Finance ministry spokesman Muzammil Aslam, in a statement, said that there was not truth in news about the deadlock, adding that the talks would resume from Monday (tomorrow) and would continue uninterrupted as per schedule.
Aslam said the date for ending talks was not fixed and the negotiation would continue till success of the talks.
He said Minister for Finance Shaukat Tarin and Governor State Bank of Pakistan Reza Baqir were attending meetings in New York while the Secretary Finance and his team were engaged for talks in Washington DC as per schedule.
Federal Minister for Economic Affairs Division Omar Ayub Khan, Secretary Commerce, Secretary M/o Information Technology, Secretary Finance Division, Governor State Bank of Pakistan Dr. Reza Baqir, Executive Director General BOI, and other senior officers participated in the meeting.
Adviser for Commerce Abdul Razak Dawood participated through a video link.
Secretary Commerce briefed the participants about the trade balance situation over the last two months.
Considering the expansion in economic activity, the import of one-time items like vaccines for COVID-19 as well as increased demand for raw materials has resulted in increasing imports during July and August 2021.
In his remarks, the Finance Minister stated that the economy is in a state of growth. As the economy registered a growth rate of 4 per cent during FY2021, there is an increased demand for imports.
As long as the trade deficit is within a sustainable level, it will stimulate economic recovery, he added.
The Finance Minister stressed upon the Ministry of Commerce to conduct sensitivity analysis and build scenarios for effective forecasting both in imports as well as exports for each month of the year.
In his concluding remarks, the Finance Minister said that the prudent policies adopted by the present government have stimulated economic recovery amid the COVID-19 pandemic. The economy is heading in the right direction.
The enhanced revenue collection along with improved ratings (Business Confidence Index and by international credit rating agencies) indicates that the economy has gained momentum and is geared towards inclusive and sustainable economic growth.
ISLAMABAD: The ministry of finance on Thursday said that Pakistan’s debt-to-GDP ratio has increased by 1.7 per cent during the pandemic as against an increase in global average of 13 per cent.
Responding to some media reports regarding the increase in public debt during the last three years, the statement said that a better way to measure the level of debt was through the Debt-to-GDP ratio instead of looking at the absolute values of debt.
“Global Debt-to-GDP ratio increased by 13 percentage points, whereas, Pakistan’s Debt-to-GDP ratio witnessed a minimal increase of 1.7 percentage points in 2019-20,” it said adding that the country’s Debt-to-GDP ratio in fact reduced by 4 percentage points indicating lower debt burden at end June 2021 as compared with last fiscal year.
The ministry said that the increase in debt during the last three years occurred mainly during the Fiscal year 2018-19 due to implementing difficult and unavoidable policy choices.
Had the market-based exchange rate, a sustainable level of Current Account Deficit, adequate cash buffers and long-term domestic borrowing profile been maintained, the debt burden would have been reduced further on the back of fiscal consolidation efforts supported by aggressive control on expenses and growth in tax and non-tax revenues.
As most of the major adjustments to fiscal and monetary policies have been made, the debt burden is projected to decline firmly over the next few years.
The statement while referring to media reports said that these reports ignored the underlying reasons behind such increase adding that in order to fully understand the underlying economic realities, there was a need to analyze the sources of increase in total public debt during last three years. The underlining reasons are:
Interest Expenses: Preference towards short-term domestic borrowing in absence of adequate cash buffers resulted in short-term profile of domestic debt at the end of FY2018.
This short-term profile led to high-interest cost on debt as interest rates had to be increased significantly to curb rising inflationary pressures. The government paid Rs 7.5 trillion against interest servicing which explained 50 percent of the increase in total public debt.
Currency Devaluation Impact: The exchange value of the Rupee was maintained at an artificially high level in the past which triggered the balance of payment crisis.
Transition to a market-based exchange rate regime, being an unavoidable policy choice, resulted in sharp exchange rate depreciation leading to high inflation, high interest rates, slower GDP growth, and lower import-related tax revenues.
This exchange rate depreciation added around Rs 2.9 trillion (20 percent of the increase) in public debt. It is important to highlight here that this increase was not due to borrowing but due to the re-valuation of external debt in terms of rupees after currency devaluation.
Financing of Primary Deficit: The impact of economic slowdown due to the Covid-19 pandemic mainly resulted in higher than estimated primary deficits. Rs 3.5 trillion (23 percent of the increase) was borrowed for the financing of the primary deficit.
Cash Management & Others: Rs 1.0 trillion (7 percent of the increase) was on account of increased cash balances of the government to meet emergency requirements as well as due to difference between the face value (which is used for the recording of debt) and the realized value (which is recorded as a budgetary receipt) of government bonds issued during this period. The government took the revolutionary and economically sound step of not borrowing from the SBP and maintaining a cash buffer, which led to a one-off increase in debt. However, this increase in debt was offset by corresponding increase in the Government’s liquid cash balances.
ISLAMABAD: The federal government has imposed a ban on purchase of motor vehicles for official use. The government imposed the ban under austerity measures.
The finance division in a circular said that financial constraints forced to take the step.
(i) There shall be complete ban on purchase of all types of vehicles. The ban shall not apply on purchase of motorcycles, student buses, ambulances and firefighting vehicles.
(ii) There shall be complete ban on creation of new posts except those required for development projects.
(iii) Privilege of periodical, magazines, newspapers etc. to the entitled officers will remain restricted to only one.
(iv) The government directed the principal account officers to ensure rationalized utility consumption. The expenditures on purchase of assets and maintenance should be bare minimum level.
(v) The government offices should use both sides of of paper for communications.
(vi) Officials should hold meetings through internet only. Officials can hold meeting physically with justifications.
The finance ministry constituted a committee to look into the needs of ministries and departments. The members of the committee:
(i) Additional Finance Secretary (Expenditure) (In Chair)
(ii) Senior Joint Secretary/ Joint Secretary (Expenditure-CGA) (Member)
ISLAMABAD – The federal government has officially announced the amount of diyat for the fiscal year 2021-2022, fixing it at Rs 4.26 million. This amount corresponds to the value of 30,630 grams of silver, as prescribed under Islamic injunctions and outlined in the Pakistan Penal Code (PPC).
ISLAMABAD: The federal government on Thursday notified the grant of 10 per cent increase in pension of all government pensioners with effect from July 01, 2021.
The finance ministry said that the President has sanctioned an increase at 10 per cent of net pension with effect from July 01, 2021 until further orders to all Civil pensioners of the Federal Government including Civilians paid from Defence Estimates as well as retired Armed Forces personnel and Civil Armed Forces Personnel.
The ministry said that the previous increase in pension would be admissible to the new pensioners who would retire on or after July 01, 2021.
The latest 10 per cent increase in pension as will also be admissible to the pensioners who would retire on or after July 01, 2021.
For the purpose of admissibility of increase in pension sanctioned in this O.M. the term “Net Pension” means “Pension being drawn” minus “Medical Allowance”.
The increase will also be admissible on family pension granted under the Pension-cum-Gratuity Scheme, 1954, Liberalized Pension Rules, 1977, on pension sanctioned under the Central Civil Services (Extra Ordinary Pension) Rules as well as on the Compassionate Allowance under CSR-353.
lf the gross pension sanctioned by the Federal Government is shared with any Government in Accordance with the rules laid down in part-iv of Appendix-lll to the Accounts Code, Volume-I, the amount of the increase in pension will be apportioned between the Federal Government and the other Government concerned on proportionate basis.
The increase in pension sanctioned in this O.M. will not be admissible on Special Additional Pension allowed in lieu of pre-retirement Orderly Allowance and monetized value of a driver or an orderly.
The benefit of increase in pension sanctioned in this O.M. will also be admissible to those Civil Pensioners of the Federal Government who are residing abroad (other than those residing in India and Bangladesh) who retired on or after 15.08.1947 and are not entitled to, or are not in receipt of pension increase under the British Government’s Pension (increase) Acts. The payment will be made at the applicable rate of exchange.
ISLAMABAD: The President of Pakistan has sanctioned the grant of ad hoc 10 per cent increase in salary of government employees effective from July 01, 2021, according to a notification issued by the ministry of finance on Thursday.
It said that the president has been pleased to sanction with effect from July 01, 2021 and till further orders, an ad hoc relief allowance 2021 at 10 percent of basic pay to all the federal government employees i.e. armed forces personnel, civil armed forces and civil employees of the federal government as well as the civilians paid from defence estimates including contingent paid staff and contract employees employed against civil posts in basic pay scales on standard terms and conditions of contract appointment.
The amount of ad hoc relief allowance 2021:
i. will be subject to income tax;
ii. will be admissible during leave and entire period of LPR except during extra ordinary leave;
iii. will not be treated as part of emoluments for the purpose of calculation of pension/gratuity and recovery of house rent;
iv. will not be admissible to the employees during the tenure of their posting/deputation abroad; and
v. will be admissible to the employees on their repatriation from posting/deputation abroad at the rate and amount which would have been admissible to them had they not been posted abroad.
The finance ministry said that the term ‘basic pay’ for the purpose of ad hoc relief allowance 2021 will also include the amount of the personal pay granted on account of annual increment(s) beyond the maximum of the existing pay scales.
ISLAMABAD: An important meeting of the ministry of finance with representatives of International Monetary Fund (IMF) will be held today evening (Thursday evening) to finalize the recommendations for budget 2021/2022.
Senior officials of the ministry of finance, three representatives, including country head, of IMF and senior officials of Federal Board of Revenue (FBR) will attend the meeting, sources said.
Officials of the IMF will attend the meeting through video link.
The meeting will discuss important points of the budget, which will include salary income tax and sales tax reforms.
The sources said that the meeting would finalize tax slabs for salaried persons.
The IMF had proposed reduction in salary tax slabs from 11 to five. Further the meeting will discuss sales tax incentives and reduced rates.
The sources said that the government would finalize the proposals after discussions with the IMF.
The source said that the government is considering an increase of 10 percent in salaries and pension. This increase would be given through adhoc basis. However, the government is not considering to grant the increase in basic pay scale.
The government has decided to allocate an amount of Rs900 billion for Public Sector Development Program (PSDP). The budget deficit may be curtailed at six percent of the GDP.
In his recent statement, Finance Minister Shaukat Tarin had already made it clear that the government was not in position to take strict measures due to covid pandemic.
ISLAMABAD: The collection of motor vehicle tax has been increased by 22.7 percent owing to better economic conditions during the current fiscal year as compared with unfavorable conditions in the last fiscal year due to corona pandemic.
According to statistics released by the ministry of finance for the period July – March 2020/2021, the collection of motor vehicle tax increased to Rs20.53 billion during the first nine months of the current fiscal year as compared with Rs16.73 billion in the same months of the last fiscal year.
The economic conditions were not encouraging at the start of the last fiscal year and later the coronavirus related lockdown adversely impacted commercial and financial activities.
The provinces have jurisdiction over the collection of motor vehicle tax.
The province wise collection revealed that the Punjab had posted 15.18 percent increase in motor vehicle tax collection during the period under review. The province collected Rs11 billion during July – March 2020/2021 as compared with Rs9.55 billion in the corresponding period of the last fiscal year.
The province of Sindh collected Rs7.55 billion during July – March 2020/2021 as compared with Rs5.52 billion during the corresponding period of the last fiscal year, showing an increase of 36.27 percent.
Khyber Pakhtunkhwa registered an increase of 9.65 percent to Rs1.25 billion during first nine months of the current fiscal year as compared with Rs1.14 billion, showing an increase of 9.65 percent.
The province of Balochistan posted the highest growth of 43.13 percent to Rs0.73 million during July – March 2020/2021 as compared with Rs0.51 million in the same period of the last fiscal year.
ISLAMABAD: The ministry of finance on Sunday invited applications for the post of Director General, Central Directorate of National Savings, Islamabad.
The ministry said that prescribed qualification, experience, age limit and other terms of contract appointment under Management Position Scales Policy, 2020 (MP-I) scale are given as under:
Qualification: Master degree in any of the disciplines: economics, statistics, commerce, accounting, finance, business administration, cost and management accountants, chartered accountants, or equivalent from an HEC recognized University / institutions.
Experience: At least 18 years experience in the banking/ financial sector or in finance related positions in the public sector.
Age Limit: minimum age 50 years; maximum age 62 years
Period of Appointment: Three years extendable for further two years contingent upon result based performance.
Place of Posting: Islamabad
Termination of Contract: On one month’s notice on either side or payment of one month’s pay in lieu thereof.
Pay Package: The pay package will be based on MP-I Scale and other incentives as per those admissible to officers in MP-I scale.
The ministry said that interested applicants should submit applications through courier service alongwith their CVs and copies of testimonials duly verified by institutes and recent photographs within 15 days of the publication of the advertisement for above mentioned position.
Only short listed candidates will be called for interview. The candidate must be citizen of Pakistan.
