Latest news with #Rs1.03
Business Recorder
a day ago
- Business
- Business Recorder
Energy budget: revenue first, reform later
The federal budget for FY26 offers few surprises on the energy front—yet between the lines lies a tale of strategic juggling, revenue prioritisation, and a dash of reform signalling. The biggest headline? Taxing solar. An 18 percent sales tax on imported solar panels is the most consequential step. Imports of solar panels crossed $2 billion last year, and this new measure is expected to generate a hefty Rs110–130 billion in additional revenue. That's a sizeable chunk, especially as the government eyes solar not just for green credentials but also as a tool to ease grid pressure and lower average tariffs in the long run. This is less about slowing the solar boom and more about monetising it smartly—provided it doesn't dampen momentum. Meanwhile, the budget also quietly confirms the removal of the ceilingon the Debt Service Surcharge (DSS), previously capped at 10 percent of the national average electricity tariff. With the government doubling down on additional bank borrowingto tackle the mounting circular debt stock, electricity consumers are now locked into paying the DSS for at least six more years—and not just at 10 percent, but potentially more, if required. It's a stealth tax that refuses to go away, now permanently baked into monthly bills. Some may still call it reform. But it is anything but. On the subsidy front, power sector allocations have been trimmed modestly, down from Rs1.19 trillion to Rs1.03 trillion. It's aligned with IMF conditionalities and hints at an upcoming base tariff hike in July, given the reduced inter-DISCO tariff differential. But there's a rub: the budget includes a Rs400 billion lump sum power subsidy, the same as last year. That raises questions about how the government intends to continue the Rs1.71/unit relief throughout FY26, which in FY25 was only covered for three months. Unless there's a mid-year revision, the math doesn't add up. One possible answer? The Petroleum Levy (PL). Budgeted at Rs1.47 trillion, it's up by Rs207 billion. Historically, the government has linked PL proceeds to funding power subsidies, and on paper, the math could work. But it's an optimistic call. The new Carbon Levy—Rs2.5/litre on petrol, diesel, and furnace oil—might fetch around Rs50 billion at best. That leaves the bulk of the PL target dependent on keeping petrol and HSD levies around Rs87–88/litre on average through the year. That's ambitious, if not outright risky, especially with oil markets as volatile as ever. A mid-year downward revision, like the Rs120 billion cut last year, is not off the table. Zooming out, the budget reveals the continued tilt toward consumption-based taxation, with energy at the centre. From taxing solar to squeezing PL harder, the budget leans more on revenue extraction than structural fixes. The former may be justifiable; the latter, if pushed too far, could backfire. Fiscal discipline is a fine goal. But as ever, execution, external prices, and policy coherence will decide whether these bets pay off—or unravel midway. Copyright Business Recorder, 2025
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.
Times of Oman
09-02-2025
- Business
- Times of Oman
By 2047, India's real estate market will double to 15.5% of GDP from 7.3% now
New Delhi: India's real estate sector is poised for massive expansion, projected to grow to USD 5.8 trillion by 2047, contributing 15.5 per cent to the country's GDP, up from the current 7.3 per cent, according to CIRIL report. By 2030, the market size is expected to reach USD 1 trillion, a sharp rise from USD 200 billion in 2021. The retail, hospitality, and commercial real estate segments are also witnessing significant growth, providing crucial infrastructure for India's expanding economy. The real estate market is set to maintain strong investment momentum in 2025, backed by robust domestic economic fundamentals and a strategic focus on technology and ESG (Environmental, Social, and Governance) integration in investment decisions. The government is expected to extend infrastructure development beyond metro cities to achieve its Vision 2047. The sector has shown remarkable performance in 2024, with residential, office, logistics, hospitality, and retail segments expected to grow at a CAGR of 9.2 per cent between 2024-2028. Urbanization, rental market growth, and steady price appreciation are key factors driving this upward trajectory. Vijay Sarathi, Chairman of CIRIL, said, "We expect 2025 to continue its strong growth momentum with new investment avenues emerging in tourism and hospitality, retail, warehousing, co-working, and co-living projects." India's economic growth is projected at 6.6 per cent in 2025, driven by private consumption and investment, according to a United Nations report. Increased capital expenditure on infrastructure is expected to have strong multiplier effects on economic expansion. Investment in real estate remains strong, with Domestic Institutional Investors (DIIs) reaching a record-high 16.46 per cent market share in September 2024, up from 16.25 per cent, with net inflows of Rs1.03 lakh crore. Despite foreign institutional investor (FII) outflows in October 2024, DII investment remained at record levels, a trend expected to continue in 2025.
Express Tribune
30-01-2025
- Business
- Express Tribune
Power consumers poised to get Rs1.03 relief
Listen to article ISLAMABAD: Power consumers are set to receive a relief of Rs1.03 per unit on account of fuel cost adjustment for the month of December 2024. At the same time, it has been revealed that the closure of 969-megawatt Neelum-Jhelum hydropower plant for months is hitting the consumers as they have not been provided cheap electricity from the plant. A government official revealed this at a public hearing held by the National Electric Power Regulatory Authority (Nepra) to consider a petition of Central Power Purchasing Agency-Guarantee (CPPA-G), which sought approval for a reduction of Rs1.03 per unit in electricity prices under fuel cost adjustment for December. If Nepra approves the release of refund, it can provide some financial relief to electricity consumers in February. However, the tariff adjustment will not apply to lifeline consumers, electric vehicle charging stations and K-Electric customers. According to CPPA-G, the positive impact of winter package is being felt, with electricity prices being lower due to seasonal measures. However, it also highlighted the negative impact of non-functioning of the Neelum-Jhelum hydropower project. CPPA-G officials stated had the project been operational, electricity prices could have been even lower. Another issue raised during the hearing was the non-operation of 747MW Guddu power plant. CPPA-G was questioned as to why the plant was not running, which contributed to a rise in electricity costs. The agency did not give a clear response. Electricity consumers expressed concern and called for taking further steps to reduce electricity prices. A consumer pointed out that system's inefficiency was exacerbated by weather conditions, adding that "when it rains, lines go down, and when it's hot, lines go down." According to data submitted by CPPA-G, in December 2024, nuclear energy provided 2,065 gigawatt hours (GWh), or 26.48% of total electricity generation. It was followed by hydroelectric power that produced 22.8% at zero cost and re-gasified liquefied natural gas (RLNG)-based power plants, which contributed 20.7% of electricity. As the cost of fossil fuel sources, such as natural gas and local coal, stays higher, nuclear power remains a cornerstone of Pakistan's energy strategy due to its lower cost and environmental benefits. In January too, nuclear energy generation was the top source, contributing 20.78%, or 1,728 GWh, to the grid. The milestone was first achieved in December 2022, when nuclear power contributed more than 27% (2,284.8 GWh) to the country's energy mix. In December 2024, nuclear power comprised 26.48% of the energy mix, outpacing hydroelectric power and RLNG-based electricity. Earlier this month, Nepra also announced a reduction in electricity tariff of up to 75 paisa per unit for consumers of ex-Wapda distribution companies (DISCOs) and K-Electric on account of fuel charges adjustment. The regulator cut tariff up to Rs0.7556 per unit for DISCOs due to variations in fuel charges in November 2024. For K-Electric consumers, it slashed power price by Rs0.4919 per kilowatt-hour (kWh) for October 2024. The reimbursement was due to be made in electricity bills for January 2025. Discussing a tariff application of DISCOs, the regulator said that National Transmission and Despatch Company (NTDC) reported provisional transmission and transformation (T&T) losses of 244.158 GWh, equivalent to 2.946%, based on energy delivered to NTDC system during November 2024. Additionally, NTDC reported T&T losses of 19.528 GWh, or 3.391%, for Pak Matiari-Lahore Transmission Company's (PMLTC) high-voltage, direct-current line. NTDC is allowed T&T losses of 2.639% at 500-kilovolt and 220kV levels. For PMLTC, the permitted T&T losses are up to 4.3%.
