Latest news with #MiftahIsmail
Express Tribune
15-05-2025
- Business
- Express Tribune
IBA Karachi hosts pre-budget seminar
IBA Karachi hosted a pre-budget seminar, "Pakistan Economic Outlook for Budget 2025-26", critically examining Pakistan's economic landscape and the upcoming Federal Budget 2025-26 at the main campus, organised by the Centre for Business and Economics Research (CBER) at School of Economics and Social Sciences (SESS). Given the targets set, Former Finance Minister Dr Miftah Ismail highlighted the challenge the government may face in meeting the revenue targets in the upcoming fiscal year. He emphasised that Pakistan already has higher tax rates than its regional counterparts.
Express Tribune
17-04-2025
- Business
- Express Tribune
No petrol relief
Listen to article Despite a steep fall in international oil prices, there has been no relief for the masses in the country from the unbearably high prices of petroleum products. Local media was abuzz with reports of "good news coming up" in the form of a significant cut – of around Rs10 per litre – in the rate of petrol. But the official announcement after the fortnightly government review brought nothing but disappointment, as no relief was passed on to the consumers and the prices of all petroleum products were kept unchanged. Rather, the federal cabinet approved an amendment to the Petroleum Products (Petroleum Levy) Ordinance, 1961, effectively removing any upper limit previously imposed on the levy. In March and April, the government has already raised the levy from Rs60 to Rs80, with former finance minister Miftah Ismail calling it a "mini-budget that earned the government Rs34 billion each month in tax revenue". The justification that the Prime Minister has come up with on denying petrol price relief to the masses is nothing but bogus: that the money so saved would fund development in Balochistan, precisely to upgrade N-25 Highway that links Chaman to Karachi via Quetta, Kalat and Khuzdar, and to complete Kachhi Canal Phase-2 to irrigate land in Balochistan. This justification is rather misleading given that the federal government could have conveniently fund the said projects from the PSDP whose Rs1,100 billion allocation has only been utilised by less than 30 per cent in the first eight months of the ongoing fiscal year. Moreover, Bolochistan itself enjoy a surplus of approximately Rs450 billion. What appears to be the case is that the federal government is in for a shortfall in its revenue collection for the ongoing fiscal year, and is in fact trying to cut it to as low as possible by employing discreet revenue enhancing measures. Let's keep an eye on whether or not the two mentioned Balochistan projects see the light of day within two years. Well, Miftah believes they will not!
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Express Tribune
16-04-2025
- Business
- Express Tribune
Miftah Ismail slams govt's Rs20 petroleum levy hike, calls it a 'mini-budget'
Listen to article Former finance minister Miftah Ismail called out the ruling coalition for back-to-back petroleum levy hikes, blaming the government for burdening citizens with a 'mini-budget' and failing to pass on the benefit of falling global oil prices. He accused the government of abandoning basic economic practice, saying fuel prices should reflect global market changes — increasing when international rates rise and decreasing when they fall — a balance he claims is no longer being maintained. In a strongly worded post on X, Ismail revealed that the government raised the petroleum levy by Rs10 per litre in March and another Rs10 in April, bringing the total levy to Rs80 per litre. He estimated the move adds Rs34 billion in monthly tax revenue. 'In these two months, the government has raised taxes by Rs34 billion per month instead of giving the benefit to the people,' he stated, arguing that petrol prices should drop when international oil prices fall. Ismail dismissed official claims that the levy hike would fund development in Balochistan. 'Money is fungible… No new projects for Balochistan have been approved,' he said, alleging that the funds would go to general government expenditures instead. He also accused the government of making commitments to the International Monetary Fund (IMF) to maintain high fuel prices and continue increasing levies. 'This is a mini-budget,' he declared. The criticism follows Prime Minister Shehbaz Sharif's announcement that savings from falling oil prices would be redirected toward dualising the N-25 Highway (Chaman–Quetta–Kalat–Khuzdar–Karachi route) and completing Phase 2 of the Kachhi Canal project to irrigate land in Balochistan.
Express Tribune
20-03-2025
- Business
- Express Tribune
Miftah Ismail slams govt over soaring sugar, electricity prices
Listen to article Former finance minister and economist Miftah Ismail on Thursday took aim at the federal government for allowing electricity and sugar prices to spiral, accusing it of prioritising profits over public welfare. Speaking at a press conference in Karachi, he said the current administration had enabled sugar mill owners to benefit from export permissions while everyday Pakistanis bore the brunt of skyrocketing prices. 'Six months ago, the government permitted the export of 5 to 6 million tonnes of sugar, so that Sindh and Punjab's sugar mill owners can get dollars and relief,' he stated. Drawing a comparison with past decisions, Ismail reminded the Pakistan Muslim League-Nawaz (PML-N) of its earlier criticism of sugar exports under former premier Imran Khan. 'I ask Shehbaz Sharif sahab, who influenced your decision to export sugar?' he asked, highlighting the political hypocrisy. 'Because you had promised — when sugar was Rs80 to Rs90 — that you won't let it exceed Rs140,' he added. 'Exports started when sugar was at Rs115 — now it was at Rs175.' He further questioned the logic behind recent policy decisions: 'Pakistani people should know why is sugar expensive, why are you cutting solar energy bills, and why are you making people's electricity expensive?' Despite several attempts by the government to maintain retail prices at Rs130 per kg, sugar now sells for over Rs180 in many markets, defying the rates set by the prime minister. The Competition Commission of Pakistan (CCP) has also stepped in, warning sugar mills of consequences for price manipulation. Meanwhile, sugar consumption continues to rise, expected to hit 6.7 million tonnes in 2024-25, driven by population growth and demand from the food industry. Pakistan produced more than 6.84 million tonnes last season, with further growth anticipated. Ismail also criticised the country's high electricity tariffs, arguing they deter investors. 'Bangladesh, India, Sri Lanka, Indonesia, Thailand, Cambodia, South Africa, Kenya — these are just some of the countries that may have surpassed us and when investment doesn't come in Pakistan, it goes to these countries,' he said. 'Pakistan's electricity prices, however, were more expensive than these countries,' he noted. 'So, what is so special about your electricity that you are selling it at such an expensive rate? What is so special about your gas that you're selling it at such an expensive rate?' He concluded with a pointed jab at the government's economic direction: 'There's no reason apart from the fact that your policies are unsuccessful, full of U-turns and are based on greed.'
Express Tribune
09-02-2025
- Business
- Express Tribune
Tax reforms: a re-election strategy?
Listen to article KARACHI: Yes, although not fully implemented except during the tenure of former Finance Minister Miftah Ismail, there are strong reasons to believe that reducing taxes on salaried individuals could generate enough political support to tilt election outcomes in favour of policymakers. Ultimately, isn't that what they aim for? Last week, India's Finance Minister, Nirmala Sitharaman, unveiled the country's budget under pressure from politicians and investors to sustain growth. A major highlight that won public support for the Bharatiya Janata Party (BJP) was the significant reduction in tax rates for the middle class, with increased exemption limits for lower- and middle-income earners. In contrast, Pakistan, under the pretext of International Monetary Fund (IMF) policies, continues to put extraordinary burdens on its shrinking salaried, lower-to-middle urban class. This segment is unfairly penalised for being part of the formal sector, while the government attempts to recover losses from colossal economic mismanagement, weak enforcement, and the protection of traders, real estate, and agriculture as untouchable sectors. Efforts to tax traders and agriculture have so far failed despite some superficial progress, while the real estate sector remains a mixed bag of benefits and drawbacks. To compare, someone earning $2,000 per month (Rs550,000) in Pakistan faces a 35% marginal tax rate, whereas their counterparts in India, the US, and Bangladesh pay 25%, 22%, and 20%, respectively. Similarly, a person earning $3,000 per month (Rs800,000) pays 37% in Pakistan, compared to 25%, 22%, and 25% in those countries. Progressive economies like Vietnam and Hong Kong have even lower tax rates. Without delving into the debate of what taxpayers are meant to receive in returnsuch as free education, healthcare, security, and infrastructureit is reasonable to tax the salaried class. In the US, nearly 50% of federal revenue comes from individual taxes (direct taxes). This is despite lower tax rates. Ironically, Pakistan's middle-to-upper-class incomes would be considered minimum wage in certain US states and by some employers. The need is for a fair taxation system. Pakistan has overly relied on indirect taxes like sales tax, customs duties, and excise taxes while ignoring the vast black economy that thrives in agriculture, trade, wholesale, retail, blue-collar services, and real estate. The high cash circulation in these sectors is proof of widespread tax evasion. This imbalance significantly hinders Pakistan's progress. By 2047, on its 100th birthday, Pakistan will be the world's third most populous country. With no real efforts toward population control, the country will need a robust private sector to create enough jobs for its youth. Overburdening formal industries, services, and corporate employees with excessive taxes while neglecting the real economic challenges is not a sustainable strategy. If this year's budget provides a clear direction to reduce corporate and salary taxes by 1% annually for the next nine years, and the government remains committed to this plan, it would boost purchasing power, leading to increased domestic consumption and GDP growth. Simultaneously, this would pressure the government to generate 20-30% annual revenue growth from traders, wholesalers, retailers, and real estate, ensuring their contribution aligns with a fair share of GDP. Adopting such a tax policy could drastically shift electoral odds in favour of the ruling party. Policymakers seek re-electionso why not earn it? Politicians must integrate the urban salaried class into their policies, as this segment will dominate in a few decades due to declining agricultural employment. The World Bank has already stated that with Pakistan's dismal investment-to-GDP ratio, the economy cannot grow beyond 3-4%. A new perspective is needed. Last year alone, losses from PESCO, LESCO, QESCO, and SEPCO amounted to Rs96 billion, Rs48 billion, Rs38 billion, and Rs29 billion, respectively. These four companies contributed Rs210 billion in losses, while Rs368 billion was collected in salary taxes. If these entities had been breaking even, tax rates could have been slashed in half. How naive of us to wish for such reforms. THE WRITER IS AN INDEPENDENT ECONOMIC ANALYST
