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  • Notification issued to raise 10% in pension

    Notification issued to raise 10% in pension

    ISLAMABAD: The Finance Division has issued a notification to implement the decision of the government to raise 10 per cent increase in pension to pensioners of the federal government.

    Prime Minister Shahbaz Sharif has sanctioned an increase of 10 per cent of net pension with effect from April 01, 2022 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.

    READ MORE: SBP’s instructions on pensioners biometric verification

    The finance division explained that for the purpose of admissibility of increase in pension sanctioned the term ‘Net Pension’ as 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 (Extraordinary Pension) Rules as well as on the Compassionate Allowance under CSR-353.

    READ MORE: EOBI to launch self assessment scheme for employers

    The finance division said that if 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-III 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.

    READ MORE: Mandatory biometric verification restored for pensioners

    “The increase in pension sanctioned 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,” it said.

    The benefit of increase in pension sanctioned 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 August 15, 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, it said.

    READ MORE: Pensioners living abroad require presenting life certificate

  • Pakistan cuts petroleum prices amid Russia-Ukraine War

    Pakistan cuts petroleum prices amid Russia-Ukraine War

    ISLAMABAD: Pakistan on Monday decided to reduce the prices of petroleum products despite the high international oil prices in the wake of Russia-Ukraine war.

    The finance division issued the notification to cut the prices of petrol and diesel by Rs10 per liter each from March 01, 2022.

    READ MORE: Pakistan raises petrol price to record high at Rs160/liter

    According to a statement issued by the finance division, the global prices of petroleum products are tracking the Ukraine-Russia war and resultantly surged to $100 per barrel. “The unprecedented increase is very risky for the domestic fuel prices and inflation,” it added.

    The situation leaves very few options for the government, it said, adding that prior to review on February 28, 2022, the government had left more than Rs70 billion per month to keep the prices lower and providing relief to the masses.

    READ MORE; Petroleum prices kept unchanged for next fortnight

    In the fortnightly review on February 28, 2022, the Oil and Gas Regulatory Authority (OGRA) recommended Rs10 per liter increase in the prices of petroleum products.

    “The prime minister has not only rejected the increase but also announced to decrease the prices of petroleum products by Rs10 per liter in his address to the nation in order to provide maximum relief to the consumers, despite the limited fiscal space,” it added.

    READ MORE: Pakistan’s petrol price rises to record high at Rs147.83

    According to the statement the new prices of the petroleum products effective from March 01, 2022 are:

    The price of petrol slashed by Rs10 to Rs149.86 per liter from Rs159.86.

    The rate of high speed diesel has been reduced by Rs10 to Rs144.15 per liter from Rs154.15.

    READ MORE: Prices of all POL products increased to wish New Year

    The price of kerosene oil has been brought down by Re1 to Rs125.56 per liter from Rs126.56.

    Similarly, the rate of light diesel oil has been slashed by Rs5.66 to Rs118.31 per liter from Rs123.97.

  • Notification issued for implementing 15% salary increase

    Notification issued for implementing 15% salary increase

    ISLAMABAD: The finance ministry has notified an office memorandum for the increase of 15 per cent in the salary of federal government employees from March 01, 2022.

    According the memorandum dated February 23, 2022, the employees of the federal government will get disparity reduction allowance at 15 per cent of the basic pay scales 2017 with effect from March 01, 2022.

    The federal government on February 10, 2022 announced an increase of 15 per cent in salaries of employees from BS-1 to BS-19.

    READ MORE: Federal government announces 15% increase in salaries

    The latest memorandum stated that the allowance shall be admissible to civil employees in BPS-1 to BPS-19 of the federal government, (including employees of the federal secretariat, attached departments and subordinate offices) who have never been allowed additional allowance / allowances equal to or more than 100 per cent of the basic pay (whether frozen or not) or performance allowance subject to the following conditions:

    READ MORE: Withholding tax rates on salary income for 2021-2022

    a. This allowance will not be admissible to the employees of the organizations who are drawing additional allowance/allowances equal to or more than 100 per cent of the basic pay (whether frozen or otherwise);

    b. This allowance will be frozen at the level drawn on March 01, 2022;

    c. This allowance will be subject to Income Tax;

    d. This allowance will be admissible during leave and entire period of LPR except during extra ordinary leave;

    e. This allowance will not be treated as part of emoluments for the purpose of calculation of pension/gratuity and recovery of house rent;

    READ MORE: Employers to deduct tax on salary income

    f. This allowance will not be admissible to the employees during the tenure of their posting/deputation abroad;

    g. This allowance 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;

    READ MORE: Tax on salary income of earlier year

    h. This allowance will be admissible during the period of suspension;

    i. The term ‘basic pay’ will also include the amount of personal pay granted on account of annual increment (s) beyond the maximum of the existing pay scales.

  • Federal government announces 15% increase in salaries

    Federal government announces 15% increase in salaries

    ISLAMABAD: The federal government on Wednesday announced an increase of 15 per cent in salaries of employees from BS-1 to BS-19.

    A statement issued by the Finance Division, an arm of the Finance Ministry, said that the government had decided to give 15 per cent disparity allowance on running basic pay to less privileged employees from BS-1 to BS-19 with effect from March 01, 2022. The above package is also recommended to the provinces for adoption from their own funds.

    READ MORE: Withholding tax rates on salary income for 2021-2022

    Further, a summary for timescale promotion has been initiated by the Finance Division to mitigate the hardship being faced by employees stuck in the same grade for a long time.

    READ MORE: Pakistan’s fiscal deficit contracts at 2.1% in 1HFY22

    The matter of upgradation of posts on the analogy of Khyber Pakhtunkhwa will be decided based on the findings of the study being conducted by MS Wing of the Establishment Division by end April 2022.

    READ MORE: Employers to deduct tax on salary income

    Further, the merger of Adhoc Relief/Allowances into pay will be decided on report of pay and pension commission and will be merged in basic pay as per agreement.

    READ MORE: Tax on salary income of earlier year

  • Pakistan’s fiscal deficit contracts at 2.1% in 1HFY22

    Pakistan’s fiscal deficit contracts at 2.1% in 1HFY22

    ISLAMABAD: Pakistan’s fiscal deficit during the first half (July – December) of 2021/2022 has contracted at 2.1 per cent as compared with 2.5 per cent in the same half of the last fiscal year, the finance ministry said on Wednesday.

    The reduction in deficit mainly contraction in expenditure during the half.

    READ MORE: Pakistan, China discuss bilateral economic, trade ties

    The revenue to the GDP ratio fell to 6.2 per cent during the first half of the current fiscal year as compared with 7.4 per cent in the same half of the last fiscal year.

    The expenditure to the GDP ratio also declined to 8.2 per cent during the first half of the current fiscal year as compared with 9.9 per cent in the same half of the last fiscal year.

    READ MORE: PM Imran invites Chinese companies to invest in Pakistan

    The GDP size during the first half of the current fiscal year has been measured at Rs63.978 trillion as compared with Rs45.567 trillion in the same half of the last fiscal year.

    According to the fiscal operation for first half (July – December) 2021/2022 released by the finance ministry, the total revenue was recorded at Rs3.95 trillion, out of which, the tax revenue was at Rs3.19 trillion and non-tax revenue was Rs764.93 billion.

    READ MORE: Prime Minister Imran kicks off visit to China

    Total expenditure during the first half of the current fiscal year has been recorded at Rs5.32 trillion. The current expenditure has been recorded at Rs4.67 trillion, out of which Rs520 billion was spend on defence. An amount of Rs571 billion was spent for development expenditure and net lending.

    To meet the budget deficit of Rs1.372 trillion, the government borrowed Rs 1.025 trillion from external sources and remaining Rs346 billion arranged from domestic sources.

    READ MORE: PM Imran terms exports, tax collection must for growth

  • Petroleum prices kept unchanged for next fortnight

    Petroleum prices kept unchanged for next fortnight

    ISLAMABAD: The government on Monday decided to keep prices of petroleum products unchanged at the level of November 05, 2021, for the next fortnight.

    The prices will remain unchanged from November 16, 2021, till the end of the month: Petrol Rs145.82 per liter; High-Speed Diesel (HSD) Rs142.62 per liter; Kerosene Oil Rs116.53 per liter; and Light Diesel Oil Rs114.07 per liter.

    A statement issued by the Finance Division said that despite rising petroleum products prices globally, the Prime Minister of Pakistan has kindly rejected the proposal for enhancement in the prices and desired that the prices of petroleum products from November 16, 2021, shall remain the same as notified on November 04, 2021, for providing maximum relief to the general public.

    The decision has been taken in the public interest. The government will bear the burden by making adjustments in the sales tax rates, etc.

    Muzzammil Aslam, spokesman to the finance minister in a Tweet said: “History has been made today. In today’s petrol prices the Sales Tax is effective zero per cent.”

    Petrol tax rate cut by 73% to lower global oil price impact
  • ITFC provides $761.5 million for Pakistan oil, gas import

    ITFC provides $761.5 million for Pakistan oil, gas import

    ISLAMABAD: The International Islamic Trade Finance Corporation (ITFC) will provide financing of an amount $761.5 million to Pakistan for import of oil and gas.

    In this regard a financing agreement amounting to $761.5 million has been signed between the Ministry of Economic Affairs, Government of Pakistan and International Islamic Trade Finance Corporation (ITFC) for import of crude oil, refined petroleum products and LNG etc.

    The financing agreement was signed by Mian Asad Hayaud Din, Secretary, EAD and Eng. Hani Salem Sonbol, CEO, ITFC. The facility has been made effective immediately and ready for utilization by Pakistan State Oil Company Ltd (PSO), Pak Arab Refinery Ltd (PARCO) and Pakistan LNG Ltd (PLL) for import of oil and gas.

    This Syndicated Murabaha Financing facility of $ 761.5 million is for a period of one year and is a part of umbrella Framework Agreement signed with ITFC in June 2021 for total envelop of $ 4.5 billion ($ 1.5 million annually) for a period of three-years.

    Originally, ITFC had agreed to provide the financing of US$ 300 million. However, due to growing energy needs of the country and enhanced confidence level of international financial institutions on economic reforms and recovery amid COVID-19 pandemic, the financing was over-subscribed by 2.5 times i.e. from $ 300 million to from $ 761.5 million.

    The financing facility will also be helpful in financing oil and gas import bill of the country and easing of pressure on foreign exchange reserves of the country.

    Mian Asad Hayaud Din, Secretary, EAD appreciated the support for ITFc for arranging US$ 761.5 million for trade financing. He lauded the efforts of Eng. Hani Salem Sonbol, CEO, ITFC and his team for making this transaction successful.

    The ITFC and GOP have also agreed to continue their cooperation in future to mobilize financial resources to support Pakistan in its endeavours to achieve its economic growth targets through ITFC financing facility.

    Trade financing facility of $551 million signed for import oil, LNG
  • Pakistan’s fiscal deficit lowers by 9.5% in first quarter

    Pakistan’s fiscal deficit lowers by 9.5% in first quarter

    KARACHI: Pakistan’s fiscal balance in the outgoing first quarter of 2021/2022 posted a deficit of PKR 438 billion, -9.5 per cent YoY lower than prior year’s deficit, according to data released by the finance ministry on Tuesday.

    In terms of per cent GDP, the deficit arrived at 0.8 per cent in 1QFY22 compared to 1.1 per cent recorded in 1QFY21 (PKR 484 billion), said analysts at Arif Habib Limited.

    However, the primary surplus during the period stood at PKR 184 billion (0.3 per cent of GDP in 1QFY22) , down 29 per cent YoY, compared to a primary surplus of PKR 258 billion witnessed same period last year (0.6 per cent of GDP).

    Primarily, total revenue growth of 22 per cent in 1QFY22 to PKR 1.8 trillion (1QFY21: PKR 1.5 trillion) aided the fiscal balance, translating into 3.4 per cent of GDP vs. 3.2 per cent same period last year.

    The total tax revenue collection was up by 37 per cent YoY to PKR 1.5 trillion. Indirect taxes (+42 per cent YoY to PKR 917 billion) mainly on the back of higher sales tax (+43 per cent YoY to PKR 264 billion), and direct taxes (+32 per cent YoY to PKR 481 billion amid higher number of tax payers), contributed to the overall collection.

    In addition, the government collected PKR 276 billion in non-tax revenues, displaying a decline of 23 per cent YoY. This was particularly owed to lower Petroleum Levy (-90 per cent YoY | PKR 13 billion). On the flipside, the surplus profit of State Bank of Pakistan and Pakistan Telecommunication Authority increased during 1QFY22 to PKR 109 billion (+4 per cent YoY) and PKR 30 billion (+269 per cent YoY), respectively.

    In addition, total expenditures went up by 14 per cent YoY to PKR 2.3 trillion (4.2 per cent of GDP vs. 4.3 per cent of GDP in 1QFY21).

    Further breakup revealed that current expenditure underwent an uptick of 9 per cent YoY of which defence rose by 17 per cent YoY.

    However, the markup expenses went down by 16 per cent YoY to PKR 623 billion. Moreover, development expenditure and net lending undertaken by the government increased by 38 per cent YoY to PKR 180 billion.

    Total PSDP expenditure in 1QFY22 arrived at PKR 262 billion (+63 per cent YoY) with provincial expenditure at PKR 154 billion (+71 per cent YoY), outdoing federal disbursement of PKR 108 billion (+53 per cent YoY).

    Pakistan’s fiscal deficit narrows in nine months