Metro fare cut sparks funding debate
The recent rollback of the Metro Bus fare from Rs100 to Rs50, following public outcry and the prime minister's intervention, has offered immediate relief to thousands of commuters in Islamabad and Rawalpindi.
But behind the applause lies a more complex challenge: how to sustain quality public transport while keeping it affordable for the masses. Initially, the Capital Development Authority (CDA) defended the 100% fare hike as a necessary response to rising fuel and maintenance costs.
The aim was to maintain the Metro's standards, cleanliness, punctuality, air conditioning, and consistent service, which many consider superior to other public transport options. However, the sudden doubling of fares triggered backlash from students, daily-wage earners, and elderly citizens who rely on the Metro for their essential travel.
"I spend Rs3,000 a month just commuting to work," said Ghulam Abbas, a construction worker. "That's a major hit to my grocery budget." Similarly, schoolgirl Asma shared with this scribe how she considered skipping lunch to manage travel costs.
The government ultimately reversed the decision on June 5, reinstating the original Rs50 fare.
Commuters welcomed the move, and for many, it reaffirmed faith in responsive governance. But this solution, while popular, raises an important question: can the Metro sustain quality service on its current fare model? Metro drivers, too, expressed concerns, not just about wages, which remained unchanged, but about increasing frustration from both management and passengers. "The fare change came overnight," said driver Zahid Khan. "We didn't get more pay, and now we're blamed when people are angry about delays or crowded buses.
From a sustainability standpoint, experts argue that rather than doubling fares in one go, a phased or incremental approach would have been more practical and politically acceptable. "Even a Rs10-20 quarterly increase, spread over time, would be easier for people to absorb and for the authority to justify," noted a senior urban transport planner.
While affordability is vital, especially during times of inflation, so is the long-term health of the transit system. A sharp rollback without any adjustment plan may risk underfunding maintenance, delaying upgrades, or cutting services in the future.
Already, questions are being raised about whether buses will continue to be as clean, on time, and safe if funding gaps widen. Senior citizens like Rukhsana Bibi, who travel regularly for medical needs, suggested middle-ground solutions. "Maybe there could be concession passes for students, pensioners, and laborers, while others could pay slightly more."
Such targeted subsidies could help balance the financial model without punishing the most vulnerable riders.
Raziq Ali, who travels daily from Jinnah Garden to Islamabad G-7, and Hasnain Raza, a frequent commuter from Gulberg Greens, both agree that the Metro Bus is an affordable and comfortable option. However, they warned that a sudden 100% fare increase would push many to switch to bikes, which are cheaper but come with safety risks and are uncomfortable in bad weather.
A gradual, balanced fare increase, aligned with inflation, fuel costs, and service improvements, can ensure the Metro's long-term sustainability without burdening commuters. This would help maintain vehicle conditions, service quality, and fair employee pay.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
an hour ago
- Business Recorder
Govt unveils revised tax fraud punishment procedure
ISLAMABAD: Finance Minister Muhammad Aurangzeb, Wednesday, presented revised procedure for penalty, arrest and imprisonment to the persons committing tax fraud with new safeguards for the business community to avoid misuse of powers by the Federal Board of Revenue (FBR). The Senate Standing Committee on Finance and Revenue, under the chairmanship of Senator Saleem Mandviwalla, held its fifth consecutive session to deliberate on the Finance Bill 2025 and the Annual Budget Statement laid before Parliament. Aurangzeb informed that on special directive of Prime Minister Shehbaz Sharif, four safeguards have been placed to ensure that powers to arrest must not be misused by the tax officials of the FBR. Arrest for tax fraud: Senate panel for defining a threshold Aurangzeb stated that the government would incorporate four major safeguards for allowing arrests on tax frauds in order to avoid misuse of powers. In the first pre-requisite, the minister said that the accused of tax fraud would be arrested where there was a fear of his escape, but it would be done with the approval of three members of the Board, in grade 21, notified by the FBR. The tampering of proof could be the second reason, and the third reason could be tax fraud amounting to Rs50 million. The fourth condition of the arrest, he said, would only be possible if someone received three notices but not bothered to respond. The Senate Standing Committee on Finance has unanimously recommended for approval and collection of GST from erstwhile FATA/PATA areas and refrained from backing out at the time of approval of the budget from the Parliament. Chairman of the Finance Committee objected that the FBR cannot give sales tax exemption to only PIA. This is a discriminatory exemption and would be challenged in courts once become law. The proposal should cover all leased aircrafts and not be limited to one airline. The committee discussed a range of critical recommendations and policy matters: The committee strongly recommended withdrawing the proposed 18 per cent GST on solar panels. Members observed that ahead of the budget, certain stakeholders had imported and dumped solar equipment in anticipation of the tax hike. The chairman emphasized the discriminatory nature of the move, saying, 'The committee rejects the sudden imposition of GST on solar imports and urges immediate withdrawal.' A seven per cent pension increase for retired government employees was proposed. Proposals were put forward to extend the duration of family pensions. The Higher Education Commission (HEC) was recommended for additional funding allocations. The committee expressed serious concern over the increase in GST from 12 per cent to 18 per cent on small vehicles, including 850cc cars. Chairman Mandviwalla called the 18 per cent sales tax on a Rs3 million vehicle 'unfair,' a sentiment echoed by several senators. Proposals were discussed to moderate the tax to 14 per cent or 15 per cent instead. Senator Shibli Faraz criticised the inequity, noting that while tax relief is being extended to certain regions, small car owners continue to face high taxation. FBR Chairman Rashid Mehmood Langrial said the IMF placed a principle that wherever the reduced GST rate was five percent, it would go up to 10 percent, and any rate of over five percent would go to the standard rate of 18 percent. From the next fiscal year, iron scrap importers will be obligated to sell only to registered manufacturers. Officials said this measure aims to eliminate the misuse of 'flying invoices' and commercial manipulation in scrap trade. The committee also held into consideration the recommendations put forward by Senator Farooq Hamid Naek related to tax fraud and its offences and punishments. Senator Mandviwalla praised the overall conduct and participation of members in the budget discussions, highlighting that the nature of engagement this year signifies a transparent and participatory process reflective of public will. The committee witnessed enthusiastic participation from members of the Senate. Senators Shibli Faraz, Anusha Rahman Ahmad Khan, Faisal Vawda, Muhammad Abdul Qadir, Mohsin Aziz, Kamran Murtaza, Manzoor Ahmad, Agha Shahzaib Durrani, Ahmed Khan, Zarqa Suharwardy Taimur, Waqar Mehdi, Jam Saifullah Khan, Irfan ul Haq Siddique, Khalida Ateeb and other members attended the meeting. Copyright Business Recorder, 2025
Express Tribune
2 hours ago
- Express Tribune
Aurangzeb pledges tax, energy and SOE reforms
Listen to article Minister for Finance Muhammad Aurangzeb on Tuesday reaffirmed the government's resolve to implement structural reforms to achieve long-term economic growth and stability. Speaking at the "National Workshop on Transitioning to Defined Contribution Pension Schemes", organised by the Securities and Exchange Commission of Pakistan, the minister said that the government was committed to reforming the areas of taxation, energy and state-owned enterprises (SOEs). He emphasised that a major reform initiative introduced in the current year pertained to the tariff structure, aimed at transforming Pakistan into a more competitive economy. This includes gradually dismantling the wall of protection that has long hindered industrial growth. The minister noted that such steps would help domestic industries advance and enable the export sector to become more robust and globally competitive. The government has also taken several measures to address public finance issues, particularly to reduce debt servicing costs, not just through the decline in policy rate, but also through broader fiscal measures. Muhammad Aurangzeb underscored the importance of pension reform as a key component of the broader fiscal strategy and recalled that the government had taken a significant step in that direction last year. "As of July 1, 2024, we announced that all new entrants to the federal government and civil service will move to a defined contribution scheme," he said, adding that it was a necessary move before even beginning to address the legacy issue of unfunded liabilities. The minister stressed the need to stop fiscal bleeding as in this year's budget the pension bill alone crossed Rs1 trillion. He called pension reform not only a matter of fiscal responsibility but it was also essential to ensure long-term macroeconomic sustainability, predictability in government finances and to manage costs effectively. He highlighted that the shift from defined benefit to a defined contribution pension model had significant implications at the individual level. "This transition isn't just a fiscal adjustment; it's about empowering employees to take ownership of their retirement savings." The finance minister pointed out that the government in the FY26 budget proposed a 7% increase in pensions, which was aligned with prevailing inflation trends to protect their purchasing power. The government has also recommended a progressive taxation measure. "We have proposed a 5% tax on the annual pension income exceeding Rs10 million, which has been submitted to parliament for approval." The minister said that those steps reflected a balanced approach, providing relief to pensioners while also ensuring that high-income recipients contribute fairly to national resources.
Express Tribune
2 hours ago
- Express Tribune
Solar panel, hybrid car tax rejected
An expert said that hybrid vehicles would help Pakistan in reducing oil import bills and save foreign exchange. Photo: File Listen to article A National Assembly panel on Tuesday unanimously rejected the 18% sales tax on solar panel imports, while the government announced it would withdraw another controversial proposal to increase in sales tax on hybrid vehicles, rolling back two controversial budget measures viewed as anti-environment. The National Assembly Standing Committee on Finance also raised questions about the proposed Digital Presence Proceeds Act 2025 but did not issue a final decision. The meeting was chaired by Pakistan People's Party (PPP) MNA and former finance minister Syed Naveed Qamar. "The committee unanimously rejects the 18% sales tax on import of solar panels and its parts," Qamar said after detailed discussion. Unlike the Senate, the National Assembly and its standing committee's decisions are binding in the case of the Finance Bill. This was the committee's first formal rejection since it began reviewing the Finance Bill. The government had projected Rs20 billion in revenue from the 18% sales tax on the import and supply of photovoltaic cells, whether assembled or not. The International Monetary Fund (IMF) had not endorsed the tax, and its rejection by the committee will not affect the IMF programme. FBR Chairman Rashid Langrial said a sales tax already applied to locally assembled solar panels, and exempting imports could hurt the domestic industry. However, he failed to provide reliable data on local production's share in total sales and admitted local supply was minimal. "If the government doesn't accept our rejection, the National Assembly will veto it," said Qamar, urging alternative means to support local producers. Finance Minister Muhammad Aurangzeb said the era of subsidies had ended, to which Qamar responded that the government had just announced subsidies for electric vehicles in the same budget. "It is a cross-subsidy on electric vehicles," said Aurangzeb. "It is still a subsidy funded by someone else," replied Qamar. The budget introduced a 1% to 3% engine levy to raise Rs10 billion for electric vehicle subsidies. The government has long sought to reduce reliance on solar energy, which provides cheaper electricity than costly grid power. "No party in the National Assembly supports the 18% solar tax. The government must withdraw it," Qamar said. The finance minister acknowledged the feedback. Hybrid tax withdrawn The government also announced it would withdraw the proposed increase in sales tax on hybrid cars up to 1800cc, maintaining the current 12.5% rate. The reversal will cost an estimated Rs7 billion in potential revenue. "The 12.5% sales tax on hybrid cars will remain," said the FBR chairman. He said that although the tax hike had been announced in the budget speech, it would not be increased. This marks the second time in a year that the government proposed raising the tax on hybrid vehicles, only to backtrack before the budget's approval by the National Assembly. Under the current auto policy, the tax rate on hybrid cars cannot be increased before June 2026. However, Langrial said the government would proceed with raising the sales tax on small cars up to 850cc, often purchased by middle-income buyers. The government has proposed a sales tax rate increase from 12.5% to 18%. Langrial argued that buyers of Rs3 million cars could afford to pay 18% sales taxes. "It seems small cars will become more expensive while luxury SUVs get cheaper," remarked Pakistan Tehreek-e-Insaf (PTI) MNA Usama Mela. FBR powers spark controversy The committee also held a heated debate over proposals to expand the Federal Board of Revenue's policing powers, warning of potential abuse. "The Finance Bill is like declaring martial law on businesses," said PPP MNA Nafisa Shah. Langrial objected to the comparison. "Harsh words like martial law have been used, but I want to clarify that I work for a democratic government," he said before leaving the meeting room. Committee members also opposed giving police the authority to trace and seize untaxed cigarettes under FBR directives. They warned the measure could open new avenues for bribery. "Poor people smoke to relieve stress, but the rich can afford diet coke," quipped MNA Sharmila Faruqi. Digital tax plan questioned The committee also questioned the Digital Presence Proceeds Act, a new bill aimed at taxing online payments to foreign digital companies like Netflix and Amazon. The bill proposes a 5% tax on the value of such payments. FBR Member Dr Najeeb Memon said annual foreign payments exceeded Rs300 billion, with potential to raise Rs15 billion in tax revenue. He said credit card payments to Netflix and Amazon alone hit Rs300 billion this year, while Chinese e-commerce platform Temu made Rs4 billion in tax-free sales. Committee members urged the government to introduce the digital tax measure as a separate law, not as part of the Finance Bill.
