Latest news with #MirzaIkhtiarBaig
Express Tribune
07-08-2025
- Business
- Express Tribune
Govt admits inflation outpaced wage growth
The government on Thursday admitted that inflation had significantly eroded the purchasing power of the average Pakistani. Minister of State for Finance and Revenue Bilal Azhar Kayani told the National Assembly that the government has adopted a multi-dimensional strategy to curb inflation, restore real wages to 2017 levels, and ease the financial burden on low-income citizens through targeted relief measures. Responding to a question raised by Dr Mahreen Razzaq Bhutto, he said, "We understand that this is one of the most pressing issues for citizens and a fundamental benchmark for assessing our economic policies." According to the written reply submitted to the House, the government stated that inflation had dropped substantially from 23.4% in FY2024 to 4.5% in FY2025. Inflation for July FY2026 stood at 4.1%, compared to 11.1% during the same month last year. The reply outlined key budgetary measures taken at the federal level, including a 10% ad-hoc salary increase for civil servants, a 7% pension rise, no new income taxes, and targeted subsidies for utility bills and the Benazir Income Support Programme (BISP), which has been expanded to Rs716 billion. The government also highlighted its efforts to improve labour productivity through skill development, vocational training, digitization, entrepreneurship promotion, investment in capital goods, and formalization of labor. "Formal firms tend to pay higher and more regular wages," the reply noted, adding that stronger employment elasticity tied to GDP growth would also support wage recovery. In her remarks, Dr Bhutto appreciated the remedial measures but questioned their practical impact on the ground. "Despite these steps, I see no meaningful improvement in real incomes. If the government claims real wages are improving, in which sectors is that visible? Eleven crore Pakistanis still live below the poverty line," she stated. She also criticized reliance on consumption-based taxes like fuel levies, arguing that such measures disproportionately affect the poorest citizens. Kayani, in his response, emphasized that inflation control is only one part of the broader strategy. "Real purchasing power improves when both inflation is contained and employment opportunities expand. With a stable macroeconomic environment, we've regained international confidencerating agencies like Fitch, S&P, and Moody's have upgraded our outlook," he said. He further noted that the policy rate has declined from 22% as inflation came under control, enabling a revival in business activity. He pointed out that one crore families benefit from BISP and that those earning up to Rs 600,000 annually are exempt from income tax, easing the burden on low-income groups. Other members, including Mirza Ikhtiar Baig and Sahibzada Sibqhatullah, also questioned the government's plans regarding industrial competitiveness, utility store layoffs, and the long-standing issue of implementing minimum wage laws. Mirza Ikhtiar Baig urged the government to fulfill its promise of reducing electricity rates by 8 to 9 cents per unit to support textile exporters and revive industrial operations in Faisalabad and other hubs.
Express Tribune
31-05-2025
- Business
- Express Tribune
Tax shortfall exceeds Rs1 trillion
The salaried class was the most affected segment that paid a record Rs437 billion in taxes till April, which were 52%, or Rs150 billion, more than last year. photo: FILE Listen to article The shortfall in tax collection widened to an alarmingly high level of Rs1.03 trillion in just 11 months of the current fiscal year despite imposing record new taxes in the budget, taking advances, withdrawing money from people's bank accounts and blocking refunds of companies and individuals. Only in May, the Federal Board of Revenue (FBR) faced a mammoth shortfall of Rs205 billion despite paying 5.3% less refunds compared to last year. The embarrassing outcome brings into question the government's strategy of collecting taxes from the already burdened classes and sectors of the economy. One of the reasons for missing the monthly target by a wide margin is no new recovery of arrears in litigation cases, which both the government and the FBR had promised to recover through expeditious settlement of the cases. The FBR provisionally collected Rs10.21 trillion from July through May of the current fiscal year, falling short of the target by Rs1.03 trillion, according to its statistics. The collection was still around 28%, or Rs2.2 trillion, higher than the previous fiscal year, but not enough to stay on track. The key reasons behind the higher collection compared to last year were the imposition of more taxes in budget, particularly on the salaried class and corporate sector, and expansion of sales tax net to many untaxed areas. Yet the FBR missed the target by Rs1.03 trillion. The FBR did not respond to a request for comment till the filing of the story. The shortfall is far more than what the government committed in talks with the International Monetary Fund (IMF) in March this year, when the lender lowered the target by Rs640 billion for the full fiscal year. In a meeting of the National Assembly Standing Committee on Finance on Thursday, PPP MNA Mirza Ikhtiar Baig said that the FBR illegally recovered money from multiple bank accounts in Karachi to meet its targets. Moreover, Utopia Industry, one of the top 12 exporters, is struggling to get Rs3 billion in refunds, a situation many industries are facing despite official claims of clearing refunds within 72 hours. Details showed that in May the FBR paid Rs2 billion, or 5.3%, less refunds compared to the same month of last year. Total refund payments in 11 months reached hardly Rs458 billion, higher by just 1.1% and not in commensuration with the 28% rise in tax collection. The salaried class was the most affected segment that paid a record Rs437 billion in taxes till April, which were 52%, or Rs150 billion, more than last year. For May, the FBR's tax target was Rs1.1 trillion. However, despite taking advances and slowing refunds, it could collect Rs907 billion. The monthly collection was Rs271 billion, or 43%, more than last year, which a senior FBR official said was commendable in the current circumstances. The IMF forced the country to impose new taxes, primarily burdening the salaried class and levying taxes on nearly all consumable goods, including medical tests, stationery, vegetables and children's milk. For the July-May period, the FBR missed its targets for sales tax, federal excise duty (FED) and customs duty but again exceeded the income tax target on the back of overburdening the salaried class. Income tax collection amounted to Rs4.9 trillion during the first 11 months of the current fiscal year, higher by Rs296 billion from the target. It was also Rs1.1 trillion more than last year. The burden was shared by the salaried class and the corporate sector as retailers and landlords remained under-taxed. Sales tax collection stood at Rs3.5 trillion, a whopping Rs900 billion less than the target of Rs4.4 trillion. Sales tax remained the most difficult area for the FBR and one of the reasons for the low collection was less-than-estimated growth in large industries. The government had immensely increased the sales tax burden in the budget. The collection was Rs755 billion higher than last year. The FBR collected Rs672 billion in FED, which was Rs166 billion less than the target. However, it was Rs180 billion higher than last year. The government did not spare homes, lubricants, fruit juices, cement, sugar, etc from FED in the last budget. Yet it failed to meet the target. Customs duty collection stood at Rs1.16 trillion, below target by Rs265 billion. The collection was hit by lower-than-projected import volumes. It was also marred by the manipulation of goods declaration forms by importers in connivance with the corrupt elements. The amount was Rs172 billion higher than last year.
Business Recorder
30-05-2025
- 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
30-05-2025
- 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
Business Recorder
14-05-2025
- Business
- Business Recorder
SECP tells Senate panel: CSR compliance for listed cos a must
ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP), Tuesday, informed the Senate Standing Committee on Finance that listed companies are required to duly comply with the corporate social responsibility (CSR) requirements in the country. The SECP officials informed Senate Standing Committee on Finance Tuesday that the SECP has given responsibility to the Boards of the listed companies to deal with Environmental, Social, and Governance (ESG) considerations and Gender Equality and Diversity and Inclusion (DE&I). Senate Standing Committee on Finance, Tuesday, also sought comments of NGOs on 'The Corporate Social Responsibility Bill 2025'to provide for the corporate social responsibility for companies, banks, and SOEs (State-owned enterprises) with matters arising out of or connected therewith. The sub-committee, headed by Dr Mirza Ikhtiar Baig, MNA, reviewed the private members bill introduced by Dr Nafisa Shah, MNA, by inviting experts and stakeholders. The SECP officials informed about the CSR reforms undertaken by the SECP including CSR reporting guidelines, integration of CSR into Code of Corporate Governance as well as capacity building and awareness programs to educate companies on CSR. The SECP officials added that they aim to build a strong and growing corporate sector that is attractive to both domestic and foreign investors, ensuring economic stability. The committee assessed the implications and potential impact of the legislation based on their findings. MNA Ali Sarfraz recommended constitution of a separate government department for regulating/spending the funding of the CSR. Till a federal department is not constituted, there are apprehensions of wastage of CRS funds. The government needs to issue guidelines after collection of CRS funds. Among stakeholders, CEO of a company disclosed that it is a wrong impression that the corporate sector is earning huge profits. All chambers are spending reasonable amount of funds on CSR activities. The family NGOs are reregistered as per government rules/regulations. Through family NGOs, funds are allocated to poor segments of the society. Under the proposed law, every company excluding the non-profit, or charitable companies, incorporated under the provisions of the Companies Act, with a turnover of more than Rs1 billion shall earmark not less than one percent of its net profit which shall be spent for activities or projects relating to corporate social responsibility as provided in the Schedule under the provisions of this Act. Provided that companies with less turnover shall follow the guidelines issued by the SECP. The Board of Directors of the company shall ensure that the company shall spend the amount earmarked under sub-section (l), of this section in pursuance of its Corporate Social Responsibility Policy. Copyright Business Recorder, 2025
