Sunday to deliberate on fiscal measures, including sales tax, aimed at mitigating the economic challenges arising from the COVID-19-induced slowdown. The discussion, chaired by Advisor to the Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Shaikh, emphasized the critical role of sales tax adjustments in spurring consumer spending and economic recovery.

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  • Headline inflation contracts to 8.5 percent in April

    Headline inflation contracts to 8.5 percent in April

    ISLAMABAD: The headline inflation based on Consumer Price Index (CPI) contracted to single digit i.e. 8.5 percent in April 2020 as compared with an increase of 10.2 percent in the previous month, Pakistan Bureau of Statistics (PBS) said on Friday.

    The PBS said that CPI inflation general increased by 8.5 percent on year-on-year basis in April 2020 as compared to an increase of 10.2 percent in the previous month and 8.3 percent in April 2019.

    On month-on-month basis, it decreased by 0.8 percent in April 2020 as compared to an increase of 0.04 percent in the previous month and an increase of 0.7 percent in April 2019.

    CPI inflation Urban increased by 7.7 percent on year-on-year basis in April 2020 as compared to an increase of 9.3 percent in the previous month and 8.4 percent in April 2019. On month-on-month basis, it decreased by 0.7 percent in April 2020 as compared to an increase of 0.1 percent in the previous month and an increase of 0.8 percent in April 2019.

    CPI inflation Rural, increased by 9.8 percent on year-on-year basis in April 2020 as compared to an increase of 11.7 percent in the previous month and 8.1 percent in April 2019. On month-on-month basis, it decreased by 1.1 percent in April 2020 as compared to a decrease of 0.1 percent in the previous month and an increase of 0.6 percent in April 2019.

    Sensitive Price Indicator (SPI) inflation on YoY increased by 9.0 percent in April 2020 as compared to an increase of 11.8 percent a month earlier and an increase of 10.0 percent in April 2019.

    On MoM basis, it decreased by 2.0 percent in April 2020 as compared to a decrease of 0.3 percent a month earlier and an increase of 0.5 percent in April 2019.

    Wholesale Price Index (WPI) inflation on YoY basis increased by 5.1 percent in April 2020 as compared to an increase of 9.2 percent a month earlier and an increase of 17.1 percent in April 2019.

    WPI inflation on MoM basis decreased by 2.1 percent in April 2020 as compared to a decrease of 0.9 percent a month earlier and an increase of 1.8 percent in corresponding month of last year i.e. April 2019.