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  • Fiscal deficit narrows at 2.3% in first half 2019/2020

    Fiscal deficit narrows at 2.3% in first half 2019/2020

    KARACHI: The ministry of finance on Friday said that the fiscal deficit narrowed at 2.3 percent of the GDP during first half (July – December) 2019/2020 as compared with 2.7 percent in the corresponding half of the last fiscal year.

    Analysts at Topline Securities said importantly though, the primary balance during the period clocked in at 0.7 percent of GDP (last year was -0.3 percent of GDP), within the target of 0.6 percent set by the IMF.

    In the second quarter of 2019/2020, the fiscal deficit came in at 1.6 percent of GDP compared to first quarter of current fiscal year deficit of 0.7 percent of GDP.

    All the four provinces recorded a budgetary surplus during the first half and second quarter of the current fiscal year.

    During the first half of 2019/2020, total revenues increased by 39 percent YoY, where the improvement was led by 18 percent YoY higher tax revenues (however less than targeted) and 213 percent YoY higher non-tax revenues.

    Looking into further breakup of revenues, government collected 17 percent YoY higher Direct taxes, 24 percent YoY higher Sales Tax and 68 percent YoY higher Petroleum Levy during first half of the current fiscal year.

    The government hugely benefited from 575 percent YoY higher profits from State Bank of Pakistan (SBP) in the first half of the current fiscal year (also 31 percent QoQ higher in the second quarter of the current fiscal year), which is around 0.8 percent of GDP.

    The fees fetched through the auction of telecom licenses (PTA profits: 607 percent YoY higher in the first half of the current fiscal year) also helped the government achieve the primary balance target.

    On the expenditures front, total expenses increased by 26 percent YoY. Current expenditures increased by 25 percent YoY, where Mark-up Payments were up 46 percent YoY and Defense expenses were up 10 percent YoY. Excluding these items, government’s own expenses increased by 17 percent YoY during the first half of the current fiscal year (also up 49 percent QoQ in second quarter of the current fiscal year).

    _ The development expenditure remained healthy, where growth of 28 percent YoY was witnessed in 1HFY20 and 122 percent QoQ in 2QFY20.

  • Finance ministry urges careful media reporting over ebb

    Finance ministry urges careful media reporting over ebb

    ISLAMABAD: The ministry of finance on Tuesday urged the media for careful reporting over the ebb and flows of Pakistan Stock Exchange (PSX).

    “Yesterday as being unfortunate as such reports highlighting sharp volatility in the market damage the interest of the small investors and create uncertainty in the market,” a statement said.

    “The role of the media in reporting the ebb and flow in the market needs to be carefully analyzed particularly in the wake of rumors spread by a section of the media regarding alleged changes in the government’s economic team which sent wrong signal to the market and damaged the interest of small investors and hurt overall sentiment in the market,” says it added.

    The Ministry of Finance has noted that it is natural for the market to see a correction after rising sharply by over 50 percent.

    “Yesterday, the market fell 846 points. Today the market gained 417 points. These ebbs and flows of the market are driven by sentiments, whereas the fundamentals remain strong and continue to improve.”

    The Ministry of Finance also pointed out that after rising by 50 percent from August 2019 to January 2020, the KSE 100 index had already been named as the top performing market in the world by Bloomberg in December 2019.

    The improved investor confidence was based on corrective measures taken by the government to reduce the twin deficits.

    These measures were also strongly endorsed by Moody’s Investor Services in December 2019 with an upgrade in outlook to ‘stable’ from ‘negative’.

    Foreign portfolio investment in the stock market during the first 6 months of the current fiscal year has also stood at US$ 18.8 million after 4 years of heavy selling by foreign investors.

  • Finance ministry hopes ease in inflation in coming days

    Finance ministry hopes ease in inflation in coming days

    ISLAMABAD: Ministry of Finance has said that the outcome of stabilization policies, agriculture sector interventions, rigorous monitoring at federal/provincial levels, and favorable weather will bring better results in easing out inflation and sustaining the economy towards growth and productivity in the coming days.

    Adverse effects of pre-monsoon rains on the wheat crop, disruption of the supply chain of essential items due to harsh winters and thick fog, delay in harvest and arrival of the crop in the market, and lower production of vegetables, including tomato in Sindh, led to higher food inflation but the change of weather and better supply of potatoes, tomatoes and onions should result in smooth supply and decrease price pressure, says the Finance Division in an official statement on Monday.

    The Finance Division noted that another factor contributing to higher inflation was the global price impact due to international commodity prices like Palm oil increased by 43.9 percent, Soybean oil by 12.8 percent, Crude oil by 16.6 percent, etc December 2019 over December 2018 also pushed up the domestic prices. A downward trajectory in crude oil in the market will result in a downward pattern in domestic prices in the coming months.

    While the factors above are likely to ease the inflation, the government has also taken several relief measures to protect the vulnerable from the price-hike. These measures include the provision of subsidy to Utility Stores Corporation on 05 essential items for which Rs. 7 billion has been transferred to Ministry of Industries and Production; Rs. 226.5 billion allocated in the budget, Rs. 141 billion already released so far, for low-end consumers using less than 300 units of electricity in a month; PM’s Ehsaas program with doubled social safety net allocation of Rs.190bn from 100bn; out of Rs. 24 billion allocated for a gas subsidy, Rs. 12 billion have so far been released; and Rs. 1000 per family given to 5.1 million families as a special transfer in August 2019.

    Similarly, Rs. 5,000 quarterly tranche was paid to 4.3 million poor families in December 2019; Under Kifalat monthly stipends of Rs. 2,000 per month to 4.5 million families for consumption smoothing starting from 1st February 2020; 1 million new beneficiaries to be added to Kifalat in the next five months with a monthly transfer of Rs. 2,000; undergraduate scholarships to cover the cost of tuition fees and other expenses at the university for 50,000 needy students; Rs. 750 for boys and Rs. 1,000 for girls quarterly stipends to primary school-going children three million children covered; record allocation Rs.152 bn for merged FATA districts; and reduced GST on LPG to 10 percent from 17 percent.

    The Ministry of Finance said the government had also devised a strategy to control and ease out the impact of inflation through a host of policy measures which included ECC permission for import of 0.3 million tons of wheat to decrease the local wheat price and meet the domestic requirement; Zero borrowing by Govt from SBP in Current FY.

    Government retired Rs. 837.2 billion (1st July-17th January 2020) compared to the borrowing of Rs. 3770.5 billion same periods last year; Reduction in fiscal deficit, primary surplus H1FY 20; monetary tightening and demand compression by austerity; complete restriction on supplementary grants; prices monitoring Cell in Ministry of National Food Security & Research to check price hikes of essential food items; network of Sasta Bazaars and Utility Store outlets is being expanded for provision of essential items; cheaper Roti provided with a subsidy of Rs.1.5 bn for public tandoors; provincial governments monitoring the display of price list and quality of items in the open market and Sasta Bazaars; and 10) effective measures being taken by the CCP to control Cartelization and undue Profiteering

  • National Savings screening meant to stop ill-gotten money: Finance Division

    National Savings screening meant to stop ill-gotten money: Finance Division

    ISLAMABAD: The Finance Division on Monday said that the screening of all saving schemes is meant to stop any ill-gotten money to become part of financial system and to safeguard the valued investors from the menace of Money Laundering and Terrorist Financing.

    The Ministry of Finance, while clarifying news reports, said that Central Directorate of National Savings (CDNS) is committed to mitigating the deficiency to improve customer service delivery and to comply with the FATF recommendation to safeguard the investors’ interests.

    Banks under the supervision of SBP have already put in place all the required systems and KYCs (Know Your Customers) processes to comply with the FATF recommendations.

    In order to implement this requirement, Finance Division through promulgation of National Savings Schemes (AML-CFT) Rules, 2019 has decided to engage an AML-CFT compliant bank, through competitive bidding, to put in place the requirements as well as the necessary training of employees of National Savings.

    Accordingly, Expression of Interest, in consultation with SBP, has been sought from the interested bank to conduct KYC and other requirement of new as well as existing clients of CDNS.

    This will include the biometric verisys and screening of potential clients in UN Proscribed person List.

    All these screenings are meant to stop any ill-gotten money to become part of financial system and to safeguard the valued investor from the menace of Money Laundering and Terrorist Financing.

    Finance Division therefore reiterates that the steps of the Government are aimed at making the CDNS compliant with the FATF requirement and are not intended to jeopardize the interests of the account holders / customers.

    Moreover, third-party arrangement will make the organization i.e CDNS more transparent and viable for the customers and will not in any case affect its financial business.

  • National Saving Scheme AML, CFT Rules: Supervisory board constituted for monitoring

    National Saving Scheme AML, CFT Rules: Supervisory board constituted for monitoring

    ISLAMABAD: The ministry of finance has constituted supervisory board to provide independent oversight of implementation of National Savings Schemes (AML and CFT) Rules, 2019.

    The advisory board has been comprised of:

    01. Additional Finance Secretary (Budget): Chairman

    02. Syed Jahangir Shah, Director, State Bank of Pakistan: Member

    03. Ms. Tanzila Nisar Mirza, Additional Director, Securities and Exchange Commission of Pakistan: Member

    04. Adnan Imran, Director, Financial Monitoring Unit: Member

    05. Joint Secretary (B-1), Ministry of Finance: Member/Secretary

    As per the rules, the Supervisory Board shall provide independent oversight of implementation of these rules and take necessary enforcement actions against violations thereof.

    The Finance Division shall provide all secretarial and administrative support to the Board for effective discharge of its responsibilities.

    The Board shall, within two months of the commencement of these rules, devise its SOPs for supervision of CDNS to ensure compliance with AML and CFT requirements.

    The Board shall have powers to issue appropriate standard operating procedures(SOPs), demand receipt of appropriate management information system on periodical basis, direct CDNS to take such actions as may be required to address deficiencies pointed out during such assessments and advise such enforcement actions as it may deem necessary.

    The Board shall have powers to direct CDNS to take all reasonable measures to ensure compliance with provisions of the AML Act, 2010 and these rules.

    The Board shall have powers to compel production of any information or record it may require for the discharge of its responsibilities and CDNS shall provide the information and record in such format and within such timelines as may be specified by the Board.

    The Board shall have powers to engage chartered accountant firms from SBP’s approved panel of auditors to conduct onsite examinations, assess ML and TF risks posed, assess corresponding controls and determine compliance with the AML Act, 2010 and these rules and regulations issued from time to time.

    If any provision of these rules, is contravened, or if any default is made in complying with any requirement of these rules or orders or SOPs issued there under, by any officer or official of CDNS, the person who contravened shall be punishable in accordance with the law for the time being in force.

  • Economy likely to grow better than World Bank forecast

    Economy likely to grow better than World Bank forecast

    ISLAMABAD: The finance ministry on Thursday said that the economy likely to grow better than forecast of World Bank.

    The ministry said that the government’s extensive measures have helped the economy move progressively along the adjustment path and stabilization process and economic recovery is expected towards the end of FY2020.

    “The government is focused on bringing improvement in the real sector growth through inclusive growth in agriculture, industrial and services sectors,” said a statement by the Finance Division in response to certain news reports carried in a section of the regarding downward revision of growth by the World Bank.

    The government is cognizant of challenges and stringently focused on resolving them particularly, reducing inflation, creating job opportunities and achieving high growth rate.

    “Keeping in view the positive developments on major economic indicators, we expect that the economy will likely to achieve better growth prospects as against the projections of the World Bank.”

    The World Bank in its report ‘2020 Global Economic Prospects’ had forecasted Pakistan`s current year growth rate at 2.4 percent before touching 3 percent next fiscal year and 3.9 percent in FY2022.

    The bank’s report had also mentioned that the growth had decelerated an estimated 3.3 percent in FY2018-19, reflecting a broad-based weakening in domestic demand.

    In addition, the report had described that significant depreciation of the Pakistani rupee resulted in inflationary pressures, monetary policy tightening restricted access to credit, curtailing public investment to deal with large twin deficits and budget deficit rose more sharply than expected.

    It may be pointed out that during FY2019, the slowdown in economy was largely attributed to various policy measures to manage the twin deficit crisis. Consequently, these measures helped to contain demand pressures and contributed to import compression.

    However, the outcomes of these measures were realized on the industrial sector.

    Particularly LSM sector witnessed a negative growth. At the same time, high input costs along with water shortages weakened agriculture sector’s output and hence, the drag in the commodity-producing segments spilled over to the services sector as well.

    Resultantly, the real GDP growth recorded at 3.3 percent. At the start of current fiscal year, with government’s extensive measures, Pakistan’s economy is now moving progressively along the adjustment path and stabilization process; however towards the end of FY2020, economic recovery is expected. In this regard, Government is focused on bringing improvement in the real sector growth through inclusive growth in agriculture, industrial and services sectors.

    For growth in agriculture sector, the target production of wheat is 27 million tons given by FCA in last meeting held in October. In addition to uplift agriculture sector “National Agriculture Emergency Programme” in coordination with all provinces has been introduced and approved 13 mega projects at the cost of Rs 287 billion.

    Agriculture credit disbursement target for CFY20 has been set at Rs.1,350 billion. Agriculture credit disbursement increased by 20 percent to Rs 482 billion during Jul-Nov, FY2020 against Rs.402 billion last year. To boost industrial sector, the government is providing a series of subsidies and incentives to industrial sector.

    These include subsidies to industry for electricity and gas, export development package and continue to provide Long-Term Trade Financing (LTFF) and Export-Refinancing Scheme (ERS) at subsidized rate. Similarly, PSDP release process is simplified and up to 3rd January, 2020 Rs.301.4 billion (Rs.225.4 billion) released to encourage construction related industries especially cement & steel.

    In addition, Cement dispatches growth of 6.55 percent (24.8 million) during July-Dec, FY2020 against 23.2 million in the last year. This development would likely stimulate the growth in LSM in coming months. On fiscal side, to control expenditures, government is following austerity measures with complete restriction on supplementary grants.

    For export promotion several initiatives have been announced such as support duty structure on raw materials and intermediate goods, improve mechanism for tax refunds, provide electricity and gas at competitive cost, and make Pakistan part of the global value chain.

    Government’s various measures to stabilize the economy has already started to reap benefits in the form of sustained adjustment in current account deficit (CAD) and continued fiscal prudence.

    A brief review indicates that CAD reduced by 72.9 percent during July-November FY2020, Fiscal deficit contained at 1.6 percent of GDP (Rs 686 billion) during Jul-Nov FY2020 ,Primary balance posted surplus of Rs 117 billion during Jul-Nov, FY2020 (0.3 percent of GDP), significant rise in FBR tax revenues to Rs.2085.2 billion (16.4 percent) during July-December, FY2020, improved ranking in ease of doing business, ranked among the world’s top 10 best business climate improver and ‘Stable’’ credit outlook to B3 from ‘Negative’ by Moody’s is an affirmation of Government’s success in stabilizing the economy and laying a foundation for robust growth.

  • IMF acknowledges Pakistan’s reform program on track: finance ministry

    IMF acknowledges Pakistan’s reform program on track: finance ministry

    ISLAMABAD: The ministry of finance has said that International Monetary Fund (IMF) has acknowledged Pakistan’s reform program on track and business and market confidence is returning.

    In a statement on Sunday, the finance ministry highlighted IMF Board Assessment key economic performance indicators.

    It said that on the completion of first review of Pakistan’s economic performance, IMF has acknowledged that Pakistan’s reform program is on track and already producing results.

    Decisive policy implementation has started to address the deep-seated problems of Pakistan’s economy and to reverse its large imbalances, preserving financial stability.

    The report acknowledges that the business climate has improved, and market confidence is returning.

    IMF further adds in its assessment that the Government recognizes that structural reforms, especially in SoE sector are key to revive economic activity and growth.

    IMF has released SDR 328 million (about $ 452.4 million), bringing total disbursements to SDR 1,044 million (approx $1.45 billion).

    The report has confirmed that End-September performance criteria (PCs) were observed with wide margins. These include

    — Zero budgetary borrowing from SBP

    — Primary budget deficit ceiling

    — Ceiling on government guarantees

    — Zero external public payment arrears

    — SBP net international reserves (NIR), net domestic assets (NDA), and swaps/forwards targets all met

    In addition to above, all structural benchmarks (SBs) for end-September, except the SB on AML/CFT, were completed.

    With regard to inflation outlook, IMF has lowered Inflation projection for FY20 to 11.8 percent, down from 13 percent earlier on account of this fact that the administrative and energy tariff adjustments are expected to offset the effects from weak domestic demand. Thereafter, inflation is expected to converge to 5-7 percent.

    The report confirms that inflation has been started to stabilize, along with core inflation, and the SBP stance is appropriate (no need for further rate hikes).

    However, we are of the view that we will do much better than IMF projection. As inflation during Jul-Nov was 10.8 percent and with measures taken we target to bring inflation down to 5 percent over the medium term.

    With regard to the external sector, significant improvement has been witnessed. Overall, Current Account Deficit (CAD) shrunk by almost two-thirds (74 percent) in the Q1 FY 20 compared to the same period of FY 2019. CAD is projected to decline to 2.4 percent of GDP in FY20 (4.9 percent), which is lower than earlier IMF forecasts of 2.6 percent.

    Total imports fell by 23 percent y-o-y in Q1 of FY2020, but imports of machinery and equipment were more resilient, rising about 2 percent y-o-y. Exports are showing some sign of recovery, up 2 percent y-o-y for the same period with 17 percent volume growth, mainly driven by food and textiles.

    The report states that transition to a market determined exchange rate has allowed the rupee to find its new equilibrium quickly, thereby, successfully correcting the ‘exchange rate overvaluation’ of the last 5 years.

    The report has also acknowledged strong Fiscal performance in the First Quarter of FY2020 while stating Primary surplus of 0.6 percent of GDP and an overall deficit of 0.6 percent of GDP, about 1 percent of GDP better than programmed.

    In addition, Tax revenue growth was in double-digits (net of refunds) even though customs receipts and other external sector related taxes have suffered due to import compression.

    Key Concessions won by Government includes:

    Ceiling on NDA of SBP (Performance benchmark) has been enhanced to Rs 9.1 trn (8.7), an increase of Rs 339 billion in FY20.

    This is positive for growth and will be utilized for concessional financing for the export industry

    Ceiling on government guarantees has been enhanced to Rs 1.8trn (1.6), an increase of Rs 252 billion in FY20

    This is positive for growth and will allow government to settle the outstanding stock of circular debt

    Floor on FBR tax collections for FY20 has been revised lower to Rs 5.2trn (5.5), due to strong improvement in non-tax revenue

    During H1 Fy20, government non tax revenue collection has hit Rs 878 billion which is 75 percent of full year budgeted collection of Rs 1.16 trn.

    This is positive for growth and will ease the burden on public and businesses

    The finance ministry highlighted Current Economic Performance:

    Pakistan economy has witnessed significant improvements in recent months as evidenced from the performance of key economic indicators mentioned below:

    Exchange rate is stable for 5 months, Rupee appreciated by 3.2 percent (Rs/$ 160.1 to 154.89)(20th Dec, 2019), Stock Exchange 100-Index up 20.1 percent since 1st July, 2019 (33,996) to 40,832(20th Dec, 2019) , SBP FX Reserves increase to $ 10.8 billion (13th Dec, 2019), from 7.2 billion (June 2019) , Ease of Doing index up by 28 points (108/190) and World Bank rank Pakistan in Top 10 improvers.

    After 4 years of outflow, total foreign portfolio investment up $ 1.2 billion during Jul-Nov FY20 (-330 million last year). FDI increased to 850 million (477.3 million last year)↑ 78.1 percent. Total foreign investment reached to $2 billion (last year 147 million).

    Similarly, Incorporation of Companies increased 25.8 percent (7,177 from 5,707) during Jul-Nov FY2020.

    FBR tax collection grew by 16.8 percent to Rs 1615.2 billion during July-November, FY2020 against Rs 1382.9 billion last year. Within total FBR tax collection Domestic tax collection grew up 21.5 percent and Import taxes down 2.6 percent (import compression)

    On external side, Exports increased by 4.7 percent to $10.31 billion during July-November, FY2020 against $9.85 billion in the same period last year, while Imports decreased by 21.1 percent to $18.31 billion during July-November, FY2020 against $23.22 billion in the same period last year.

    Consequently, Trade deficit decreased 40.1 percent to $8.002 billion during July-November, FY2020 against $13.36 billion in the comparable period of last year.

    Cement dispatches increased by5.8 percent to 20.462 million ton (15.4million ton). Cement export increased 21.5 percent to 3.608 million ton (2.4 million ton).

    Other Developments include:

    PSDP releases system is accelerated. In this regard ways & means and Finance Division endorsement is eliminated.

    As a major development, PSX becomes best performing market as per Bloomberg in last three months. PSX benchmark KSE 100-Index gained around 10,500 point in last three months.

    Similarly, the Moody’s Investors Service upgraded Pakistan’s credit rating outlook to stable from negative.

    On external front, in the month of November, 2019 Exports increased 11.23 percent to $2.110 billion against $1.897 billion in the same month last year while Imports decreased 13.18 percent to $3.648 billion as compared with $4.202 billion in the comparable period last year.

    In October 2019, on M-o-M, LSM registered a growth 4.01 percent (Sep 1.9 percent), indicating upward trajectory. Cement dispatches increased 10.6 percent in November to 4.35 million ton (3.9 million ton).

    Another important development is that Karkey renegotiated to save Pakistan $ 1.2 billion.

    Circular Debt:

    Monthly flow decreased from Rs 38 billion in July 2019 to about Rs 10 billion. Targeted to be zero next year.

    Strategy for dealing with the stock of debt being finalized.

    Protection for lower end consumers <300 from price rationalization.

    More effective recovery/detection of electricity theft (>50 million).

    Ministry of Energy will issue an additional Rs 250 billion Sukuks (with government guarantee) in FY2020 to retire the CPPA liabilities of the IPPs.

    Compact for Jobs & Growth

    Scale up Affordable Housing devised by Naya Pakistan Housing Authority

    Additional budgetary allocation of Rs 20 billion to 30 billion in FY2020 to cover the 10 percent down payment by beneficiaries of affordable housing. The total impact of this stimulus to the economy would be equivalent to Rs 200 billion to Rs 300 billion.

    Tax Credits equal to 10 percent of the amount of expense related to these projects including labour related costs will be allowed to the developer for the first two years

    Exporter’s package

    Additional credit of Rs 200 billion for exporters under the Export Finance Scheme (EFS) in FY2020

    The interest rate differential (between Kibor and EFS markup) will be paid by additional Rs 10 billion subsidy by the government in FY2020

    This will boost export sector and reduce their cost of doing business

    SBP will give additional Rs 100 billion worth of lending to the exporters, to be subsidized by government through SBP profits.

  • Proposals for establishment of Pakistan Revenue Authority to be finalized by June 2020

    Proposals for establishment of Pakistan Revenue Authority to be finalized by June 2020

    ISLAMABAD: The ministry of finance has been directed to finalize proposals for establishment of Pakistan Revenue Authority (PRA) by June 30, 2020.

    The directives have been issued at a meeting chaired by the prime minister on restructuring of FBR held last month.

    It is decided that the ministry of finance (Revenue Division) to formulate comprehensive proposals for establishment of PRA and centralized collection of General Sales Tax (Goods and Services) by PRA under the ambit of World Bank’s “Pakistan Raises Revenue Project” by June 30, 2020.

    The meeting discussed the current structure of the FBR that it is archaic and highly bureaucratic, which does not commensurate with technology driven tax administration in vogue around the world.

    There is need to establish legislative empowered, tailored to task (lean organization) and technology driven PRA.

    In the interim period, the FBR headquarters needs to be reorganized /articulated on functional lines segregating Inland Revenue and Customs Operations into North and South Zones.

    Deputy Chairman (2) of FBR need to be appointed to effectively coordinate and supervise segregated functions of Inland Revenue and Customs.

    The meeting approved to appoint deputy chairmen for Inland Revenue and Customs by November 30, 2019.

    Following is the proposed mandate to PRA:

    • Constitutionally empowered and autonomous authority with ‘lean organization’, structured along functional lines.
    • Tax policy entrusted to Ministry of Finance (Revenue Division); guided by political leadership and informed by Tax Policy Board and PRA Board.
    • Disparate provincial revenue authorities should be consolidated into a single authority for each province under the overall coordinated, facilitation, guidance and oversight by PRA (through integrated process).
    • Establishment of Directorate General of Revenue Coordination & Oversight (headed by Director General –Grade 21) at PRA for ensuring fiscal discipline, enhance flexibility and responsiveness of fiscal framework.
    • To address collection, jurisdiction and double taxation issues, GST (including services) be adopted as PRA’s responsibility.
    • Conditional vertical resource distribution formula linked to revenue collection performance under PRA’s coordination / oversight.

    Related Posts

    FBR to get real-time data of financial transactions

    FBR to initiate criminal proceedings in tax evasion above Rs10 million

    FBR to conduct nation-wide survey of immovable properties to assess wealth parked in real estate sector

  • Provinces collect Rs7.03 billion as property tax

    Provinces collect Rs7.03 billion as property tax

    ISLAMABAD: The province have collected Rs7.03 billion as property tax during fiscal year 2018/2019 as compared with Rs5.55 billion in the preceding fiscal year, showing growth of 26.57 percent, according to details issued by the federal finance ministry.

    The collection of property tax is provincial jurisdiction and the provinces collected the tax on rental of immovable property. The sources said that the increase in tax revenue under this head was due to revision in valuation of rents on immovable properties by the provinces.

    The break-up shows that the province of Punjab collected Rs2.816 billion as property tax during fiscal year 2018/2019, which is 23.6 percent higher when compared with Rs2.278 billion in the preceding fiscal year.

    Sindh collected Rs2.85 billion as property tax during the last fiscal year, showing 41.2 percent growth when compared with collection of Rs2.016 billion in the preceding fiscal year.

    Khyber Pakhtunkhwa also collected Rs1.15 billion during the fiscal year 2018/2019 as compared with Rs1.13 billion in the preceding fiscal year.

    Baluchistan collected property tax to the tune of Rs213 million in the last fiscal year as compared with Rs122 million in the preceding fiscal year.