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  • Dollar jumps to historic high at PKR 178.98

    Dollar jumps to historic high at PKR 178.98

    KARACHI: The US dollar jumped to the historic high against the Pak Rupee at Rs178.98 on Monday owing to foreign currency demand for import payments.

    The rupee ended Rs178.98 to the dollar from last Friday’s closing of Rs178.51 in the interbank foreign exchange market.

    READ MORE: Dollar eases by 12 paisas to PKR in interbank

    The dollar previously hit all-time high at Rs178.63 on March 10, 2022.

    Currency experts said that the rupee was under pressure because the market was opened after two weekly holidays.

    Further, dollar demand for commodity imports related to the holy month of Ramzan put pressure on the local currency.

    READ MORE: Rupee ends flat to dollar, maintains all-time low level

    The volatile oil prices in international markets also brought down the local currency.

    The oil prices in the international markets are still above $108 per barrel, which is much above the calculated prices of petroleum products in the domestic market.

    It is important to note that the PTI government had announced to reduce Rs10 per liter each on petrol and diesel. In order to lower the prices. The government is absorbing billions of rupees loss every month through zero rating of sales tax on petroleum products and lowering the petroleum levy.

    READ MORE: Dollar inches up to make new high at PKR 178.63

    Pakistan is one of the major importers of petroleum products and changes in the prices directly affects the oil import bill.

    The import bill of petroleum group recorded an increase of 107 per cent to $11.7 billion during the first seven months of the current fiscal year as compared with $5.64 billion in the corresponding months of the last fiscal year.

    The fall in foreign exchange reserves also deteriorating the rupee value. The liquid foreign exchange reserves of the country slipped by $206 million to $22.669 billion by the week ended March 04, 2022 as against $22.875 billion a week ago.

    READ MORE: Rupee falls to all-time low against dollar at Rs178.61

  • State Life Insurance directed to pay claim to widow

    State Life Insurance directed to pay claim to widow

    ISLAMABAD: The President of Pakistan Dr. Arif Alvi has directed State Life Insurance Corporation of Pakistan (SLICP) to pay claim of Rs412,000 to a widow along with interest amount for unnecessary delay, statement said on Sunday.

    Expressing displeasure over an unnecessary delay of seven years in the payment of life insurance claim to a widow, President Dr Arif Alvi directed the SLICP to pay the sum assured of Rs 412,000 as well as add inflation cost/interest to the accrued amount.

    READ MORE: President Alvi orders State Life to pay death insurance

    He further directed SLICP to apologize to the widow and change its financial system attitude and report compliance to Wafaqi Mohtasib within 30 days.

    The President passed these orders while rejecting a representation of SLICP against a decision of the Wafaqi Mohtasib directing it to pay the claimants the assured amount without further delay.

    READ MORE: President Alvi directs bank to refund unfair recovery

    As per the details, the deceased Mr Zahid Altaf Bhatti had obtained two life insurance policies from SLICP (the Agency) on 06.07.2007 and 25.06.2010 for the sum assured of Rs 212,000 and Rs 200,000 respectively. He died on 20.03.2015 and his wife, Mst Fouzia Zahid Bhatti (the complainant), approached the Agency to pay the insurance claim but the latter refused to pay the sum on the ground that the deceased had pre-insurance ailments and was a patient of liver disease/hepatitis C.

    READ MORE: President Alvi rejects FBR plea in maladministration cases

    Feeling aggrieved, Mst Fouzia Zahid Bhatti filed a complaint with Wafaqi Mohtasib who directed SLICP to pay the amount and report compliance within 30 days.

    Instead of implementing the orders of the Wafaqi Mohtasib, SLCIP filed a representation with the President against the decision of the Mohtasib. Rejecting the representation, President Dr Arif Alvi referred to section 80 of the Insurance Ordinance, 2000, which provides that an insurance policy cannot be called in question on the grounds of misrepresentation, false statement or suppression of material facts after two years from the date when the policy was originally effected.

    READ MORE: Dr. Alvi orders action over misconduct with 82-year taxpayer

    In the present case, the policies were issued in 2007 and 2010, whereas the policyholder expired in 2015, thus, the policy could not be called into question. He further noted that the Agency had failed to substantiate its claim and no clinical investigation or diagnostic assessment had been produced to corroborate the existence of pre-insurance ailment.

    The President further observed that the Confidential Report of the Field Officer had also declared the insured as healthy and categorically stated that he knew the deceased for the last 12 years.

    READ MORE: Dr. Alvi rejects banker’s plea in woman harassment case

    The President underlined that ethical principles and compassion should not be ignored in the pursuit of making profits.

    He stated that SLICP came out with frivolous excuses and delayed the payment in an unethical manner. The President advised the Agency to change its financial-system attitude and add inflation cost/interest to the accrued amount so that the beneficiary is not slighted because of pathetic delays.

  • Pakistan’s car sales surge 56% in eight months of FY22

    Pakistan’s car sales surge 56% in eight months of FY22

    KARACHI: Pakistan’s car sales recorded a surge of 56 per cent during first eight months (July – February) 2021/2022, according to data released by Pakistan Auto Manufacturers Association (PAMA).

    The data revealed that 178,250 cars were sold during the first eight months of the current fiscal year as compared with 113,905 units in the corresponding months of the last fiscal year.

    READ MORE: Pakistan’s car sales surge 61% in 7MFY22

    The sales of Pak Suzuki (PSMC) recorded an increase of 69 per cent to 94,408 units during July – February 2021/2022 as compared with 55,852 units in the corresponding period of the last fiscal year.

    Similarly, Indus Motors (INDU) showed sales of 49,499 units during the period under review as compared with 35,975 units in the same period of the last year, showing an increase of 38 per cent.

    READ MORE: Pakistan’s car sales up monthly highest ahead price hike

    Honda Cars and Hyundai have posted growth of 42 per cent and 137 per cent, respectively during the period under review.

    Analysts at Topline Securities attributed the growth in auto sales to macro recovery and single digit interest rates.

    On the other hand the car sales an increase of 32 per cent to 21,664 units when compared with 16,436 units in the same month of the last year, showing an increase of 32 per cent.

    READ MORE: New rates of FED on local, imported motor vehicles

    The increase in MoM sales is led by Pak Suzuki (PSMC) and Hyundai Nishat. PSMC posted strong numbers registering an increase of 40 per cent MoM led by increase in sales of Alto (+86 per cent MoM) and Cultus (+44 per cent MoM).

    The significant jump is due to ease of production issue compared to last month, we believe.

    Hyundai Nishat sold 1,469 units in Feb-22; up significantly 2.4x MoM. Tuscon and Elantra sales were up by 5.7x and 2.9x to 774 units and 312 units respectively amid greater acceptability of the new entrants. 

    Honda Atlas Car (HCAR) and Indus Motors (INDU) posted decline of 32 per cent MoM each during the month of February 2022.

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

    The sales of motorbikes and three-wheeler recorded a decline of three per cent to 1.23 million units during July – February 2021/2022 as compared with 1.27 million units in the corresponding period of the last fiscal year.

    The sales of same segment reported a decline of 12 per cent to 136,527 units in February 2022 when compared with 154,409 units in the same month of the last year.

    The sales of tractors recorded six per cent increase to 33,498 units in first eight months of the current fiscal year as compared with 31,576 units. However, the same recorded a decline of 54 per cent to 2,053 units in February 2022 when compared with 4,476 units in the same month of the last year.

  • IMF should not object to PM relief package: Tarin

    IMF should not object to PM relief package: Tarin

    ISLAMABAD: Pakistan’s Finance Minister Shaukat Tarin on Wednesday said International Monetary Fund (IMF) should not object to the relief package announced by the prime minister as the country is generating own resources for the package besides increasing the revenue.

    The Finance Minister addressing a new conference here said negotiations have been held with the IMF over this relief package announced by the Prime Minister. He said the IMF should not have objections on the package as we are meeting it from our own resources including enhancement in tax revenues. He said this will not increase our fiscal deficit.

    READ MORE: PM Imran reduces, freezes POL prices

    Finance Minister Shaukat Tarin said the government is providing a subsidy of one hundred and four billion rupees on petroleum products in order to provide relief to the people.

    He said given soaring prices of petroleum products in the international market, we have reduced the petroleum levy and brought to zero the sales tax.

    Tarin said that those using seven hundred units of electricity per month will be provided with subsidy of five rupees per unit for the next four months. For this, he said, we will have to give a subsidy of 136 billion rupees.

    Shaukat Tarin said the government has also given industrial relief package to promote industries in the country. He said the package envisages tax holiday for overseas Pakistanis and incentives for the turnaround of sick industries.

    READ MORE: Businessmen hope $5bn investment under PM package

    The Finance Minister said tax exemptions have also been given to the IT sector in order to significantly bolster its exports. He pointed out that the IT sector grew by forty seven percent last year and currently growing by seventy percent. He said we target one hundred percent growth in this sector during the next year. Shaukat Tarin said our trade deficit has also come down.

    Highlights of the press conference:

    Petroleum relief: Prior to Prime Minister’s relief package, govt. was bearing Rs 39 billion fortnightly loss through budgeted PL and Sales tax. At that time, levy on petroleum was Rs17.92 per litre and on Diesel, it was Rs13.30 per litre. With the increase in international prices and Prime Minister’s relief Package, the government will further incur loss of Rs 13.9 billion and fortnightly loss will expand to Rs52 billion. Now petroleum levy and sales tax reduced to zero percent (except for petrol Rs1.8 per Litre)

    The estimated budget loss in the next four months would be Rs250-300 billion just from petroleum relief with the assumption of $100/bbl weighted average international price.

    Electricity relief: Prime Minister announced reduction of Rs. 5 per unit in base rate for four months consecutively. The package will be applicable to all commercial & domestic non-ToU ( non -Time of Use) consumers having monthly consumption up to 700 units, excluding lifeline consumers. Overall relief is estimated at Rs 136 billion.

    Industrial package:

    READ MORE: Tax amnesty launched for setting up new industrial units

    1- Investment in new industrial units and expansion and modernization of existing units. 5 per cent across the board payment of tax for all amount invested Minimum investment threshold is Rs. 50 million.

    Industrial unit to be set-up as a company Commercial production to begin by June 30, 2024. Previous beneficiaries of Amnesty Schemes of 2018 and 2019 will not eligible. Bank loan defaulters in last three years will not be eligible.

    2- Incentive for Revival of Sick Units

    Applicable only to companies. Industrial units facing accumulated losses in continuous 3 years to be treated as sick units.

    Acquiring company allowed to adjust losses of the sick units against its income for consecutive three years.

    Revival of the sick unit to be completed within three years of acquisition. Incentive for Foreign Investment in Industrial Sector.

    3- Incentives for Overseas

    Pakistan citizens who are non-resident for five years and resident Pakistani having declared foreign assets are eligible to invest.

    One-time tax credit equal to 100 per cent of PKR equivalent of remittance to be availed in 5 years. Investment to be made in a new industrial unit. Commercial production to start by 30th June, 2024. New industrial unit to be a company

    IT package:

    READ MORE: PM Imran directs implementing incentives for IT industry

    • Tax exemption for IT/TES (Information Technology Enabled Services) firms & free lancers for 5 years.

    • Reduction in Capital Gain Tax on VC funding into Start ups to zero percent during 5 years.

    • In a historic move, PM has directed to allow IT/ITeS(Information Technology Enabled Services) Companies and Freelancers to retain 100 per cent amount of remittances received through proper banking channels, in FCY Accounts, without any compulsion to convert them into PKR.

    • Furthermore, there will be no restriction on outward remittances from FCY account for PSEB registered IT Companies and Freelancers.

    • Prime Minister has also directed SBP to introduce Financing streams for IT/ITeS sector and Freelancers keeping in view operational architecture and industry needs for these sectors.

    • Recommendations of Pakistan Technology Start-up Fund were also approved by the Prime Minister as part of this historic package for the creation of a Public Private Partnership (PPP) venture capital fund. Ignite National Technology Fund will create this Fund through PPP.

    READ MORE: ECC approves Ramzan relief package worth Rs8.28 bn

    Benefits:

    • Bringing internationally parked Foreign Currency to Pakistan.

    • Encourage foreign companies to shift business to Pakistan.

    • Employment creation and entrepreneurship promotion in the country.

    Trade Deficit:

    US $ mn November December January February Exports 2901 2765 2614 2808 Imports 7899 7666 6891 5903 Trade deficit 4998 4901 4277 3095

    • Significant decline in trade deficit due to significant decline in imports in the month of January & February.

    • Compared to 1HFY22, the current account deficit expected to decline in 2HGFY22. Already visible from trade deficit.

    • The CAD reported by SBP is higher due to some imports not reflected at PBS data due to sensitive nature but recorded by EAD. Importantly, the import differential is funded.

    • It is pertinent to note that trade deficit is lowest since June 2021. This will bring the deficit down significantly.

    Inflation:

    • February CPI is lower at 12.2 per cent as compared with 13 per cent in January.

    • Adjusted with tomatoes prices the February inflation would have been 10.8 per cent YoY basis.

    • Similarly, if we adjust the month on month tomatoes prices, the inflation would have been only 0.6 per cent, on month-on-month basis.

    • It is pertinent to note that prices are flat since November 2021, month-on-month basis. Dec (-0.02 per cent), January (0.4 per cent) and February (0.6 per cent) adjusted with tomatoes prices.

    • Lastly, Core inflation is witnessing a declining trend in February at 7.8 per cent as compared with 8.2 per cent in January.

    • Going forward, it is expected that tomatoes prices will experience decline from mid March due to arrival of crop in Punjab. First week prices of Tomatoes have already declined by 27 per cent.

    Key Takeaways of OICCI Press Conference:

    • 207 Companies have invested $18.5 billion since 2012. They pay one 3rd of our taxes.

    • They believe Pakistan is better than 6 out of 10 regional countries in 2021 verses 3 out of 10 in 2019.

    • In 2021, 68 per cent expect accelerating growth in their businesses in the next 2-3 years vs only 27 per cent in 2019.

    • They want long-term policies to be prepared by the government to help them invest in Pakistan. Moreover, they want further improvement in ease of doing business.

    • Given, the significant improvement in business climate, they want to conduct international road shows to showcase the opportunities in Pakistan.

    ? Sehat Sahulat Program (Beneficiary Satisfaction Based on 3rd Party Feedback Survey)

    Satisfaction rate ( per cent) Total Complaints Total Resolved Total Hospital Visits Total Families Enrolled 97 68,767 67,425 3,247,198 27,694,903

    • 96 per cent beneficiaries are satisfied with the treatment provided by Sehat Sahulat program.

    • 54 per cent beneficiaries are satisfied with the hospital services.

    • 97 per cent beneficiaries are satisfied with the hospital staff behavior.

    • 98 per cent beneficiaries are satisfied with Sehat Sahulat program staff behavior at hospital.

    • 98 per cent beneficiaries were not asked to pay for services during treatment.

  • Past shows PMs survive no-confidence motions

    Past shows PMs survive no-confidence motions

    KARACHI: The no-confidence motions moved by opposition in the past have failed to remove sitting prime ministers, analysts at Arif Habib Limited said on Wednesday.

    “No Prime Minister in the history of Pakistan has been removed via a no-confidence motion,” they said, adding these have been requisitioned twice before; the first time against Prime Minister Benazir Bhutto in 1989 and the second time against Prime Minister Shaukat Aziz in 2006, whereby both managed to overthrow the motion with more votes in favour of retaining the premiership.

    READ MORE: PM Imran reduces, freezes POL prices

    As per Article 54 of the Constitution of Pakistan, the opposition has requisitioned the National Assembly for a no-confidence motion against the Prime Minister, dated March 8th, 2020. This was signed by one fourth of the members of the house, which gives the speaker a maximum of 14 days to summon a session.

    READ MORE: PM Imran directs implementing incentives for IT industry

    Once the session is called and a no-confidence resolution is circulated, a motion will be moved the next day. Voting will then commence after the expiry of three days or before seven days, from the day the motion is moved. Therefore, a session has to be be called by March 22nd, 2022 whereas voting must take place between March 26th and March 30th, 2022.

    READ MORE: PM Imran announces setting up technology startup fund

    Pertinently, voting against the Prime Minister is conducted via an open ballot. The motion is considered successful, that is no confidence of the house in the Prime Minister, if the voting tilts towards a simple majority i.e. 172 of the total 342 members vote in favour of removing the Premier.

    READ MORE: Tax reduced on POL products to ease inflation: PM Imran

    Once the decision comes through and the result against the Prime Minister is submitted by the speaker to the President in writing, he shall cease to hold power, effective immediately, while the cabinet of the PM is also dissolved instantaneously. Moreover, the National Assembly is then required to immediately suggest and a vote upon a new PM.

  • Dollar inches up to make new high at PKR 178.63

    Dollar inches up to make new high at PKR 178.63

    KARACHI: The US dollar hit another high against the Pak Rupee (PKR) on Wednesday after inching up by two paisas in the interbank foreign exchange market.

    The rupee ended Rs178.63 to the dollar from last day’s close of Rs178.61, the previous historic low of the rupee, in the interbank foreign exchange market.

    READ MORE: Rupee falls to all-time low against dollar at Rs178.61

    Currency experts said that the local unit remained under pressure due to import payments to foreign buying related to the holy month of Ramzan and volatile oil prices in the international market.

    They said that inflows in the shape of export receipts and remittances were seen in the market, which prevented significant losses in the rupee value.

    READ MORE: Rupee ends near record low against dollar

    The experts said that overseas Pakistanis usually send money to their loved ones for expenses related to holy month of Ramzan and Eid festival.

    The high oil prices in the international market due to Russia-Ukraine war kept the rupee value under pressure as further spike in the prices would make the local currency to maintain levels.

    READ MORE: PKR gains 33 paisas to dollar after 3-day depreciation

    The import bill of petroleum group recorded an increase of 107 per cent to $11.7 billion during first seven months of the current fiscal year as compared with $5.64 billion in the corresponding months of the last fiscal year.

    The country’s Current Account Deficit (CAD) surged to its highest ever monthly deficit of $2.6 billion in January 2022 ($1.9 billion in December 2021) taking CAD of $11.6 billion during the first seven months of the current fiscal year.

    READ MORE: Dollar up 21 paisas to PKR amid surge in global oil prices

  • Tax collection from property purchase climbs up 24%

    Tax collection from property purchase climbs up 24%

    ISLAMABAD: The collection of advance tax from purchase of immovable properties climbed up by 24 per cent during first half of the current fiscal year.

    According to official data released by Federal Board of Revenue (FBR), the collection of advance tax on purchase / transfer of immovable property increased to Rs27.7 billion during first half (July – December) of fiscal year 2021/2022 as compared with Rs22.36 billion in the corresponding half of the last fiscal year.

    READ MORE: FBR registration made mandatory for housing projects

    The FBR collects advance income tax on purchase or transfer of immovable property under Section 236K of the Income Tax Ordinance, 2001. Under this Section any person responsible for registering, recording or attesting transfer of any immovable property shall at the time of registering, recording or attesting the transfer shall collect advance tax from purchaser or transferee at the rate of one per cent of the fair market value.

    READ MORE: Advance tax on purchase of immovable property

    The collection of withholding tax from income from property also recorded an increase of 12 per cent during the first half of the current fiscal year.

    The FBR collected withholding tax amounting Rs14.90 billion on income from property during first half (July – December) of 2021/2022 as compared with Rs13.32 billion in the corresponding half of the last fiscal year.

    The authorities collect withholding tax on income from property under Section 155 of the Income Tax Ordinance, 2001.

    READ MORE: Income tax on rental immoveable property

  • SBP decides to keep policy rate unchanged at 9.75%

    SBP decides to keep policy rate unchanged at 9.75%

    KARACHI: The State Bank of Pakistan (SBP) on Tuesday decided to keep policy rate unchanged at 9.75 per cent for the next two months.

    The State Bank said that the decision reflected the outlook for inflation has improved following the cuts in fuel prices and electricity tariffs announced last week as part of the government’s relief package.

    At the same time, high-frequency indicators suggest that growth continues to moderate to a more sustainable pace.

    This moderation should help keep at bay demand-side pressures on inflation and contain non-oil imports, notwithstanding the significant uncertainty about the future path of global energy and food prices due to the Russia-Ukraine conflict.

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

    Since the last Monetary Policy Committee (MPC) meeting on January 24, 2022, headline inflation moderated in February to 12.2 percent (y/y). Inflation in February would have been noticeably lower were it not for abnormal increases in a few perishable items.

    Accordingly, core inflation also fell in urban areas and inflation expectations have remained stable, suggesting that second-round effects from higher commodity prices remain contained.

    On the external front, despite the rise in global prices, the February trade deficit witnessed a further 10 percent contraction (m/m) on top of the 29 percent decline recorded in January, confirming the slowdown in domestic demand. While the current account deficit rose in January, this largely reflected lumpy imports of oil, vaccines and other items financed through loans and supplier credit. Excluding these imports, the deficit would have been about $1 billion lower, suggesting that the underlying trend in the current account balance is also moderating.

    READ MORE: SBP increases policy rate by 150 basis points to 8.75%

    Looking ahead, the MPC noted that while current real interest rates on a forward-looking basis are appropriate to guide inflation to the medium-term range of 5-7 percent, support growth, and maintain external stability, the Russia-Ukraine conflict has introduced a high degree of uncertainty in the outlook for international commodity prices and global financial conditions.

    Continued adverse conditions on these fronts could pose challenges to the outlook for the current account deficit and inflation expectations, which could necessitate changes in the policy rate. Since the Russia-Ukraine situation remains fluid, the MPC noted that it was prepared to meet earlier than the next scheduled MPC meeting in late April, if necessary, to take any needed timely and calibrated action to safeguard external and price stability.

    In reaching its decision, the MPC considered key trends and prospects in the real, external and fiscal sectors, and the resulting outlook for monetary conditions and inflation.

    In January, there was a sharp and broad-based decline in imports, including energy imports, to $6.1 billion from $7.6 billion in December based on PBS data.

    READ MORE: SBP not to hold regular monetary policy committee meeting

    Imports declined further in February while exports rose, resulting in a 38 percent contraction in the trade deficit compared to its peak last November. Around three-fourths of the rise in imports this year is estimated to stem from higher prices, with the contribution from volume growth negative in January.

    These trends suggest that demand-led pressures on the current account are declining. While the current account deficit rose to $2.6 billion, this included a sizeable contribution from imports financed through loans and supplier credit, including oil and vaccines, the SBP said.

    At around 2 percent of GDP, the fiscal deficit during the first half of FY22 was almost the same as last year. FBR tax collections grew strongly by 30 percent (y/y) during Jul-Feb FY22, in part due to a depreciated exchange rate and higher imports than last year as well as strengthened tax collection efforts. This offsets declines in non-tax revenues due to lower petroleum development levy revenues and increased spending, including on subsidies, grants and provincial PSDP.

    The SBP said that headline inflation fell from 13 percent (y/y) in January to 12.2 percent in February, driven by a slowdown in energy price inflation. The contribution to inflation from food prices rose, reflecting higher prices for tomatoes, fresh vegetables, chicken, and vegetable ghee.

    READ MORE: SBP issues annual schedule for monetary policy

    Meanwhile, core inflation ticked down in urban areas and up in rural areas, while inflation expectations of both consumers and businesses remained broadly unchanged.

    The MPC continues to expect inflation to average between 9-11 percent this fiscal year before declining toward the medium-term target range of 5-7 percent in FY23 as global commodity prices normalize. This baseline outlook is subject to risks from the path of global prices, domestic wage developments, and the fiscal policy stance. The MPC will continue to carefully monitor developments affecting medium-term prospects for inflation, financial stability, and growth.

  • Rupee falls to all-time low against dollar at Rs178.61

    Rupee falls to all-time low against dollar at Rs178.61

    KARACHI: The Pakistan Rupee (PKR) fell to an all-time low at Rs178.61 against the dollar on Tuesday amid significant rise in international oil prices and Ramzan related demand for imported goods.

    The rupee previously recorded the all-time low at Rs178.24 to the dollar on December 29, 2021.

    READ MORE: Rupee ends near record low against dollar

    The rupee ended Rs178.61 to the dollar from previous day’s closing of Rs178.13 in the interbank foreign exchange market.

    The local currency recorded a decline of Rs21.07 or 13.37 per cent from Rs157.54 on June 30, 2021 to the present level of Rs178.61.

    READ MORE: PKR gains 33 paisas to dollar after 3-day depreciation

    Currency experts said that Ramzan related commodity buying escalated the dollar demand. Besides rising oil prices in the international market also depreciated the rupee value.

    The import bill of petroleum group recorded an increase of 107 per cent to $11.7 billion during first seven months of the current fiscal year as compared with $5.64 billion in the corresponding months of the last fiscal year.

    READ MORE: Dollar up 21 paisas to PKR amid surge in global oil prices

    The dealers said that the rise in import bill will also widen the current account deficit.

    The country’s Current Account Deficit (CAD) surged to its highest ever monthly deficit of $2.6 billion in January 2022 ($1.9 billion in December 2021) taking CAD of $11.6 billion during the first seven months of the current fiscal year.

    READ MORE: Dollar surges 21 paisas to PKR on high oil price concerns

  • ECC approves Ramzan relief package worth Rs8.28 bn

    ECC approves Ramzan relief package worth Rs8.28 bn

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Monday approved a Relief Package worth Rs8.28 billion to provide essential items at subsidized rates during the holy month of Ramzan.

    The ECC approved a summary tabled by Ministry of Industries and Production for Ramzan Relief Package 2022.

    The ECC after discussion approved Ramzan Relief Package 2022 for 19 essential items to be sold at subsidized rates at Utility Stores Corporation (USC) with total subsidy of Rs. 8.28 billion.

    READ MORE: PM Imran reduces, freezes POL prices

    Federal Minister for Finance and Revenue Shaukat Tarin presided over the ECC meeting.

    Federal Minister for National Food Security and Research Syed Fakhar Imam, Federal Minister for Railways Muhammad Azam Khan Swati, Federal Minister for Energy Hammad Azhar, Federal Secretaries and senior officers attended the meeting.

    ECC approved Kamyab Overseas Programme (KOP) as a new component of Kamyab Pakistan Programme. The new initiative is meant for prospective low income overseas workers having confirmed foreign job offer, employment agreement and valid travel documents and registered with NSER to avail interest free loans under KPP.

    READ MORE: PM Imran announces setting up technology startup fund

    Maximum amount of loan would be Rs. 300,000 and returned in easy installments starting after three months of departure. The loan will be provided to 10,180 beneficiaries with estimated required funds of Rs. 3 billion for the 4th quarter of 2021-2022.

    ECC considered and approved a summary presented by Ministry of Commerce on proposed amendments in the import and export policy order 2020 for the development of Integrated Tariff Management System (ITMS) for Pakistan Single Window (PSW).

    Ministry of Energy (Petroleum Division) submitted a summary for allocation of Gas from Togh Field on commercial basis.

    The ECC after discussion allowed up to 16 MMCFD gas from Togh Field to SNGPL on commercial basis. The wellhead price of the gas will be decided by the concerned regulator under the applicable rules and policy. Ministry of Energy (Petroleum Division) submitted a summary to allow amending the Petroleum Concession Agreement, allowing GHPL Assignment of Working interest in Wali, Jandaran West, Saruna and Pesu block of OGDCL.

    The ECC approved to amend the respective Petroleum Concession Agreements by allowing GHPL to increase its Working Interest above its statutory Working Interest of 2.5 per cent being state participator in Wali, Jandran West,Saruna and Pesu blocks of OGDCL.

    Ministry of Energy (Power Division) submitted a summary on incentive package announced by the Prime Minister regarding reduction in price of electricity.

    The ECC considered and approved PM’s relief package of Rs. 5 per unit by way of reduction in electricity charges base rate for the relief period of four months (March 2022 to June 2022).

    The relief package will be applicable to all commercial and domestic non- ToU consumers having monthly consumption up to 700 units, excluding life-line consumers.

    The cash flow requirement for the PM Relief Package is Rs. 136 billion. Ministry of Energy (Petroleum Division) submitted another summary on reimbursement of price differential claims of oil marketing companies (OMCs) and refineries, in line with PM relief package of reduction in the consumer prices of Motor Spirit and Diesel by Rs. 10 per litre. The price differential would be paid to the Oil Marketing Companies/ Refineries by the Government as a subsidy to avert any shortage in the market.

    The ECC approved special PDC disbursement mechanism to pay the PDC speedily within 15 days, opening of special assignment account with PSO and initial amount of Rs20 billion to PSO in accordance with the mechanism.

    The ECC also considered and approved following Technical Supplementary/ Supplementary Grants:

    i. Rs. 428.90 million to Foreign Affairs Division to meet the expenditure for holding of 48th session of the OIC Council of Foreign Ministers to be held in Islamabad on 22-23 March, 2022.

    ii. Rs. 47.561 million to poverty Alleviation and Social Safety Division.

    iii. Rs. 135.078 billion for principal and interest payments against Naya Pakistan Certificates and Islamic Naya Pakistan Certificates.