Business leaders have raised serious concerns over the continuous intervention of the International Monetary Fund (IMF), warning that its influence is exacerbating Pakistan’s economic struggles.
(more…)Category: Top stories
Find top stories in this section. Pakistan Revenue brings you the latest and most important news from Pakistan and around the world, keeping you informed with key updates and insights.
-
Dr. Alvi rejects banker’s plea in woman harassment case
ISLAMABAD: The President of Pakistan, Dr. Arif Alvi, has rejected a petition filed by a banker for reinstatement into service, who was sacked for harassing a woman.
The petitioner filed the appeal before the president against the decision of the Federal Ombudsman for Protection against Harassment of Women at Workplace which had modified the punishment of “dismissal from service” into “removal from service”.
READ MORE: President Alvi rejects MCB Bank’s appeal in fraud case
The President upheld the orders of the ombudsman noting that the petitioner was awarded the penalty of dismissal from service after inquiry wherein allegations of harassment stood established against him and the petitioner had failed to point out any illegality with the order of the learned ombudsman.
According to the background of the case, Naeem Iqbal was appointed as Bank Cashier Grade-1 at Bank Alfalah Ltd, on February 01, 2006, and he was later promoted to Operation Officer, Counter Services Manager and Branch Operation Manager in 2010, 2014 and 2016 respectively.
READ MORE: President Alvi orders two banks to pay victims of fraud
Ms Habiba Rauf had filed a complaint before the management of the bank alleging acts of harassment against the accused.
After inquiry, Iqbal was found guilty and, consequently, dismissed from the service by Bank Alfalah Ltd.
After making a representation before the competent authority, he filed an appeal before the Woman Ombudsman who ordered that the appeal of the accused deserves outright dismissal, yet, on considering his long service and the fact that he has a large family, consisting of small kids and aged parents, leniency in punishment looks more appropriate and nearer to justice and fair play.
READ MORE: President Alvi orders State Life to pay death insurance
The ombudsman, therefore, modified the punishment of “dismissal from service” into “removal from service” and disposed of his appeal.
Subsequently, Naeem Iqbal filed a representation with the President for reinstatement into service. While disposing of his appeal, the President noted that the petitioner was seeking setting aside of the order of the bank, dated March 18, 2019, and reinstatement into service purely on humanitarian grounds.
The learned Ombudsman had already converted the penalty of dismissal to removal from service on such grounds.
The President observed that since the petitioner had failed to point out any illegality with the order and no justification existed to interfere with the order of the Ombudsman, therefore, the instant representation is dismissed.
READ MORE: Dr. Alvi opens property exhibition for UAE based NRPs
-
Dollar hits record high of Rs178.04 at interbank closing
KARACHI: The US dollar breached the level of Rs178 on Friday due to mounting demand for the foreign currency for import payments.
The Pak Rupee (PKR) ended at Rs178.04 to the dollar from the previous day’s closing of Rs177.98 in the interbank foreign exchange market.
Currency experts said that dollar demand for import and corporate payments remained high during the day. They said that dollar demand for import and corporate payments remained high due to the closing of the year.
READ MORE: Dollar maintains record high level at Rs177.98
They said that the measures taken by the State Bank through tightening of monetary policy has failed to support the rupee.
The State Bank of Pakistan (SBP) on December 14, 2021 announced a monetary statement and increased the key policy rate by 100 basis points to 9.75 per cent. The SBP increased the policy rate by 250 basis points in less than a month to support the local currency by reducing the demand.
READ MORE: Rupee falls to new record low despite policy rate hike
The dealers said that there was no letup in import payment. The import bill of the country surged by 69.17 per cent to $33 billion during the first five months (July – November) 2021/2022 as compared with $19.47 billion in the corresponding months of the last fiscal year.
-
FBR notifies increase in sales tax on petrol, HSD
The Federal Board of Revenue (FBR) has announced an increase in sales tax on the supply of petrol and high-speed diesel (HSD), as outlined in the recently issued SRO 1640(I)/2021.
(more…) -
Dollar maintains record high level at Rs177.98
KARACHI: The US dollar on Thursday maintained the record high level of Rs177.98 at closing of interbank foreign exchange market.
The Pak Rupee ended unchanged against the dollar at previous day’s closing of Rs177.98, which was the lowest level of the rupee.
READ MORE: Rupee falls to new record low despite policy rate hike
Currency experts said that the market witnessed high dollar demand for import and corporate payments. However, sufficient inflows of the dollar helped the rupee to keep value at previous day’s level.
The State Bank of Pakistan (SBP) on December 14, 2021 announced another 100 basis points increase in the key policy rate to 9.75 per cent. It was the third straight increase in the policy rate by the central bank since September 2021. However, the free-fall in rupee continued due to higher dollar demand for import payments.
READ MORE: Dollar eases against PKR on expected policy rate rise
According to the official data of Pakistan Bureau of Statistics (PBS), the import bill of the country surged by 69.17 per cent to $33 billion during the first five months (July – November) 2021/2022 as compared with $19.47 billion in the corresponding months of the last fiscal year.
-
Petrol price reduces to Rs140.82 per liter
ISLAMABAD: The government on Wednesday decided to reduce the prices of petroleum products for next fortnight considering the fall in international oil prices.
The government has not passed on the all the benefit of fall in international oil prices as it enhanced sales tax rates. However, the government kept the petroleum levy unchanged. The prices are applicable from December 16, 2021.
Price on petrol cut by Rs 5 to Rs 140.82/ltr
Price on diesel cut by Rs 5 to Rs 137.62/ltr
Petroleum levy on petrol and diesel remained unchanged at Rs 13.62 and Rs 13.14.
Sales tax on petrol raised from 1.63 per cent to 4.77 per cent. Ssles tax on diesel raises from 7.37 per cent to 9.08 per cent
-
Rupee falls to new record low despite policy rate hike
KARACHI: The Pak Rupee recorded a new low of Rs177.98 to the dollar on Wednesday despite the hike in key policy rate by 100 basis points announced a day earlier.
The rupee lost 10 paisas to the dollar from the previous day’s closing of Rs177.88 in the interbank foreign exchange market.
The previous historic low in rupee value was recorded at Rs177.89 on December 13, 2021.
A day earlier the State Bank of Pakistan (SBP) announced an increase of 100 basis points in the key policy rate to 9.75 per cent.
Currency experts said that the rupee was under immense pressure due to high dollar demand for import and corporate payments.
According to the official data of Pakistan Bureau of Statistics (PBS), the import bill of the country surged by 69.17 per cent to $33 billion during the first five months (July – November) 2021/2022 as compared with $19.47 billion in the corresponding months of the last fiscal year.
-
Old currency notes can be exchanged till December 2022
ISLAMABAD: The federal cabinet chaired by Prime Minister Imran Khan on Tuesday approved the extension in exchanging old Pakistani currency notes.
The cabinet approved the extension of the period for the exchange of old Pakistani 10, 50, 100, and 1000 currency notes till 31st December 2022.
At the meeting, Special Assistant to the Prime Minister Dr. Faisal Sultan gave a briefing on the preventive measures regarding the new type of Corona variant, Omicron.
The cabinet emphasized the need to increase vaccinations, maintain social distance, and wearing masks.
It was informed that at present 20 million people in Pakistan have not been vaccinated with the second dose of Corona Vaccine.
READ MORE: Cabinet renews aviation licenses of four airlines
The cabinet appealed to all such citizens to take the second dose as soon as possible to prevent the spread of COVID.
The meeting was also informed that Immunity increases 17-folds after the second dose of the vaccine.
The Prime Minister directed the Federal Ministers Asad Umar and Ms. Zubeida Jalal to visit Gwadar as soon as possible so that recommendations could be formulated for quick resolution of the problems of the people of Gwadar.
The meeting was briefed regarding the introduction of electronic voting machines and voting rights for overseas Pakistanis. The Cabinet welcomed the ECP’s decision to use an electronic voting machine in the local body elections in Islamabad. The Cabinet was given a detailed briefing on the schedule regarding delivery and use of electronic voting machines at all polling stations in the country and training of staff.
READ MORE: Pakistan abolishes visa fee for Afghans
The Cabinet expressed its firm resolve to hold the next elections through electronic voting machines after the implementation of laws regarding electronic voting machines and voting rights for overseas Pakistanis.
Advisor Finance presented a comparative review of the prices of essential commodities to the Federal Cabinet. The weekly inflation rate has come down by 0.07 per cent. Prices of Sugar, flour and household items have decreased. Collectively, prices of 09 items decreased. Prices of 23 items remained stable. The Cabinet was informed that apart from the prices of Banaspati Ghee and tea leaves in the region, prices of all other essential items are lower in Pakistan.
These items include flour, grams, dal mash, dal mung, tomato, onion, chicken, and petrol. Concerns were raised over higher prices of essential commodities in Sindh including flour, sugar, milk, ghee, and pulses.
The Cabinet approved the amendment in the bilateral air route between Pakistan and Tajikistan. This decision will reduce both air distance and travel costs.
The Cabinet allowed Kazakh Air Company (SCAT) to operate in Pakistan to start air travel between Pakistan and Kazakhstan. The decision will enable direct air travel between Pakistan and Kazakhstan and help boost bilateral trade.
READ MORE: Pandora papers: PM says returning taxpayers’ money
To promote trade between Pakistan and Central Asian countries, the Cabinet directed the Aviation Division to start work on finalizing air travel agreements with all Central Asian countries.
The Cabinet approved an amendment to the air travel agreement between Pakistan and Iraq. This decision will increase the number of commercial flights between Pakistan and Iraq.
The Cabinet was informed that there is no shortage of urea in the country at present. However, to ensure the supply of urea fertilizer for the Rabi crop in the country, the following approvals were given.
Sui Northern Gas Company will supply gas to urea plants by January 2022. Gas supply to Pak Arab and Fatima Fertilizer Plants will be ensured. The process of importing additional 50,000 tons of urea should be completed expeditiously. The cabinet was also informed that the price of urea per sack in Pakistan is about Rs. 1864 while in other countries it is being sold at Rs. 10,000 per sack.
The present government has taken huge and significant steps for the development of agriculture in the country and the welfare of farmers.
READ MORE: Prime Minister issues directives for reducing burden of indirect taxes
The Cabinet was given a detailed briefing on sugar production and sugar prices in the country. The Cabinet expressed satisfaction over the current stock and price of sugar. The Prime Minister directed that the strategic reserves of sugar be maintained so that prices remain stable. The Cabinet also approved the issuance of the recommendations of the report of the Special Committee on Sugar Sector Reforms for public opinion.
On the basis of humanitarian grounds, the process of obtaining Pakistani visas for Afghans has been further eased. After this decision, the security clearance required for obtaining a visa has been reduced from 30 days to 15 days.
It was also decided to further facilitate the registration process of international NGOs working for the welfare and assistance of the Afghan people.
This decision has been made on humanitarian grounds and to aid the people of Afghanistan.
The facility for Afghans immigrating to other countries through Pakistan has been extended for another 60 days. This facility includes travel by land and air routes.
It was also decided to make the process of obtaining a Pakistani visa easier for the officials of international NGOs working for the welfare of the Afghan people.
READ MORE: Authorities seal 192 illegal pumps selling smuggled petroleum products
This decision has been made on humanitarian grounds and for helping the people of Afghanistan. OGRA’s annual report for the year 2019-20 was presented to the Cabinet.
The report comprises recommendations regarding the performance of Pakistan’s petroleum industry, production, supply and demand, and improvement of the petroleum industry.
The Cabinet was informed that at present there is a 27-days stock of petrol and diesel. About 75 Exploration licenses generated revenue of Rs. 29 billion. Safety standards for LPG cylinders are being improved and a public awareness campaign is underway. 10 licenses were issued to LPG companies. An audit is being carried out to prevent gas theft. Action is being taken against those selling petrol at illegal petrol pumps and in plastic containers.
The Cabinet endorsed the decisions taken at the meeting of the Committee on Institutional Reforms held on November 24, 2021.
CCIR Decisions – Merger of National Research Institute for Fertility Care Karachi with National Institute of Population Studies, Islamabad.
The Cabinet ratified the decisions taken in the meeting of the Committee on Energy held on 02 December 2021.
CCOE Decision – Tariff Protection (Deemed Duty) for Refineries – Report by Implementation Committee for renegotiation with IPPs under 2002 Power Policy (Rs. 134 billion paid to IPPs) The Cabinet ratified the decisions taken at the meeting of the Economic Coordination Committee (ECC) held on December 10, 2021.
ECC decisions
Small and Medium Enterprises (SMEs) Policy 2021-25
Commercial Gas allocation from M/S United Energy Pakistan’s Fields.
The mechanism for Granting Concessionary Tariff to the eligible Consumers of Zero-Rated Industrial Consumers of Lahore and Sundar Industrial Estate and for prospective Industrial Estates.
Cabinet approved giving the additional charge of CEO, Central Power Purchasing Agency to Chief Financial Officer, CPPA.
Cabinet approved NDMA’s assistance to Afghanistan on humanitarian grounds. The government of Pakistan has already provided 200,000 tons of wheat under the World Food Program and has provided an additional 50,000 tons of wheat as aid to the Afghan people.
-
Key policy rate goes up to 9.75%; SBP raises 250bps in less than month
KARACHI: The State Bank of Pakistan (SBP) on Tuesday increased the key policy rate by 100 basis points to 9.75 per cent. The decision was as per expectations of the market.
This is the second increase in policy rate in less than a month. The SBP on November increased the policy rate by 150 basis points to 8.75 per cent. Cumulatively, the central bank enhanced the policy rate by 250 basis points in less than a month.
READ MORE: SBP increases policy rate by 150 basis points to 8.75%
The SBP issued the statement that the Monetary Policy Committee (MPC) decided to raise the policy rate by 100 basis points to 9.75 percent.
“The goal of this decision is to counter inflationary pressures and ensure that growth remains sustainable,” the SBP said.
Since the last meeting on November 19, 2021, indicators of activity have remained robust while inflation and the trade deficit have risen further due to both high global prices and domestic economic growth.
In November, headline inflation increased to 11.5 percent (y/y). Core inflation in urban and rural areas also rose to 7.6 and 8.2 percent, respectively, reflecting domestic demand growth. On the external side, despite record exports, high global commodity prices contributed to a significant increase in the import bill.
As a result, the November trade deficit rose to $5 billion based on PBS data.
The MPC noted that recent data releases confirm that the emphasis of monetary policy on moderating inflation and the current account deficit remains appropriate.
Following today’s rate increase and given the current outlook for the economy, and in particular for inflation and the current account, the MPC felt that the end goal of mildly positive real interest rates on a forward-looking basis was now close to being achieved.
Looking ahead, the MPC expects monetary policy settings to remain broadly unchanged in the near-term.
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.
High-frequency indicators of domestic demand released since the last meeting, including electricity generation, cement dispatches, and sales of fast-moving consumer goods and petroleum products, and continued strength in imports and tax revenues suggest that economic growth remains robust. The outlook for agriculture continues to be strong, supported by better seed availability and an expected increase in the area under wheat cultivation.
Meanwhile, robust growth in sales tax on services also suggests that the tertiary sector is recovering well. While some activity indicators are moderating on a sequential basis, partly as a result of recent policy actions to restrain domestic demand, growth this fiscal year is expected to be close to the upper end of the forecast range of 4-5 percent.
This projection factors in the expected impact of today’s interest rate decision. The emergence of the new Coronavirus variant, Omicron, poses some concerns, but at this stage there is limited information about its severity.
The MPC noted that Pakistan had successfully coped with multiple waves of the virus, which supported a positive outlook for the economy.
READ MORE: SBP not to hold regular monetary policy committee meeting
Despite strong exports and remittances, the current account deficit has increased sharply this year due to a rise in imports, and recent outturns have been higher than earlier expected. Based on PBS data, imports rose to $32.9 billion during July-November FY22, compared to $19.5 billion during the same period last year.
Around 70 percent of this increase in imports stems from the sharp rise in global commodity prices, while the rest is attributable to stronger domestic demand. Due to the higher recent outturns, the current account deficit is projected at around 4 percent of GDP, somewhat higher than earlier projected.
While in the near term monthly current account and trade deficit figures are likely to remain high, they are expected to gradually moderate in the second half of FY22 as global prices normalize with the easing of supply disruptions and tightening of monetary policy by major central banks. In addition, recent policy actions to moderate domestic demand―including policy rate hikes and curbs on consumer finance―and proposed fiscal measures, should help moderate growth in import volumes through the rest of the year.
In this context, the MPC emphasized that the monetary policy response to arrest the deterioration in the current account deficit has been timely.
Together with the natural moderating influence of the flexible and market-determined exchange rate, the MPC felt that this response would help achieve the goal of a sustainable current account deficit this fiscal year. Moreover, the MPC noted that the current account deficit is expected to be fully financed from external inflows.
READ MORE: SBP issues annual schedule for monetary policy
As a result, foreign exchange reserves should remain at adequate levels through the rest of the fiscal year and resume their growth trajectory as global commodity prices ease and import demand moderates.
During July-November FY22, fiscal revenue growth has been strong, driven by a broad-based and above-target increase in FBR tax collections (36.5 percent (y/y)).
However, lower petroleum development levy (PDL) collection led to a decline in non-tax revenues (22.6 percent (y/y) in Q1 FY22). On the expenditure side, development spending and subsidies and grants have increased significantly during this period.
The government intends to introduce legislation to increase revenues through elimination of certain tax exemptions and reduce current and development expenditures. These measures would help moderate domestic demand, improve the current account outlook, and complement recent monetary policy actions.
READ MORE: SBP decides early announcement of monetary policy
Since the last meeting, despite a moderation in consumer loans, overall credit growth has remained supportive of growth. Meanwhile, across all tenors, secondary market yields, benchmark rates and cut-off rates in the government’s auctions have risen significantly. The MPC noted that this increase appeared unwarranted.
The momentum in inflation has continued since the last MPC meeting, as reflected in a significant increase in both headline and core inflation in November. Due to recent higher than expected outturns, SBP expects inflation to average 9 – 11 percent this fiscal year.
The pick-up in inflation has been broad-based, with electricity charges, motor fuel, house rent, milk and vegetable ghee among the largest contributors.
READ MORE: SBP issues clarification on monetary policy decision
On a sequential basis, inflation rose 3 percent (m/m) in November. Looking ahead, based on this momentum and the expected path of energy tariffs, inflation is likely to remain within the revised forecast range for the remainder of the fiscal year.
Subsequently, as global commodity prices retrench, administered price increases dissipate, and the impact of demand-moderating policies materializes, inflation is expected to decline toward the medium-term target range of 5-7 percent during FY23. The MPC will continue to carefully monitor developments affecting medium-term prospects for inflation, financial stability and growth.
-
FBR to distribute prizes worth Rs53 million every month
ISLAMABAD: The Federal Board of Revenue (FBR) will distribute prizes worth Rs53 million every month. The first lucky draw will be held on January 15, 2022. The FBR will distribute the prizes to 1,007 winners.
The said prize scheme was introduced through Finance Act-2021 which was followed by issuance of rules for the prize scheme on 9th August, 2021 by FBR.
The computerized balloting for the prize scheme will be held on 15th of every month, the first one on January 15, 2022 at FBR (HQs), Islamabad. Initially, the denomination of prizes has been set as Rs. 10,00,000 (1st Prize), Two prizes of Rs. 500,000, four prizes of Rs. 250,000 and one thousand prizes of Rs. 50,000 each.
This lucrative Prize Scheme of FBR aims to maximize transparency and plug revenue leakage through real time monitoring of sales.
It also aims to ensure that tax collected from customers at the point of sale is deposited in state exchequer. This will not only force the Tier-1 retailers to expedite the integration of their retail outlets with FBR POS System but will also encourage the customers to prefer shopping from the POS-integrated retail outlets.
FBR is expecting a substantial increase in revenue through this innovative initiative as it will reduce tax evasion and minimize concealment of sales by the retailers.
Customers can participate by verifying the receipt of purchases through Tax Asaan Mobile App of FBR or by sending the invoice number through an SMS on 9966. FBR has launched a very aggressive print and electronic media campaign for the awareness of people across the country.
The FBR also rebutted disinformation being spread on the social media against the proposed Service Charge of Rs.1 to be collected on all invoices issued by Tier-1 Retailers integrated with FBR’s electronic system of real-time reporting of sales.
It is being insinuated as if the rate of the Service Charge is 1 percent instead of Rupee 1 per invoice only. This baseless propaganda by some vested interests is thoroughly malicious in intent and definitely suspicious in content.
The nominal Service Charge at Re.1 per invoice of whatever denomination, would be collected under Section 76 of the Sales Tax Act, 1990. This petty amount will be utilized to ensure integration of all Tier-1 Retailers, promote ongoing publicity campaign, and finance a prize scheme for all customers who duly verify their invoices to determine the validity and genuineness of the invoices issued by the integrated Tier-1 Retailers, FBR further clarified.
Hence, the above unfounded campaign appears to have been initiated by those vested interests who tend to oppose POS integration. They continue to collect Sales Tax from the general public but are always reluctant to deposit the same in the Government Treasury.
FBR has reaffirmed its unflinching resolve to continue integrating Tier-1 Retailers across the country with full vigor and an indomitable spirit.