Latest news with #MinistryofFinance
Time of India
2 hours ago
- Business
- Time of India
Big embarrassment! Pakistan's crypto attempt to 'please' Donald Trump in a soup
The State Bank of Pakistan and the Ministry of Finance both clarified that cryptocurrency transactions remain prohibited in Pakistan. (AI image) Pakistan's scramble to please US President Donald Trump by establishing a strategic bitcoin reserve seems to have landed it in a soup! According to a report in the Dawn, senior officials in Islamabad have said that cryptocurrency remains banned in Pakistan. The State Bank of Pakistan and the Ministry of Finance both clarified that cryptocurrency transactions remain prohibited in Pakistan, with all such dealings considered unlawful under existing regulations. At a session of the National Assembly's Standing Committee on Finance and Revenue, Finance Secretary Imdadullah Bosal explained that despite the recent establishment of a Crypto Council by the Prime Minister Shehbaz Sharif through executive order to explore digital asset policies, the prohibition on cryptocurrency remains enforced under SBP and SECP guidelines. According to the Dawn report, Bosal said, "There will be a legal framework only when the government formally takes a decision, but the current legal status is that crypto is not a legal tender in Pakistan." He emphasised that formal legislation would be necessary to alter the current status. Also Read | Donald Trump's trade policy thrown into turmoil! Will countries like India, China be tempted to hold off tariff talks? Members of the committee voiced their bewilderment regarding the government's stance. Mirza Ikhtiar Baig raised concerns about the contradiction where citizens were being prompted to invest in cryptocurrency despite its legal prohibition, cautioning that such investments could result in severe repercussions for the investors. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Beyond Text Generation: An AI Tool That Helps You Write Better Grammarly Install Now Undo Pakistan's Strategic Bitcoin reserve plans The potentially embarrassing clarification by officials comes even as a big declaration about creating a government-supported Strategic Bitcoin Reserve has been made. Pakistan Crypto Council CEO Bilal Bin Saqib in a presentation at the Bitcoin Vegas 2025 Conference announced his country's intentions to establish a government-supported Strategic Bitcoin reserve. The initiative was described as "strategic" and was perceived as an effort to align with US President Donald Trump's pro-cryptocurrency position. "We want to thank the US because we are getting inspired from them," Bilal said after the announcement. Also Read | Target where it hurts: India wants Pakistan back on FATF 'grey list'; to oppose World Bank loans Sohail Jawad, the executive director of State Bank of Pakistan, informed the committee about the central bank's stance on cryptocurrencies. He confirmed that they had declared cryptocurrencies illegal in 2024, and emphasised that this position "was still intact", as reported by Dawn. He further mentioned that the Financial Monitoring Unit continues to forward cryptocurrency-related cases to law enforcement authorities. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Business Recorder
3 hours ago
- Business
- Business Recorder
SBP, Finance ministry inform NA body: ‘Cryptocurrency is not legal in Pakistan'
ISLAMABAD: The State Bank of Pakistan (SBP) and the Ministry of Finance on Thursday disclosed that the cryptocurrency is not legal in Pakistan and trading of cryptocurrencies is not permitted in the country. Both the SBP and the Finance Ministry stressed the need for a robust legal framework for trading of cryptocurrency in the country. 'Presently, cryptocurrency is banned in Pakistan,' they added. This was disclosed by officials of SBP and Finance Ministry during the meeting of National Assembly Standing Committee on Finance on Thursday. Pakistan establishes Digital Assets Authority to regulate crypto, blockchain According to the SBP officials, 'the SBP in 2018 issued instructions to the banks to prohibit trading of cryptocurrency in the country. Till now, it is not a legal tender. The SBP has given its recommendations to the Crypto Council.' The secretary Ministry of Finance informed the committee that 'very preliminary work has been done regarding cryptocurrency, but we need a proper legal framework in this regard.' MNA Mirza Ikhtiar Baig said there is a perception among the people that Pakistan has adopted the cryptocurrency and people have started making investment in the cryptocurrency. MNA Sharmila Faruqui questioned the recent policy shift prioritising digital currencies without addressing the associated regulatory deficiencies. The secretary Ministry of Finance informed the committee that Pakistan has not shifted its policy stance towards virtual assets. Rather, it is considering virtual assets with cautious and forward-looking approach for an informed decision on prospects of regulatory enablement. Towards this end, Pakistan Crypto Council (PCC) has been constituted with representation from the SBP, the Securities and Exchange Commission of Pakistan (SECP), and the Ministry of Finance (MoF). Under the umbrella of PCC, stakeholders' discussions on the feasibility of regulatory framework for crypto currencies and virtual assets are under way. The PCC is also exploring the beneficial use-cases to support responsible innovation in this area. This initiative aligns with FATF Recommendation 15, which mandates regulation and supervision of Virtual Asset Service Providers (VASPs). Given the growing interest in crypto-related activities, it is critical for Pakistan to build necessary legal and regulatory capacity to remain FATF-compliant before embarking on this journey. The SBP and SECP have advised their regulated entities to refrain from processing, using, trading, holding, transferring value, promoting and investing in virtual currencies/tokens. Further, the regulated entities were advised not to facilitate their customers/account holders to transact in virtual currencies/ICO tokens. Any transaction in this regard shall immediately be reported to Financial Monitoring Unit (FMU) as a suspicious transaction. These directives were issued due to the risks including high price volatility, closure of virtual currency exchanges and possibility of wallets hacking as well as risk of capital flight and financial instability. Under the direction of the General Committee, a National Working Group, led by the FIA was constituted and they are currently working in this regard. Both the Crypto Council and the Working Group are actively engaged in developing policy recommendations for legal and regulatory framework for Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs). This process includes a thorough evaluation of the associated money laundering, terrorist financing (MUTE), and broader systemic risks. Given that virtual assets remain a rapidly evolving and inherently volatile domain, any potential future policy shift will be approached with the utmost caution. A structured and risk-based approach aligned with the 'Pakistan First' principle will guide any decision-making, ensuring that national financial security and regulatory readiness remain a priority. A multi-stakeholder consultative approach is being employed to ensure comprehensive risk management and policy cohesion. Recently, the government has formed PCC with the objective to have stakeholders' consultation on the feasibility of promoting responsible Innovation In digital assets under an appropriate regulatory framework. GoP has also hired technical experts for the PCC. The objective is to initiate a stakeholders' dialogue with crypto industry leaders to enhance the mutual understanding about the nature of the crypto/virtual assets, their business models, underlying technologies, and associated risks. Presently, Pakistan's legal framework on Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) conforms to the international standards, particularly the Financial Action Task Force (FATF) Recommendations. Furthermore, Pakistan continues to engage with international partners i.e. FATF, APG and IMF to further strengthen its AML/CFT regime and ensure compliance and sustainability with global AMUCFT standards. Copyright Business Recorder, 2025
Business Recorder
8 hours ago
- Business
- Business Recorder
Budget: time for respite & reform
Pakistan has shown signs of overall stabilisation, supported by improved fiscal performance, strengthened external account, and receding inflation. Revenue Mobilization and restrained current spending have contributed to a narrower fiscal deficit and a surplus primary balance. The current account registered a higher surplus, driven by remittances and export growth, while reserves have improved, and the exchange rate remains stable, aligned with the market. Inflation has reduced to its lowest level, creating space for a more supportive monetary policy in upcoming months. Although overall industrial activity remained weak. However, automobiles and export-oriented sub-sectors showed an impressive performance. Social protection and climate finance initiatives are progressing, reinforcing the path toward inclusive and sustainable growth. Economic Update & Outlook- April – 2025, Government of Pakistan, Ministry of Finance The budget for fiscal year (FY) 2025–26, to be presented on June 10, 2025, is set against a backdrop of critical reforms, macroeconomic recovery, and renewed commitments to fiscal discipline. The International Monetary Fund (IMF), concluding its staff visit of Islamabad, headed by Nathan Porter, has provided a direction for budget formulation and broader economic restructuring. Engaged in serious dialogue and detailed consultations with Pakistan's federal and provincial authorities, the IMF mission outlined contours of the new fiscal framework, macroeconomic objectives, and structural reforms. The mission acknowledged satisfactory progress and laid out stringent conditions under the US$ 7 billion 37-month Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF) programmes. IMF's EFF programme's primary objective is to achieve a primary surplus of 1.6 percent of GDP in FY2026 through robust revenue generation and prioritized expenditure, urging on enhancement in tax compliance, broadening of tax base and rationalization of fiscal spending. The strategic framework agreed upon during this mission now defines the configurations of Pakistan's forthcoming budget, making it a cornerstone of economic recovery and international confidence. IMF's recommendations centered on revenue generation without undermining inclusive growth. Emphasis on expanding the tax base through policy and administrative measures echoed the need to transition from narrow, burdensome taxation to a more equitable and growth-oriented regime. The Pakistani authorities were advised to limit untargeted subsidies, curtail wasteful expenditures, and ensure targeted social protection. The IMF reinforced the importance of sound macroeconomic policies including maintaining a tight and data-driven monetary stance. State Bank of Pakistan's (SBP's) objective to keep inflation at a minimum level was endorsed, and a flexible exchange rate regime was deemed critical to managing external shocks and rebuilding reserve buffers. Focus on energy sector reform also featured prominently, particularly addressing ineptitudes in tariff structures, reducing system losses, and ensuring cost-recovery pricing. The fiscal framework was required not only to meet debt sustainability metrics but also to enable pro-investment policies that promote long-term economic stability and job creation. IMF's reform recommendations aligned with Pakistan's economic data reveals both progress and persisting structural flaws. April 2025 Economic Update issued by the Ministry of Finance offers insight into these dynamics. The macroeconomic indicators have shown signs of recovery. Improved revenue performance, moderated inflation, and current account surplus suggest that the economy is gradually transitioning from a crisis management phase to a recovery path. Fiscal deficit for Jul-Feb FY2025 declined to 2.2 percent of GDP, while primary surplus stood at 3 percent of GDP, indicating prudent fiscal management. Revenue receipts grew by 43.3 percent year-on-year, with a substantial 73 percent surge in non-tax revenues. The Federal Board of Revenue (FBR) collected, after blocking refunds and taking advances not yet due, Rs. 8.45 trillion during Jul-Mar FY2025, reflecting a 25.9 percent increase (sic) as compared to corresponding period of last year. These improvements offer fiscal space that can be strategically directed towards productive expenditure. The monetary side remains cautiously supportive. Inflation, which stood at 20.7 percent in March 2024, declined sharply to 0.7 percent year-on-year by March 2025, a multi-decade low. Decline in inflation provides policy room for easing monetary conditions, potentially reducing interest burden and supporting credit flows to the private sector. SBP's foreign exchange reserves reached US$10.6 billion as of April 2025, contributing to total reserves of US$15.7 billion. The current account posted a US$1.9 billion surplus, supported by export recovery and a record US$28 billion in remittances. These figures highlight a restored balance of payments discipline and reduced reliance on external borrowing. The industrial sector presents a mixed picture. Large-scale manufacturing (LSM) output remained under pressure with a decline of 1.9 percent in Jul-Feb FY2025. However, segments such as textiles, apparel, and petroleum products showed resilience. The automobile sector registered significant growth in production, indicating that selective industrial recovery is underway. Cement exports grew by 28.1 percent despite weak domestic demand. These sectoral trends underline the importance of targeted incentives and consistent energy supply to stimulate broader industrial revival. The agricultural sector, often overlooked in fiscal prioritization, displayed its strength during the Rabi season. Wheat was cultivated on over 22 million acres with an estimated output of 27.9 million tonnes. Agricultural credit disbursement rose by 15.4 percent while imports of agricultural machinery surged by 40.5 percent. The above trends in agricultural sector reflect early success in mechanization and access to input, supporting the argument for increased public investment in rural productivity. Data from the update supports IMF's call to expand the agricultural tax net, which remains a politically sensitive but economically necessary reform. The external sector's performance supports confidence. Exports rose 7.7 percent to US$24.7 billion, led by garments and textiles, while IT exports surged by 23.7 percent to US$2.8 billion. Remittance inflows showed robust growth from key corridors such as Saudi Arabia and the United Arab Emirates (UAE). Foreign direct investment (FDI) increased by 14 percent, reaching US$1.6 billion, primarily in financial services, energy, oil and gas. Stock exchange index crossed 117,000 points in March, driven by positive investor sentiment. These trends reflect growing market confidence, aided by macroeconomic stabilisation and policy predictability. IMF's emphasis on rebuilding investor confidence is thus partially validated by these developments. IMF's concern about energy sector inefficiencies is well-placed. The high cost of power generation, transmission losses, and circular debt accumulation have long undermined competitiveness. The budget must respond with a roadmap for tariff rationalization, elimination of cross-subsidies, and improved governance of distribution companies. Power sector reforms must go beyond pricing to address theft, billing inefficiencies, and lack of investment in renewable energy. IMF's emphasis for cost recovery-based pricing and legislative changes for levies must be operationalized in this budget cycle. Resilience of the social protection system was also recognized. The government spent Rs 347 billion under Benazir Income Support Programme (BISP) during Jul-Feb FY2025, representing an 82.6 percent increase over the previous year reflecting the commitment to shielding vulnerable households, in line with IMF's directions on protecting priority expenditures. Continuity of inflation-linked transfers under the Kafaalat programme must be embedded in the budgetary framework. Integration of digital tools in welfare delivery should be expanded to improve targeting and transparency. The budget must now transform these policy directions and macroeconomic signals into actionable proposals. Priority should be broadening tax base through digitization and enforcement. The FBR should diligently enforce digital invoicing, inter-agency data sharing, and AI-based risk profiling to enhance compliance. The large undocumented segments in retail, real estate, and agriculture must be brought under the tax net. Simplification of tax procedures, reduction in litigation, and automation of refunds will improve compliance and reduce resistance. The second priority should be providing relief to the salaried class. Inflation has eroded real incomes, and relief must be extended through upward revision of tax slabs and introduction of indexation. The withholding and advance tax mechanisms must be streamlined to prevent excess collection and delays in refund. The burden of indirect taxes such as General Sales Tax (GST) disproportionately affects fixed-income households. Reduction of sales tax rates, particularly on essential items and utilities, must be considered. The fiscal space generated by non-tax revenues and improved FBR performance offers room for targeted tax relief. The third priority is energy sector reform. The budget should announce a timeline for tariff rebasing, reduction of subsidies, and modernization of grid infrastructure. Investment in smart metering and solar integration must be scaled up to reduce technical losses. The use of petroleum levy must be linked to infrastructure investment in the energy sector rather than general revenue needs. Structural bottlenecks in the energy sector directly affect industry competitiveness and must be addressed holistically. The fourth priority is stimulating GDP growth through public development spending and private investment. The Public Sector Development Programme must prioritize high-yield projects with employment impact, especially in transport, housing, and rural connectivity. Private sector participation in infrastructure through public-private partnerships should be incentivized via fiscal guarantees and tax relief. The budget must facilitate credit to small and medium enterprises (SMEs) through interest subvention and guarantee schemes. The government should allocate funds for technology parks, export clusters, and skill training to support job creation and competitiveness. The fifth priority is building external resilience. The budget must aim to support export diversification through sector-specific incentives and simplification of export procedures. Foreign exchange reserves should be improved by retaining remittance inflows through formal channels via attractive saving instruments. The incentives for FDI should include tax holidays, contract enforcement guarantees, and repatriation ease. The Board of Investment must be allocated resources for aggressive outreach and facilitation. The sixth priority must be institutional reform. The budget must include allocations for digitization of land records, integration of National Database & Registration Authority (NADRA) with economic databases and strengthening of regulatory bodies. The anti-corruption agencies must be funded to improve accountability in public spending. IMF's insistence for governance diagnostics must translate into budgetary measures that strengthen institutions and restore public trust. Budget for FY2025–26 should not be merely a fiscal document, but a test of political will and administrative capability. IMF's confidence, validated by completion of the first EFF review and RSF approval, presents a unique window for reforms. The economic data shows promise, but the transition from stabilisation to growth requires sustained effort. The public expects meaningful relief, the markets expect clarity, and the international community expects reform. The budget must deliver all three. The government has an opportunity to use this budget as a platform for transformation. Clarity of priorities, alignment with global institutions, and responsiveness to domestic needs can together chart a sustainable economic path. The time for incrementalism is over. The moment calls for ambition, discipline, and action. The future of Pakistan's economy may well be written in the pages of the FY2025–26 budget. (Huzaima Bukhari & Dr Ikramul Haq, lawyers and partners of Huzaima & Ikram, are Adjunct Faculty at Lahore University of Management Sciences (LUMS), members Advisory Board and Visiting Senior Fellows of Pakistan Institute of Development Economics (PIDE) and Abdul Rauf Shakoori is a corporate lawyer) Copyright Business Recorder, 2025
Business Recorder
8 hours ago
- Business
- Business Recorder
SBP, Ministry inform NA body: ‘Cryptocurrency is not legal in country'
ISLAMABAD: The State Bank of Pakistan (SBP) and the Ministry of Finance, Thursday, disclosed that the cryptocurrency is not legal in Pakistan and trading of cryptocurrencies is not permitted in the country. Both the SBP and the Finance Ministry stressed the need for a robust legal framework for trading of cryptocurrency in the country. 'Presently, cryptocurrency is banned in Pakistan,' they added. This was disclosed by officials of SBP and Finance Ministry during the meeting of National Assembly Standing Committee on Finance on Thursday. Pakistan establishes Digital Assets Authority to regulate crypto, blockchain According to the SBP officials, 'the SBP in 2018 issued instructions to the banks to prohibit trading of cryptocurrency in the country. Till now, it is not a legal tender. The SBP has given its recommendations to the Crypto Council.' The secretary Ministry of Finance informed the committee that 'very preliminary work has been done regarding cryptocurrency, but we need a proper legal framework in this regard.' MNA Mirza Ikhtiar Baig said there is a perception among the people that Pakistan has adopted the cryptocurrency and people have started making investment in the cryptocurrency. MNA Sharmila Faruqui questioned the recent policy shift prioritising digital currencies without addressing the associated regulatory deficiencies. The secretary Ministry of Finance informed the committee that Pakistan has not shifted its policy stance towards virtual assets. Rather, it is considering virtual assets with cautious and forward-looking approach for an informed decision on prospects of regulatory enablement. Towards this end, Pakistan Crypto Council (PCC) has been constituted with representation from the SBP, the Securities and Exchange Commission of Pakistan (SECP), and the Ministry of Finance (MoF). Under the umbrella of PCC, stakeholders' discussions on the feasibility of regulatory framework for crypto currencies and virtual assets are under way. The PCC is also exploring the beneficial use-cases to support responsible innovation in this area. This initiative aligns with FATF Recommendation 15, which mandates regulation and supervision of Virtual Asset Service Providers (VASPs). Given the growing interest in crypto-related activities, it is critical for Pakistan to build necessary legal and regulatory capacity to remain FATF-compliant before embarking on this journey. The SBP and SECP have advised their regulated entities to refrain from processing, using, trading, holding, transferring value, promoting and investing in virtual currencies/tokens. Further, the regulated entities were advised not to facilitate their customers/account holders to transact in virtual currencies/ICO tokens. Any transaction in this regard shall immediately be reported to Financial Monitoring Unit (FMU) as a suspicious transaction. These directives were issued due to the risks including high price volatility, closure of virtual currency exchanges and possibility of wallets hacking as well as risk of capital flight and financial instability. Under the direction of the General Committee, a National Working Group, led by the FIA was constituted and they are currently working in this regard. Both the Crypto Council and the Working Group are actively engaged in developing policy recommendations for legal and regulatory framework for Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs). This process includes a thorough evaluation of the associated money laundering, terrorist financing (MUTE), and broader systemic risks. Given that virtual assets remain a rapidly evolving and inherently volatile domain, any potential future policy shift will be approached with the utmost caution. A structured and risk-based approach aligned with the 'Pakistan First' principle will guide any decision-making, ensuring that national financial security and regulatory readiness remain a priority. A multi-stakeholder consultative approach is being employed to ensure comprehensive risk management and policy cohesion. Recently, the government has formed PCC with the objective to have stakeholders' consultation on the feasibility of promoting responsible Innovation In digital assets under an appropriate regulatory framework. GoP has also hired technical experts for the PCC. The objective is to initiate a stakeholders' dialogue with crypto industry leaders to enhance the mutual understanding about the nature of the crypto/virtual assets, their business models, underlying technologies, and associated risks. Presently, Pakistan's legal framework on Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) conforms to the international standards, particularly the Financial Action Task Force (FATF) Recommendations. Furthermore, Pakistan continues to engage with international partners i.e. FATF, APG and IMF to further strengthen its AML/CFT regime and ensure compliance and sustainability with global AMUCFT standards. Copyright Business Recorder, 2025
The Star
10 hours ago
- Business
- The Star
Israel cuts growth forecast due to conflict expansion, U.S. tariff policies
JERUSALEM, May 29 (Xinhua) -- The Israeli Ministry of Finance on Thursday night lowered its growth forecast for 2025 to 3.6 percent, from the 4.3 percent predicted in January. The ministry explained that the baseline scenario of the previous forecast assumed a reduction in combat and military recruitment in the current year, but this has not materialized so far. The revised scenario anticipates an expanded call-up of reserve forces for combat operations in the second quarter of 2025, followed by a gradual reduction in reserve recruitment beginning only in the third quarter. The new forecast also takes into account the impact of the U.S. new import tax policies and recent official data on the activity of the Israeli economy. The Israeli ministry assumes that the U.S. tariffs rise will lead to a decrease of about two percent in global trade in 2025 and 2026. It also revised down the Israeli economy's growth forecast for 2026, from 5.4 to 4.4 percent. Gad Lior, a senior analyst at the Yedioth Ahronoth newspaper, told Xinhua that the reduction in the growth forecast and the recent larger-than-expected rise in Israel's inflation are expected to lead to a decline in economic activity and a hit to tax revenues, alongside an increase in government spending.
