Pkrevenue.com

Tag: finance ministry

  • Remittances to remain strong for financing trade deficit: finance ministry

    Remittances to remain strong for financing trade deficit: finance ministry

    ISLAMABAD: The ministry of finance on Monday hoped the inflows of remittances to remain strong enough to support the financing of the trade deficit in coming months.

    In its monthly economic update and outlook – January 2021, the ministry said that the sudden surge in imports due to the increase in international oil prices and import of additional food products enhanced imports by $ 1.2 billion alone in December 2020 ($ 5.0 billion) compared to December 2019 ($ 3.8 billion).

    “However, there was no pressure on foreign reserves as Current Account remained in surplus for H1 FY 2021. Looking forward, depending on these explanatory factors, imports may remain $ 4.5 – $ 5.0 billion in next month,” the ministry said.

    Exports are expected to stabilize around current levels, it added.

    “But in the baseline scenario, the trade balance is not expected to further deteriorate. Remittance inflows remain strong and continue to provide strong support to the financing of the trade deficit,” the ministry said.

    The finance ministry said that Pakistan’s economy consecutively suffered from Balance of Payment (BOP) crisis and COVID-19 pandemic kept economy below its potential level.

    Since the start of current fiscal year, economy has started recovering. The government is committed to monitor external balance and its financing closely.

    Furthermore, the government has also taken policy and administrative measures to monitor the supply and market functioning wherever necessary to mitigate inflationary pressure.

    The restoration and acceleration of Pakistan’s productive capacity is a necessity to ensure a high and sustainable growth in the near and longer term. In the near future, the economic recovery is expected to translate into more productive investment expenditures.

    The government is committed to motivate investments in crucial sectors of the economy to enhance productive capacities and to stimulate economic growth.

    Fiscal performance remained satisfactory. Currently, the fiscal policy actions are primarily concentrated on relief measures to support businesses stay afloat and to protect vulnerable segments of society.

    At the same time, the government is focused on containing the fiscal deficit at a manageable level and keeping the primary balance at a sustainable level.

    According to latest fiscal numbers, healthy growth in non-tax revenues, satisfactory performance of FBR tax collection despite issuance of higher number of refunds and controlling of expenditures other than mark-up payments and COVID related would pave the way to maintain the fiscal deficit within the reasonable limits in coming months, the ministry said.

    The finance ministry said that the current outlook ensures economic revival on the basis of continued recovery seen in recent months but there is possibility of slower economic activities especially in services sector depending on the intensity and duration of pandemic.

  • Process initiated to assess, evaluate retirement benefit scheme

    Process initiated to assess, evaluate retirement benefit scheme

    ISLAMABAD, July 12, 2024 – In a significant move aimed at managing fiscal responsibilities, the federal government of Pakistan has launched an initiative to evaluate and assess liabilities pertaining to its retirement benefit schemes.

    (more…)
  • Rising coronavirus cases may impact revenue collection in second quarter

    Rising coronavirus cases may impact revenue collection in second quarter

    ISLAMABAD: The ministry of finance has said that the rising cases of coronavirus may slowdown economic activities and adversely impact revenue collection in second quarter (October – December) of the current fiscal year.

    (more…)
  • Budget deficit swells to 1.1 percent in first quarter

    Budget deficit swells to 1.1 percent in first quarter

    ISLAMABAD: The budget deficit has ballooned to 1.1 percent of the GDP for the first quarter (July – September) 2020/2021 as compared with the deficit of 0.7 percent in the corresponding quarter of the last fiscal year, according to fiscal statistics released by the finance ministry on Wednesday.

    The size of GDP has been estimated at Rs45,567 billion by the end of first quarter of the current fiscal year as compared with the size of Rs44,003 billion in the same period of the last fiscal year.

    The ministry said that the total revenue had declined nominally to Rs1478.75 billion during the first quarter of the current fiscal year as compared with Rs1,489 billion in the same quarter of the last fiscal year.

    Tax revenue has also declined to Rs1,122 billion for the quarter under review as compared with Rs1,142 billion in the same quarter of the last fiscal year.

    Out of the total tax revenue for the first quarter of the current fiscal year, the federal government contributed Rs1,011 billion and provincial governments contributed Rs111.76 billion.

    The ministry said that non-tax revenue witnessed an increase to Rs356.35 billion during the first quarter of the current fiscal year as compared with Rs346 billion in the same quarter of the last fiscal year.

    Out of total non-tax revenue, the federal government contribution was Rs336 billion and the share of provincial government was Rs20 billion.

    Total expenditures have registered significantly to Rs1,963 billion during July – September of fiscal year 2020/2021 as compared with Rs1,775 billion in the corresponding quarter of the last fiscal year.

    Current expenditure sharply increased to Rs1,812 billion during first quarter of the current fiscal year as compared with Rs1,582 billion in the same quarter of the last fiscal year.

    Expenditure of mark-up payment increased to Rs742 billion as compared with Rs571 billion.

    However, defence expenditure fell to Rs224 billion during first quarter of the current fiscal year as compared with Rs242 billion in the same quarter of the last fiscal year.

    The government spent Rs215 billion on development projects during the first three months of the current fiscal year as compared with Rs147.17 billion in the corresponding period of the last fiscal year.

    The fiscal deficit for the first quarter of current fiscal year was recorded at Rs484 billion as compared with the deficit of Rs286 billion in the same quarter of the last fiscal year.

  • Govt. slashes prices of petrol, HSD

    Govt. slashes prices of petrol, HSD

    ISLAMABAD: The government on Saturday announced reduction in prices of petrol and High Speed Diesel (HSD) effective from November 01, 2020.

    In a notification issued by the ministry of finance said that the government had decided to reduce prices of petrol by Rs1.57 per liter and HSD by Re 0.84 per litter.

    The new prices effective from 12 midnight today are as follow:

    MS Petrol Rs 102.40 per liter

    HSD Rs103.22 per liter

    Kerosene oil Rs65.29 per liter

    Light Diesel Oil Rs62.86 per liter

  • Inflation is one of main challenges: finance ministry

    Inflation is one of main challenges: finance ministry

    ISLAMABAD: The ministry of finance has said that economic growth is showing persistent recovery but the inflation is one of the main challenges.

    According to monthly economic update issued on Tuesday, the finance ministry said that economic growth is showing persistent recovery in first quarter (July – September) 2020/2021.

    In absence of any adverse future shocks, the economy is on its way not only to rebound from the pandemic related crises, but also to record a reasonable growth rate for the full fiscal year.

    “Presently, inflation is one of the main challenges. However, the government is taking all possible measures to control it,” it said.

    Together with measures that ensure sufficient supply of goods, especially food related production, it is expected that inflation will remain under control whereas policy measures will contribute to better functioning markets.

    Most importantly, although domestic economic activity is expected to recover, still the risk of pandemic attack persists if the SoPs are not fully followed.

    “Thus, Pakistan’s near-term economic prospects are promising subject to reducing uncertainty and restoring business confidence,” the ministry added.

    Usually main drivers of the consumer price index (CPI) are international commodity prices, especially food and oil products, the exchange rate, growth of broad money and the policy interest rate.

    “However, in Pakistan most recently, CPI remained driven by higher food prices, while non-food inflation remained moderated,” the ministry added.

    Supply disruption in food related commodities was mainly due to extended monsoon season which has built inflationary pressure.

    In recent weeks, the international food prices have rebounded somewhat, whereas oil prices declined and the Pak Rupee exchange rate slightly appreciated against the USD, thus easing out inflationary prospects.

    There is no change in Indirect tax or other fiscal measures. Likewise, interest rate is kept same as per the policy interest rate in July 2020.

    “Thus, accommodative Fiscal and Monetary Policy helped in controlling core inflation. The government is making all efforts to control inflation by smoothing supply even by expediting imports of sugar and wheat, which are considered as essential food commodities.

    On weekly basis, impact can be predicted from decline of 0.23 percent in SPI on 22nd October 2020. This decline occurred after seven weeks.

    On the basis of current economic scenario, headline inflation is expected to remain within a range of 7.3 to 9.3 percent in October 2020.

    Economic recovery has been observed from the start of the new fiscal year.

    Most importantly the decrease in number of Corona virus cases and the resumption of economic activities have contributed in dampening the negative impact of health crisis on the economy.

    Economic recovery was seen in Q1 FY2021 and it is expected that this trend will continue but fears and risk factors are appearing due to the possible second wave of COVID, the ministry said.

  • Mark-up rate for general provident fund announced

    Mark-up rate for general provident fund announced

    ISLAMABAD: The ministry of finance on Tuesday announced 12 percent mark-up rate on State Provident Fund i.e. General Provident Fund (GP Fund) for fiscal year 2019/2020.

    The mark-up rate has been reduced to 12 percent for fiscal year 2019/2020 as against 14.35 percent for the fiscal year 2018/2019.

    The mark-up rate for GP Fund for fiscal year 2017/2018 was 11.70 percent and for fiscal year 2016/2017 the rate was 11.3 percent.

  • Pakistan’s fiscal deficit narrows to 8.1 percent in FY20

    Pakistan’s fiscal deficit narrows to 8.1 percent in FY20

    KARACHI: Pakistan’s budget deficit narrowed to 8.1 percent in FY20 (2019/2020) as compared with the deficit of 8.9 percent in the preceding fiscal year, according to statistics released by the ministry of finance on Wednesday.

    Analysts Topline Securities said that as the deficit is lower than the 9.1 percent of GDP envisaged by the government owing to lower utilization of the Rs1.24 trillion COVID-19 relief package. Reportedly around Rs480 billion could not be spent during the year.

    The primary deficit for the year clocked in at 1.8 percent of GDP or Rs757 billion (last year was 3.5 percent of GDP or Rs1,354 billion).

    In 4QFY20, the fiscal deficit came in at 4.3 percent of GDP compared to 9MFY20 fiscal deficit of 3.8 percent of GDP due to implications of COVID-19 on both revenues and expenditures.

    Sindh and Baluchistan recorded a budgetary surplus during FY20, with  Punjab and KPK recording budgetary deficits during the period.

    Total Revenues increased by 28 percent YoY in FY20, where the improvement was led by 257 percent YoY higher Non-Tax Revenues which includes Rs936 billion surplus profit from SBP.

    The Tax Revenues increased by only 6 percent YoY during the year, where they declined by 12 percent YoY in 4QFY20 owing to COVID-19 outbreak. The government collected 5 percent YoY higher Direct Taxes, 9 percent YoY higher Sales Tax and 42 percent YoY higher Petroleum Levy during FY20.

    In 4QFY20, as expected due to lockdown Direct Taxes and Sales Tax were down by 16 percent YoY and 15 percent YoY, respectively while Petroleum Levy was up 47 percent YoY.

    On the expenditures front, Total Expenditure increased by 16 percent YoY in FY20. Current Expenditure increased by 20 percent YoY, where Mark-up Payments were up 25 percent YoY and Defense Expenditures were up 6 percent YoY.

    In 4QFY20, Current Expenditure is up by 55 percent QoQ and 27 percent YoY due to COVID-19 related expenses.

    The Development Expenditure remained steady (-1 percent YoY) in FY20, with 4QFY20 expenses rising by 37 percent QoQ but down 21 percent YoY.

    In spite of the decline in interest rates, government interest bill increased by 24 percent QoQ and 17 percent YoY during 4QFY20 owing to greater borrowing at higher rates and interest payment schedule.

    The analysts estimated that Pakistan’s fiscal deficit to clock in at around 8.5 percent of GDP in 2020/2021 due to continuing implications of COVID-19.

  • Date extended to exchange Rs40,000 bearer prize bonds

    Date extended to exchange Rs40,000 bearer prize bonds

    ISLAMABAD: The ministry of finance on Thursday extended the last date to exchange bearer prize bonds of Rs40,000 denomination up to December 30, 2020.

    The last date to exchange the bearer prize bonds was expired on June 30, 2020.

    The government on June 24, 2019 announced to discontinue the circulation of Rs40,000 denomination national prize bonds.

    The State Bank of Pakistan (SBP) allowed the investors to exchange the unregistered prize bonds through three different modes. The SBP has barred the exchange of bearer prize bonds against cash.

    However, the bonds can be redeemed against registered or premium prize bonds or can be converted into national saving schemes or face value (direct transfer to the bank account of bond holder).

    The bearer instruments have been known as parking lot for undocumented economy. Therefore, the government launched registered prize bonds of Rs40,000 denomination in March 2017 which could be purchased against certain requirements including Computerized National Identity Card (CNIC) and valid bank account.

    According to Central Directorate of National Savings (CDNS) data made available on Friday people surrendered around Rs256 billion bearer prize bonds of Rs40,000 denomination since the ban imposed June 2019 for documentation of the economy.

    The data showed the total stock of investment made in bearer bonds of Rs40,000 denomination was Rs258 billion by May 2019. The remaining stock of bearer bonds is Rs2 billion by March 2020.