Latest news with #Mandviwalla
Business Recorder
10-07-2025
- Business
- Business Recorder
Govt decides to review Pakistan Remittances Initiative
ISLAMABAD: The government has decided to review Pakistan Remittances Initiative (PRI) - a crucial scheme for bringing remittances through formal channels, as payout increased by around four times while remittances by around two times during the last 10 years. Additional Secretary Finance Amjad Mehmood, while briefing the Senate Standing Committee on Finance and Revenue said that Finance Ministry took a summary into the Economic Coordination Committee (ECC) of the Cabinet and sought approval for reviewing PRI scheme. Following ECC's approval, the Cabinet has also directed for reviewing the scheme. The committee which met with Saleem Mandviwalla in the chair was briefed by Dr Inayat Hussain, deputy governor State Bank of Pakistan (SBP) on the PRI including the policy changes in the scheme over the years, including rates or other relevant aspect, along with their financial impact. Remittances: govt set to withdraw some incentives Mandviwalla stated that there is a dire need to review the PRI policy as the number of payouts increased manifold compared to the increase in remittances. Mandviwalla said that remittances were around $19 billion 10 years back, which now reached to over $36 billion; i.e., almost doubled. However, the payout under the scheme was around Rs20 billion which is now reached around Rs130 billion. Hussain said that the scheme was crucial for bringing remittances through the formal channels. He said that eligible transaction limit has been increased from $100 to $200. The committee was informed that since 2009, PRI has been working towards enhancement of home remittances through formal channels in Pakistan. As a result of active engagements with financial institutions (FIs), the number of FIs on PRI network has increased from around 25 in 2009 to more than 50 in 2024. The FIs include conventional banks, Islamic banks, microfinance banks, and Exchange Companies (ECs). Further, the Electronic Money Institutions (EMIs) are also allowed to receive home remittances by working through the banks. The number of international entities has increased from around 45 in 2009 to around 400 at present. In fiscal year 2024 alone, around 33 new international entities joined the home remittance business with the Pakistani FIs under the PRI channel. Through concerted efforts, remittance inflows have grown nearly fourfold, rising from $7.8 billion in fiscal year 2009 to $30.3 billion in fiscal year 2024. Over the past decade alone, remittance inflows have achieved an impressive 65 percent growth, reflecting their increasing significance and steady contributions to Pakistan's economy. While discussing the delay in enforcement of local currency settlement, the Chairman Committee reiterated that commercial banks issue VISA and MasterCard, who earned around $300 million from the country, without providing an option of PayPak. He further opined that all local debit cards should be linked to PayPak. The Committee recommended that commercial banks should give an option of PayPak on the form at the time of issuance of debit cards. The committee was informed that as of March 2025 of the 53 million debit and credit cards in Pakistan; about 10 million are PayPak and 2.5 million co-badged, while the rest are owned by Visa and MasterCard. The SBP informed the committee in writing that Visa/ MasterCard/ Union Pay; etc., are international payment schemes that offer card services all over the world. These schemes were established decades ago and offer many services such as online and shop-based payments. A large global network of merchants is connected with the platforms of VISA/ Master for accepting in-store and online payments. The SBP has undertaken various measures to reduce the country's reliance on these international card schemes and to promote cost-efficient, local currency-based payment instruments. Co-badging arrangements with international networks are also under development to allow broader use cases, including international and e-commerce transactions. While pricing structures of Visa/ MasterCard are governed by bilateral commercial arrangements between banks and payment schemes, SBP continues to provide strategic direction and oversight to promote fair competition and to lower the cost of digital financial services. The dominance of international payment schemes still persists due to several market factors such as (i) Strong brand recognition and global trust in Visa and MasterCard; (ii) their ability to support international and e-commerce transactions; (iii) provision of market development funds by schemes to issuing banks, and allowing discounts and promotional offers for customers. Copyright Business Recorder, 2025
Business Recorder
10-07-2025
- Business
- Business Recorder
Govt decides reviewing PRI
ISLAMABAD: The government has decided to review Pakistan Remittances Initiative (PRI) - a crucial scheme for bringing remittances through formal channels, as payout increased by around four times while remittances by around two times during the last 10 years. Additional Secretary Finance Amjad Mehmood, while briefing the Senate Standing Committee on Finance and Revenue said that Finance Ministry took a summary into the Economic Coordination Committee (ECC) of the Cabinet and sought approval for reviewing PRI scheme. Following ECC's approval, the Cabinet has also directed for reviewing the scheme. The committee which met with Saleem Mandviwalla in the chair was briefed by Dr Inayat Hussain, deputy governor State Bank of Pakistan (SBP) on the PRI including the policy changes in the scheme over the years, including rates or other relevant aspect, along with their financial impact. Remittances: govt set to withdraw some incentives Mandviwalla stated that there is a dire need to review the PRI policy as the number of payouts increased manifold compared to the increase in remittances. Mandviwalla said that remittances were around $19 billion 10 years back, which now reached to over $36 billion; i.e., almost doubled. However, the payout under the scheme was around Rs20 billion which is now reached around Rs130 billion. Hussain said that the scheme was crucial for bringing remittances through the formal channels. He said that eligible transaction limit has been increased from $100 to $200. The committee was informed that since 2009, PRI has been working towards enhancement of home remittances through formal channels in Pakistan. As a result of active engagements with financial institutions (FIs), the number of FIs on PRI network has increased from around 25 in 2009 to more than 50 in 2024. The FIs include conventional banks, Islamic banks, microfinance banks, and Exchange Companies (ECs). Further, the Electronic Money Institutions (EMIs) are also allowed to receive home remittances by working through the banks. The number of international entities has increased from around 45 in 2009 to around 400 at present. In fiscal year 2024 alone, around 33 new international entities joined the home remittance business with the Pakistani FIs under the PRI channel. Through concerted efforts, remittance inflows have grown nearly fourfold, rising from $7.8 billion in fiscal year 2009 to $30.3 billion in fiscal year 2024. Over the past decade alone, remittance inflows have achieved an impressive 65 percent growth, reflecting their increasing significance and steady contributions to Pakistan's economy. While discussing the delay in enforcement of local currency settlement, the Chairman Committee reiterated that commercial banks issue VISA and MasterCard, who earned around $300 million from the country, without providing an option of PayPak. He further opined that all local debit cards should be linked to PayPak. The Committee recommended that commercial banks should give an option of PayPak on the form at the time of issuance of debit cards. The committee was informed that as of March 2025 of the 53 million debit and credit cards in Pakistan; about 10 million are PayPak and 2.5 million co-badged, while the rest are owned by Visa and MasterCard. The SBP informed the committee in writing that Visa/ MasterCard/ Union Pay; etc., are international payment schemes that offer card services all over the world. These schemes were established decades ago and offer many services such as online and shop-based payments. A large global network of merchants is connected with the platforms of VISA/ Master for accepting in-store and online payments. The SBP has undertaken various measures to reduce the country's reliance on these international card schemes and to promote cost-efficient, local currency-based payment instruments. Co-badging arrangements with international networks are also under development to allow broader use cases, including international and e-commerce transactions. While pricing structures of Visa/ MasterCard are governed by bilateral commercial arrangements between banks and payment schemes, SBP continues to provide strategic direction and oversight to promote fair competition and to lower the cost of digital financial services. The dominance of international payment schemes still persists due to several market factors such as (i) Strong brand recognition and global trust in Visa and MasterCard; (ii) their ability to support international and e-commerce transactions; (iii) provision of market development funds by schemes to issuing banks, and allowing discounts and promotional offers for customers. Copyright Business Recorder, 2025
Business Recorder
20-06-2025
- Business
- Business Recorder
FBR chief urges Senate body to abolish 7th Schedule of ITO, bring banks into normal tax regime applicable to companies
ISLAMABAD: Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial, Thursday, strongly recommended Senate Standing Committee on Finance to abolish Seventh Schedule (Banking Schedule) of the Income Tax Ordinance 2001 and bring banks into normal tax regime applicable to companies. The FBR chairman expressed serious concern over special tax treatment to the banking companies. 'Banking Schedule must be abolished from the income tax law', Rashid Mahmood said. He stated that the banks should be treated like any other company. 'Why the banks be given totally different tax treatment as compared to other registered companies', the FBR chairman questioned. 'Tax laws cannot be dictated to the government by any particular sector', the FBR chairman criticised. In 2007, this schedule was inserted in the Income Tax Ordinance 2001, which needs to be deleted, the FBR chairman said. Langrial stated that the banks are engaged in business and why we are applying different tax laws on banks. Seventh Schedule (Banking Schedule) of the Income Tax Ordinance should not remain part of the tax law and it should be abolished from the Income Tax Ordinance. Banks should not be given different tax treatment, the FBR chairman said. While review of the Finance Bill (2025-26) on Thursday, the taxation issue of banking sector was discussed in detail at the Senate Standing Committee on Finance and Revenue, under the chairmanship of Senator Saleem Mandviwalla. FBR Member Inland Revenue (Operations) Hamid Atiq Sarver was specially invited to explain banking related amendments in the Finance Bill (2025-26). When Mandviwalla asked the Securities and Exchange Commission of Pakistan (SECP) chairman about the legal status of banks, Akif Saeed informed the committee that the banks are registered like any other company. The FBR Member Inland Revenue (Operations) explained in detail all legal and technical amendments relating to the banking schedule of the Income Tax Ordinance 2001. Later, amendments were approved by the committee. Chairman of the committee Saleem Mandviwalla questioned the performance of the anomaly committees constituted by the FBR. The FBR has formed two anomaly committees to identify and remove the technical and legal anomalies in the Finance Bill 2025. Mandviwalla stated that the anomaly committees have failed to address the issues raised by the business community. The anomaly committees do not rectify errors in tax laws. The FBR chairman responded that this year we are bound due to IMF programme. The chairman of the committee also recommended deletion of Special Economic Zone (SEZ) Act, keeping in view government policy for not granting or extending tax exemptions. Some SEZs are fully operational and some are partially working. What is the fate of the SEZ after withdrawal of tax exemptions, he raised question. The government should terminate SEZ Act as it has become redundant in the absence of new tax exemptions. The FBR is not giving new exemptions and it would create problems for the new SEZs. Therefore, the law should be abolished. The government should refrain from giving fresh approvals to the SEZs, he added. On the proposal of the FBR for three years limit on audit of a taxpayer, Mandviwalla noted with concern that it is a general practice of the FBR to conduct multiple audits of taxpayers even in cases where simple explanation is required. A school of Islamabad has been audited by the FBR for the last three years, he added. Copyright Business Recorder, 2025
Business Recorder
16-06-2025
- Business
- Business Recorder
Finalisation of Finance Bill 2025: Senate panel asks FBR to stay out of provinces' domain
ISLAMABAD: The Senate Standing Committee on Finance and Revenue, Monday, warned the Federal Board of Revenue (FBR) to remain out of the domain of provinces during finalisation of the Finance Bill 2025-26. The meeting chaired by Senator Saleem Mandviwalla, held its fourth consecutive session in the Parliament House, to review the Finance Bill, which includes the Annual Budget Statement presented to the Upper House on June 10 under Article 73 of the Constitution. Mandviwalla warned that the FBR should not enter into the domain of provinces by including services in different provisions of the Finance Bill 2025-26. Sindh Revenue Board (SRB) has submitted different observations on Finance Bill 2025-26 where the FBR has illegally entered into the domain of services, he added. FBR Member Inland Revenue (Policy) Dr Najeeb Ahmad informed that the gradual withdrawal of sales tax exemption from erstwhile tribal areas in phase-wise manner has been agreed between the International Monetary Fund (IMF) and the Federal Board of Revenue (FBR). Budget FY2025-26: Sindh announces to expand sales tax to all major services The committee examined the tax exemption policy for FATA/ PATA, which will begin phasing out with a 10 per cent GST in the next fiscal year— gradually increasing to 18 per cent. The FBR Member said that this two-stage process has been agreed with the IMF for the withdrawal of sales tax exemption on erstwhile tribal areas. Senator Shibli Faraz asked what tangible benefits have tax exemptions brought to these regions. Where is the investment and employment, he asked. The finance minister is scheduled to brief the committee on this issue in the next session. The meeting was attended by Finance Minister Muhammad Aurangzeb, Senators Farooq Hamid Naek, Syed Shibli Faraz, Anusha Rehman Ahmad Khan, Mohsin Aziz, Ahmed Khan, Manzoor Ahmad, Mohammad Abdul Qadir, and senior officials from the FBR and other key departments. Opening the session, Chairman Mandviwalla lauded the 'diligence and active presence' of the federal minister for finance, stating: 'The minister's consistent participation and valuable input during these sessions reflect the government's commitment to transparent fiscal reforms.' Senator Anusha Rehman raised critical points about the regulation of e-commerce platforms emphasising not to burden unemployed individuals specifically (youth and women) making ends meet from home. Only register platforms doing business above Rs20million. On the proposed e-billing system, Senator Mohsin Aziz noted, 'Malaysia began phased implementation three years ago. We must assess our readiness.' Chairman Mandviwalla acknowledged the valuable suggestions of Senator Mohsin Aziz and Senator Anusha Rehman, stating to bring written proposals for phased implementation of e-billing. 'Talking will not suffice.' The committee also discussed the Islamabad Capital Territory (Tax on Service) 2001, Provisions of the Finance Bill, 2005. It was discussed that as per the IMF benchmark 'negative list of services' should also be developed. While discussing the Public Finance Management Act, 2019 a major disclosure rocked the session, revealing billions held and invested by public sector entities which are not transferred to central treasury but invested by these entities for profit. Senator Anusha Rehman condemned this, stating the government is borrowing its own money from banks and paying interest, while institutions profit off public funds. The committee directed the Establishment Division and Ministry of Finance to submit complete account details of all such institutions, lists of investments and profits earned, legal basis for withholding funds from the national treasury. The committee, while discussing the Federal Excise Provisions of Finance Bill, 2025, approved abolishing federal excise duty (FED) on first purchase of immovable property. The Senate Committee will reconvene Tuesday with the finance minister scheduled to address tax exemption policies and provide further clarity on institutional financial practices. Copyright Business Recorder, 2025
Business Recorder
16-06-2025
- Business
- Business Recorder
Senate panel clears new clause: Oversight Board to conduct audit firms' inspection
ISLAMABAD: The Senate Standing Committee of Finance on Monday approved a new clause for inspection of audit firms referred by the Federal Board of Revenue (FBR) under the Finance Bill 2025-26. The inspection of audit firms would be done by the Audit Oversight Board. The FBR and the Securities and Exchange Commission of Pakistan (SECP) strongly pleaded their case for introducing a new section in the sales tax law for inspection of audit firms by Audit Oversight Board. While review of the Finance Bill 2025-26 at the Senate Standing Committee of Finance on Monday, the SECP Commissioner, Securities Market Division and FBR Member Inland Revenue (Policy) defended the proposed section (58C- Inspection of audit firm) under the Finance Bill 2025-26. Both top officials of the SECP and the FBR clarified that the inspection would not be done by the tax officials, but the Audit Oversight Board would do the necessary job. The new legislation will empower Audit Oversight Board to monitor audit firms, involving Chief Commissioners in referring cases to the Oversight Board and ensuring prior notice is issued before inspections. Under proposed Section 58C in the Sales Tax Act, 'Where in case of a registered person, whose accounts are subject to audit under the Companies Act, 2017, Chief Commissioner Inland Revenue has reason to believe that the audited accounts do not reflect the true and fair view of sales and purchases and related sales tax liability, he or she may with the approval of the Board, refer the audit firm, who has issued audit certificate to that registered person for inspection to Audit Oversight Board', it added. Chairman of the committee Senator Saleem Mandviwalla read the objections raised by Institute of Chartered Accountants of Pakistan (ICAP) on the proposed section in the Sales Tax Act. Mandviwalla informed the committee that Auditor General of Pakistan (AGP) conducts audit of only 10 percent of the cases selected for audit. Similarly, audit firms also conduct audit of selected number of companies to check whether these companies are doing anything wrong in their audited accounts/financial records. Holding them responsible for all wrong doings by the companies would not be appropriate, he said. Senator Mandviwalla remarked: Audit firms, conduct only 10 percent of audits—this is unacceptable. The FBR officials explained that many audit firms are failing to meet international standards and merely 'stamp papers.' Copyright Business Recorder, 2025
