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  • Supplementary bill aimed at documenting economy: Tarin

    Supplementary bill aimed at documenting economy: Tarin

    ISLAMABAD: The Finance (Supplementary) Bill, 2021 is aimed at documentation of economy instead generating revenue, Finance Minister Shaukat Tarin said on Thursday.

    On the floor of the lower house, the finance minister said that the supplementary bill had been drafted to document the economy. He said that in the past no such efforts were made to document the economy.

    READ MORE: Retail sector’s sales worth Rs16 trillion not in tax net: Tarin

    Tarin said that the retail sector had annual turnover of Rs20 trillion, out of which only Rs3.5 trillion was documented.

    He said that the government was endeavoring to document the supply side in order to boost the direct taxes.

    Meanwhile, spokesperson to Minister of Finance, Muzammil Aslam said that supplementary finance bill was aimed at documenting the national economy, capturing the tax value chain and enhancing taxpayers penetration through simplification of revenue system for broadening of the tax base.

    READ MORE: Tarin warns tax evaders of strict actions

    Addressing a press conference along with Adviser to Prime Minister on Parliamentary Affairs Dr Babar Awan, Muzammil said that other objective of the reform measures were to discourage the rent-seeking culture, taxing the rich and transferring it to improve the living standards of under-privileged segments of the society.

    He termed the reform measures introduced in the money bill as historic, which would have not any negative impact on common people in the country, adding that it would help in documentation of economy and overcome the tax evasion.

    He said that previous regimes had put the poor under tax burden, where as the wealth of the ruling class kept on increasing. He said that the supplementary finance bill would have no impact on common people, even if there were any such measures, these have been removed.

    READ MORE: Tarin directs FBR to ensure security of taxpayers’ data

    Muzammil Aslam further said that private sector credit intake witnessed significant increase and reached to Rs1,400 billion, adding that government was also working to promote public-private partnership to improve service delivery of public sector institutions to turn them into profit oriented entities.

    The government had also introduced steps for the autonomy of State Bank of Pakistan he said adding that out of 10 board members, government would appoint 08 members, besides taking measures for strengthening the monetary committee.

    READ MORE: Mini-budget: Advance tax on motor vehicles doubles

  • IMF wants Pakistan to improve tax to GDP ratio to 20%

    IMF wants Pakistan to improve tax to GDP ratio to 20%

    ISLAMABAD: Finance Minister Shaukat Tarin on Tuesday said the International Monetary Fund (IMF) wanted Pakistan to improve tax to GDP ratio to 20 per cent through structural changes.

    Improving tax to GDP ratio to 20 per cent from 9 per cent is in the benefit of the country, he added.

    Addressing to the interactive session with media persons along with Federal Minister for Energy Muhammad Hammad Azhar, Governor State Bank of Pakistan (SBP), Dr Reza Baqir, Minister for Information and Broadcasting, Fawad Hussain Chaudhry, State Minster for Information Farrukh Habib and Special Assistant to Prime Minister on health, Dr Faisal Sultan, he said that the existing tax to GDP ratio in the country was the lowest.

    READ MORE: IMF intervention to add economic miseries of Pakistan

    Tarin said, the IMF wanted Pakistan to collect additional taxes of Rs700 billion by eliminating various tax exemptions, however with negotiations with the team, the government was successful in convincing them of Rs343, hence declining the demand by Rs357 billion. The Minister said that out of this, Rs71 billion is taxed on luxury items of the rich.

    He said that despite the IMF demands, the government did not enhance taxes on various items and also did not do away with some exemptions including pesticide, fertilizer, tractors, and provident fund and food and beverages items. Tarin said: “We also subsidized solar panel and other items and paid 100 per cent tax on laptops.”

    “We have a Rs33 billion subsidy option that we can use as needed,” he said. The finance minister said that the government has given a tax exemption of about Rs350 billion which is not discussed anywhere.

    READ MORE: SBP responds to misconceptions on amendments to State Bank Bill

    He dispelled the misconceptions about the autonomy of State Bank of Pakistan (SBP). He said that even when the SBP is provided autonomy, all of its eight board members would be selected by the government, so there is no question of any compromise.

    The minister said that the government wanted to give autonomy to the State Bank of Pakistan and it would not be like in the past when the government used to overdraft Rs7 trillion and insisted on printing currency notes. He said that a total of eight board members of SBP will be nominated and appointed by the government and: “We want to empower the central Bank board.”

    Answering a question, he said that there is a market of Rs700 billion in the pharmaceuticals sector, but cosmetics and energy products made from this zero duty raw material of pharmaceutical allied will be taxed. “We have kept the exchange rate stable at Rs166,” he added.

    The finance minister said that the government had stabilized the exchange rate, which he said was impacted by the situation in neighboring country, Afghanistan.

    Governor State Bank of Pakistan (SBP), Dr Reza Baqir said that the decision of autonomy of any organization is made on its ownership and appointment there, and then in SBP this work is done by the government.

    READ MORE: Key policy rate goes up to 9.75%; SBP raises 250bps in less than month

    The SBP governor said that the interest rate in SBP is decided by the Monetary Policy Committee which is appointed by the government. He said that the Current Account Deficit (CoD) issue was more prevalent in the previous governments, which have been largely resolved by the present government.

    Federal Minister for Energy, Muhammad Hammad Azhar, said that Pakistan has a gas problem in winter because of which gas reserves in Pakistan are depleting day by day, due to which there is gas shortage at the domestic and industrial level in the country.

    The minister informed that no gas reserves have been discovered in the last few decades and: “We have delivered gas across the country which is primarily a matter of supply and demand.”

    He said that earlier gas reservoir deletion was up to 9 percent but now it has increased to 25 percent.

    Briefing the media persons on the flagship initiative of ‘Sehat Card’, Special Assistant to the Prime Minister on National Health Services, Regulations and Coordination Dr. Faisal Sultan said it was the physical manifestation of a compact done by the state with its citizenry for their well-being.

    READ MORE: Pakistan to emerge as food surplus country: PM Imran

    He said the health card, which provided health insurance worth Rs one million to each family per year, was now launched in Punjab after its successful implementation in Khyber Pakhtunkhwa. Initially, relatively poor people were covered, but the entire citizenry was included under the initiative after thorough analysis.

    From January 1, 2022, he said all the citizens having Azad Jammu and Kashmir, Gilgit Baltistan, Islamabad, and Punjab as the permanent addresses on their Computerized National Identity Card had been entitled to the health card.

    Highlighting contours of the initiative, he said every individual was being covered through his or her family head which had been explained in light of the policy of the National Database and Registration Authority (NADRA).

    He said a wide range of diseases that needed admission to the hospital was being covered under the health cards.

    The diseases included surgical and medical conditions, childbirth, dialysis, cancer and others Dr. Faisal said hospitals from both the private and public sectors were empaneled under the initiative, which would not only provide an opportunity to the government hospitals to improve their services by augmenting their budgets but also help the private sector to invest in far-flung areas.

    A thorough analysis of the facility was being done on a regular basis to address any irregularity if found with its utilization, he said while responding to a query.

    The SAPM said the sudden admission of a member of a family in hospital disrupted the household budget of almost every class including middle, lower-middle and others. The idea was to give health insurance to people to save them from such expenses.

    Terming the Sehat Sahulat Scheme a ‘silent revolution’ in the health infrastructure of the country, he said watchful management of the initiative would make it a game-changer for the sector.

    To another query, he said the initiative would not have any major impact on the public health budget.

    Special counters had been set up in every empaneled hospital where a layman was being sensitized about the programme, he said while responding to another question.

  • PM Imran terms exports, tax collection must for growth

    PM Imran terms exports, tax collection must for growth

    ISLAMABAD: Prime Minister Imran Khan Tuesday termed tax collection and exports key elements to boost the country’s economy.

    “The government was making strenuous efforts to remove all hurdles and bottlenecks faced by exporters, investors and businessmen and to give a spur to the exports industry,” the prime minister said while addressing at an inaugural ceremony of 14th International Chambers Summit 2022 arranged by the Rawalpindi Chamber of Commerce and Industry (RCCI).

    The prime minister said that in the past, no attention was paid to these sectors of the economy which were vital for wealth creation.

    READ MORE: PM Imran Khan announces food subsidy package

    Imran Khan said the exports sector was stagnant in the past, but the incumbent government was providing all facilitation to the exporters and stressed that exporters should be encouraged with awards and other incentives.

    He observed that if the country’s exports were not increased, it could again put pressure on the current account and currency.

    The summit was being attended by presidents of more than 54 regular chambers, 10 small chambers, 13 women chambers and representatives from the development partners, international business community, political parties, ministries and the government institutions.

    The summit will provide an opportunity to the businessmen to seek resolution of their issues besides, presentation of solid proposals to the stakeholders for the formulation of the business-friendly policy of the country.

    The prime minister said the government was constantly endeavoring to introduce incentives for ease of doing business and remove all bottlenecks which would help increase businessmen’s profits and develop a tax culture.

    READ MORE: Imran Khan for monitoring accountants, lawyers to stop financial crimes

    He also termed the introduction of mini-budget as an effort to document the economy. Out of the total estimated Rs11 trillion retail market, only Rs3 trillion market was registered.

    The government was also working on full tax automation, he added.

    The prime minister said: “No government in Pakistan ever faced such big challenges like the fiscal and current account deficits. If our friends, Saudi Arabia and China would not have helped us, we would have defaulted due to our liabilities. We had no reserves to stem the depreciation of rupee.”

    He said the country’s economy was going through a stabilization phase, but unfortunately, then came the Covid 19 which posed the century’s biggest challenge.

    It was worth appreciable how Pakistan was out of the woods. The government not only saved the economy but also the lives of the people, he said, adding, the pandemic brought havoc across the world. In India, its economy was badly impacted with a huge death toll.

    READ MORE: PM Imran launches incentive program for remittances

    The prime minister said that he was criticized by the political opponents for not clamping a complete lockdown. But their decision of smart lockdown was being followed by the British Prime Minister Boris Johnson.

    Then came the challenge of Afghanistan and the flight of dollars which put pressure on rupee, he further added.

    The prime minister said the world also witnessed a record surge in commodity prices as the supply and demand lines were disrupted by the pandemic. The people all over the world had been facing problems, he added.

    About commodity prices, the prime minister expressed the confidence that it would ease soon.

    The prime minister further stressed upon developing a tax culture like the Scandinavian countries that have the highest tax ratio.

    He observed that tax culture could not evolve in the country as the people were reluctant to pay taxes in the past, due to lack of trust over rulers who spent the public tax money on their luxurious living.

    He said the present government was making efforts to spend available resources on the poor segments of society.

    He referred to the health cards initiative under which each family was getting free health facility worth 1 million rupees. Such a health insurance was never thought of in the world.  To lift the living standards of poor segments of society, the government also launched Ehasaas programme and stipends.

    The prime minister recounted that country’s exports for the first time in history reached to $31 billion, remittances recorded $32 billion, tax revenues reached to around Rs6000 billion.

    READ MORE: Pakistan offers huge potential for e-commerce: PM Imran

    The prime minister said the expansion of industry was vital for a country’s economy. In Pakistan, large-scale manufacturing (LSM) witnessed a growth by 15 percent. The corporate profits reached Rs930 billion while private sector offtake touched Rs1138 billion. IT sector exports recorded 70 percent increase reaching to about $3 billion, the prime minister said while enumerating the growth of the economy due to the government’s business-friendly policies.

    He said the construction sector was also on the boom while the rural agriculture economy earned Rs1100 billion where 60 to 65 pc population of the country was residing. The change in their economic condition could be gauged from the increased sale of motorcycles.

    The prime minister said Pakistan was still a cheaper country when compared with petroleum product prices in India and others in the region.

    About state of Madina, the prime minister said it had brought the biggest revolution in the world, transforming the humble people as the leaders of the world.

    He also shared Allama Iqbal’s opinion that a Muslim society would always rise to prominence when it followed the model of Riyasat-e-Madina.

    The prime minister further said that rule of law in a society was critical as in its absence, corruption would assume the role of cancer.

    “Corruption is a symptom of lack of rule of law in a society. Our fight is for the rule of law in Pakistan. It is a difficult one because of different cartels and mafias who did not want the rule of law,” he said terming it a ‘Jihad’ against these mafias to secure future of the country.

    “In a banana republic, there are two sets of laws for the powerful and the weak,” he maintained.

    The prime minister stressed that alongside him (Imran Khan), the society would have to carry out this struggle because it was connected with the economic prosperity. “Nations had been destroyed due to corruption and lack of rule of law,” he added.

    The prime minister said Pakistan had huge potential to excel on the economic front and, in tourism sector alone, they could earn to meet the current account deficit.

    He also assured the participants that all facilities and utilities would be provided for setting up industrial zones along the Rawalpindi Ring Road project.

    Imran Khan informed that the project was in the final stages which was delayed due to corruption that changed its alignment.

    He also regretted that any initiatives like this one always drew speculations only for the real estate business, shooting up prices of lands.

    He assured that government would ensure provision of lands on lease at affordable prices to set up economic zones.

  • Retail sector’s sales worth Rs16 trillion not in tax net: Tarin

    Retail sector’s sales worth Rs16 trillion not in tax net: Tarin

    ISLAMABAD: Finance Minister Shaukat Tarin on Monday said that sales worth Rs16 trillion of the retail sector is not in the tax net.

    “The total sale of retail sector in the country is Rs20 trillion, and Rs16 trillion of it is not in the tax net,” he said while briefing the Senate’s Standing Committee on Finance and Revenue.

    The committee continued its deliberations under the chairmanship of Talha Mehmood on the fourth consecutive day to finalize its recommendations on the Finance Supplementary Bill 2021. The minister said the Federal Board of Revenue (FBR) had refunded some Rs50 billion in six months, which had never happened in any government’s tenure.

    READ MORE: Tarin warns tax evaders of strict actions

    He said the sale of pharmaceutical industry was around Rs700 billion but it was paying tax on only Rs100 billion.

    A number of sectors like fertilizer, pesticide, and agriculture did not fall under the tax regime, he added. Shaukat Tarin said the International Monetary Fund (IMF) wanted to tax Rs700 billion but the government brought the target down to Rs343 billion through negotiations.

    He said the IMF’s review meeting was postponed to January 28 on the government’s request. The minister said no additional tax was imposed on the infants formula milk of normal price, rather only expensive imported one was suggested to be taxed.

    READ MORE: Tarin directs FBR to ensure security of taxpayers’ data

    He clarified that all amendments pertaining to the tax were not being undertaken under the IMF’s pressure as the government already had the agenda to bring tax reforms for the socio-economic development of the common man.

    The committee chairman asked the government take the parliament on board whenever it would opt for any IMF programme in future.

    The minister said the government had a cushion of Rs33 billion to provide subsidy on laptops and solar panels. Tarin said the federal government was also considering to bring the agriculture income under tax and for that Punjab and Khyber Pakhtunkhwa governments had already agreed, while negotiations with the AJK and Gilgit Baltistan governments were in progress. “We will also convince Sindh and Balochistan in this regard.”

    He said the rise in exchange rate was due to international commodity prices and situation in Afghanistan.

    READ MORE: Mini-budget: FBR to generate Rs4.5bn through tax rate increase on cellular services

    The minister added that in order to promote tax culture, the government had launched a cash price scheme for the public. The supply chain could play an important role as Rs15 trillion could be collect from that source.

    Through track and trace system, cigarette and other industries were being brought under tax net, he added. With respect to the State Bank of Pakistan bill, the minister dispelled the impression of compromising the country’s autonomy.

    The government successfully pursued the IMF to omit five important clauses from the bill. The employment period of SBP governor would be reviewed by the government itself.

    While discussing the proposed Supplementary Finance Bill, the committee recommended withdrawing tax on desalination plants, and medical, surgical, dental and veterinary furniture. It also proposed to withdraw tax on machinery and equipment for development of grain handling and storage facilities, including silos.

    READ MORE: Mini-budget: Advance tax on motor vehicles doubles

    The committee also rejected additional tax on imported yogurt, butter, Desi ghee, milk and cream. The meeting was attended by senators Farook Ahmed Naek, Saleem Mandviwala, Sherry Rehman, Mohsin Aziz, Zeeshan Khanzada, Musadik Masood Malik, Syed Faisal Ali Subzwari and Faisal Saleem Rehman.

  • Pakistan’s trade deficit swells by 100% in 1HFY22

    Pakistan’s trade deficit swells by 100% in 1HFY22

    ISLAMABAD: Pakistan’s trade deficit has doubled to $24.8 billion during first half (July – December) of 2021/2022 1HFY22. The trade deficit was $12.36 billion in the same half of the last fiscal year.

    The import bill of the country surged by 63 per cent to $40 billion during the first half of the current fiscal year as compared with $24.47 billion in the same half of the last fiscal year, according to data shared by Arif Habib Limited.

    READ MORE: Pakistan’s trade deficit widens by 112% to $20.59 billion

    The exports registered a growth of 25 per cent to $15.13 billion during first six months of the current fiscal year as compared with $12.11 billion in the corresponding months of the last fiscal year.

    The trade deficit for the month of December 2021 contracted by 18 per cent to $4.14 billion as compared with $5.03 billion in November 2021.

    READ MORE: Pakistan’s import bill surges by 65% in four months

    Import bill of the country declined by 13 per cent to $6.9 billion in December 2021 as compared with $7.93 billion in November 2021. Meanwhile exports of the country also fell by five per cent to $2.76 billion in December 2021 as compared with $2.9 billion in November 2021.

    READ MORE: Pakistan’s trade deficit doubles in first quarter

  • Headline inflation rises by 12.3% in December 2021

    Headline inflation rises by 12.3% in December 2021

    ISLAMABAD: The headline inflation based on Consumer Price Index (CPI) has increased by 12.3 per cent on year-on-year basis in December 2021 as compared to an increase of 11.5 per cent in the previous month and 8.0 per cent in December 2020.

    Pakistan Bureau of Statistics (PBS) on Saturday said that on month-on-month basis, it decreased by -0.02 per cent in December 2021 as compared to increase of 3.0 per cent in the previous month and a decrease of -0.7 per cent in December 2020.

    READ MORE: Headline inflation surges by 11.5% in November 2021

    CPI inflation Urban, increased by 12.7 per cent on year-on-year basis in December 2021 as compared to an increase of 12.0 per cent in the previous month and 7.0 per cent in December 2020. On month-on-month basis, it increased by 0.3 per cent in December 2021 as compared to increase of 2.9 per cent in the previous month and a decrease of -0.3 per cent in December 2020.

    READ MORE: Headline inflation increases by 9.2% in October

    CPI inflation Rural, increased by 11.6 per cent on year-on-year basis in December 2021 as compared to an increase of 10.9 per cent in the previous month and 9.5 per cent in December 2020. On month-on-month basis, it decreased by -0.5 per cent in December 2021 as compared to increase of 3.1 per cent in the previous month and a decrease of -1.2 per cent in December 2020.

    Sensitive Price Indicator (SPI) inflation on YoY increased by 20.9 per cent in December 2021 as compared to an increase of 18.1 per cent a month earlier and an increase of 9.1 per cent in December 2020. On MoM basis, it decreased by -0.4 per cent in December 2021 as compared to increase of 3.6 per cent a month earlier and a decrease of -2.7 per cent in December 2020.

    READ MORE: Comparing inflation target not correct: State Bank

    Wholesale Price Index (WPI) inflation on YoY basis increased by 26.2 per cent in December 2021 as compared to an increase of 27.0 per cent a month earlier and an increase of 5.7 per cent in December 2020. WPI inflation on MoM basis decreased by -0.2 per cent in December 2021 as compared to an increase of 3.8 per cent a month earlier and an increase of 0.3 per cent in corresponding month i.e. December 2020.

  • Tax exemptions worth Rs343 billion withdrawn through mini-budget

    Tax exemptions worth Rs343 billion withdrawn through mini-budget

    The Pakistani government unveiled a mini-budget on Thursday, signaling the withdrawal of tax exemptions amounting to Rs343 billion.

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  • Text of Finance (Supplementary) Bill, 2021

    Text of Finance (Supplementary) Bill, 2021

    ISLAMABAD: The federal government on Thursday presented the Finance (Supplementary) Bill, 2021 which is called mini-budget by many quarters due to changes in taxation system.

    According to Finance Minister Shaukat Tarin the government has reviewed tax exemptions. This withdrawal of tax exemption will not affect the common men.

    Following is the text of the Finance (Supplementary) Bill, 2021:

    THE FINANCE (SUPPLEMENTARY) BILL, 2021

  • Pakistan’s foreign exchange reserves fall to $24.27 billion

    Pakistan’s foreign exchange reserves fall to $24.27 billion

    KARACHI: Pakistan’s foreign exchange reserves experienced a significant decline of $360 million during the week ending December 24, 2021, according to the State Bank of Pakistan (SBP). The drop in reserves highlights ongoing challenges in managing the country’s external accounts amid fluctuating global economic conditions.

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  • Pakistan’s forex reserves decline by $395 million in week

    Pakistan’s forex reserves decline by $395 million in week

    KARACHI: Pakistan’s foreign exchange reserves have declined by $395 million to $24.633 billion by the week ended December 17, 2021, the State Bank of Pakistan (SBP) said on Thursday.

    READ MORE: SBP sets limits for sale of foreign exchange to individuals

    The foreign exchange reserves of the country were $25.028 billion a week ago.

    The official foreign exchange reserves of the SBP were reduced by $414 million to $18.153 billion by the week ended December 17, 2021, as compared with $18.568 billion a week ago.

    READ MORE: State Bank reduces retention period for foreign exchange

    The central bank said that its reserves had fallen mainly due to external debt repayment.

    The foreign exchange reserves held by commercial banks however increased by $19 million to $6.479 billion by the week ended December 17, 2021, as compared with $6,460 billion a week ago.