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Express Tribune
a day ago
- Business
- Express Tribune
IMF rejects wealth tax, chicken duty
Listen to article The International Monetary Fund (IMF) has objected to the government's contentious proposals to impose a capital value tax on moveable assets and to slap a 5% federal excise duty on one-day-old chicks — measures that underscore the business-as-usual approach of the tax machinery. While the IMF did not endorse the tax on moveable assets and one-day-old chicks, it did agree to the imposition of a tax on digital services aimed at raising Rs10 billion in revenue, according to sources in the Federal Board of Revenue (FBR). There is also a budget proposal to increase the tax on dividend income of mutual funds from 15% to 20%. The withholding tax on interest income may also go up from 15% to 20%, according to officials of the FBR. Among the proposals that may be announced on budget day is the withdrawal of income tax exemption for venture capital companies and funds, according to senior FBR officials. The income tax exemption for the cinema business may also be withdrawn. There has so far been no relief in reducing the income tax rates for the highest slab of 35%, and the 10% surcharge on monthly incomes exceeding Rs500,000 may also remain, said FBR sources. However, the IMF has agreed to reduce the income tax rates for the remaining four slabs, providing some relief on monthly incomes below Rs500,000. It has not agreed to increase the income tax exemption threshold to Rs1.2 million but has approved cutting the rate from 5% to 1%. The sources said that the government wanted to reintroduce the wealth tax in the form of a capital value tax on all moveable assets, excluding shares of listed companies. The proposal had also been presented at the level of Prime Minister Shehbaz Sharif, said FBR officials. The proposal to impose tax on moveable assets such as cash and gold was also shared with the IMF, said the officials. However, the IMF did not endorse the proposal on the grounds that the government should tax income instead of taxing wealth. The FBR wanted to target cash balances in banks to raise revenue, according to FBR officials. Through the Finance Act 2022, the government had introduced a 1% CVT on foreign assets worth over Rs100 million owned by resident Pakistanis, but it has been challenged in the courts. The finance ministry and the FBR on Tuesday gave a briefing to PM Sharif about the budget contours, including measures that the IMF has cleared so far, the sources added. Some issues were still outstanding, including the relief for the real estate sector and the capital value tax. President Asif Ali Zardari on Tuesday convened a National Assembly session for June 10, where Finance Minister Muhammad Aurangzeb will deliver his second budget speech. The Economic Survey of Pakistan is expected to be unveiled on June 9, the third day of Eid. The FBR also wanted to introduce a 5% federal excise duty on one-day-old chicks, but the IMF did not support the idea. It pointed out that, on one hand, the FBR claims there are high taxes on food in Pakistan, and on the other hand, it recommends such proposals. Proposals like the tax on one-day-old chicks and moveable assets indicate that the FBR has run out of ideas. The IMF's concern was that taxing one-day-old chicks was not aimed at broadening the tax base; rather, it targeted a specific industry, said the sources. The FBR did not conduct any study before proposing the tax on chicks, which are an essential food item. The measure was rooted in a tax case involving just one company among hundreds, revealing the shallowness of the proposal. Last month, President Zardari issued the Tax Laws Amendment Ordinance, 2025, and one of the reasons was a poultry sector company. The government inserted a new section, 175C, in the Income Tax Ordinance through ad hoc legislation. The sources said that proposals to impose a 5% federal excise duty on all processed foods — including chips and biscuits — were also considered. Effectively, the 5% FED means the sales tax rate will increase to 23%, and after adding further tax and withholding taxes, the overall cost of taxation will jump to 29%. The prime minister was not in favour of doubling the federal excise duty on fertiliser and raised the issue with the IMF at the highest level. However, during last month's talks, the IMF asked the government to fulfil its commitment to increase the tax, said the sources. The sources said there was still a likelihood that the government may double the federal excise duty on fertiliser to 10% and introduce a 5% excise duty on pesticides in the budget. The sources said the prime minister was told that the budget numbers had been locked with the IMF. The FBR's annual target is likely to be Rs14.130 trillion, and the non-tax revenue target is Rs4 trillion. This brings the total tax and non-tax revenue target to Rs17.1 trillion. The federal government has been allowed to allocate Rs1.186 trillion in budget subsidies, including Rs1.036 trillion for the power sector. For IMF programme purposes, the federal development budget may be Rs873 billion, while provincial budgets are estimated at Rs2.1 trillion — about Rs700 billion less than what the four provincial governments indicated in the Annual Plan Coordination Committee meeting. The IMF has allowed all federal and provincial governments to spend Rs22 trillion on current expenditures. The total expenditures by all five governments for IMF programme purposes are estimated at Rs25 trillion for the fiscal year 2025-26.
Business Recorder
28-05-2025
- Business
- Business Recorder
Rs1.2bn allocation made to revive citrus industry
LAHORE: The Punjab government has allocated a huge sum of Rs1.2 billion for citrus revival initiative in the province to provide technical guidance to growers and to introduce improved citrus varieties. Pakistan's annual citrus exports have dropped from $200 million to $130 million and urgent efforts are needed to provide technical guidance to growers and to introduce new, improved citrus varieties, said Deputy Convener Mohsin Shahnawaz Ranjha while speaking at the second meeting of the Chief Minister's Citrus Development Task Force. He proposed support for nursery businesses and the establishment of a development board focused on orchard revival in Sargodha. He also stressed the need for the swift completion of a modern citrus laboratory and the creation of a monitoring unit for orchard evaluation. The meeting was held at Agriculture House, Lahore. It was chaired by Punjab Minister for Agriculture and Livestock, Syed Ashiq Hussain Kirmani. During the meeting, various proposals for the development of the citrus sector were reviewed. Attendees included Deputy Convener of the Citrus Development Task Force Punjab, Mohsin Shahnawaz Ranjha, Secretary Agriculture Punjab, Iftikhar Ali Sahoo, and Secretary Industries, Commerce, and Investment Punjab, Umar Masood. Kirmani emphasized that boosting citrus production is a key priority for the government of Punjab. He noted that kinnow, in particular, is a signature fruit of the province. However, climate change has led to the deterioration of citrus orchards, making them more susceptible to diseases. This has resulted in a decline in fruit size and shelf life, particularly in kinnow. Several practical initiatives were agreed upon during the meeting, including the establishment of a Citrus Park, integration of citrus orchards into the Kissan Card platform, recruitment of 100 agricultural interns and 100 youth for a three-year citrus revival project, and the provision of subsidies similar to those offered in the wheat support programme. Minister Kirmani also underscored the need to regulate fruit nurseries through licensing and registration. He instructed the Bank of Punjab to introduce a loan scheme for farmers operating citrus nurseries. He stressed the importance of enhancing citrus exports and improving the value chain to meet international standards. Under the Chief Minister's Kissan Package, Rs1.2 billion has been allocated for the citrus revival initiative. This funding aims to establish certified nurseries, create new orchards, and boost both citrus production and exports to strengthen the national economy. The minister further stated that the primary goal of the citrus revival programme is to utilize modern agricultural technology to produce certified citrus plants and provide technical support to farmers. The overarching objective is to improve both the yield and quality of citrus through certified plant material. Copyright Business Recorder, 2025
Express Tribune
24-05-2025
- Express Tribune
Triple murderer gets life in jail on 7 counts
A special Anti-Terrorism Court (ATC) on Saturday awarded a triple murder accused seven life terms and ordered confiscation of all his moveable and immoveable properties. The convict was additionally sentenced to a total of five more years in prison for other related offences along with a fine and compensation of Rs1.2 million. Judge Amjad Ali Shah announced the verdict in the high-profile police encounter case of Dina Police Station, Jhelum, in which three police officers were martyred. The accused, Abid Ali Shah, son of Zulfiqar Shah, was found guilty. Shah was travelling from Islamabad to Gujrat on June 12, 2024, accompanied by companions. Near the Turki Mor toll plaza, police had set up a checkpoint. When the accused's car, bearing registration number CH 632, approached the checkpoint, the police suspected the vehicle and signalled it to stop. However, the vehicle fled. The police pursued the vehicle with two official cars. Upon reaching the Dina police jurisdiction, the accused opened fire with a Kalashnikov rifle, resulting in the martyrdom of Head Constable Gulzar Ahmed, and Constables Mazhar Hussain, and Zeeshan Sadiq. The accused fled into a nearby forest, but police managed to apprehend one suspect during the pursuit and recovered the assault rifle used in the attack.
Mint
21-05-2025
- Business
- Mint
HAL share price: 3 key reasons why Jefferies expects 23% upside for this Defence stock
Defence Stock: HAL share price has risen around 16% in last one month with the India Pakistan News flow bringing focus on Defence stocks . Here 3 key reasons why Jefferies expects another 29% upside for the stock For three to five years, double-digit revenue growth for Hindustan Aeronautics Ltd should be driven by high margin service income and aircraft deliveries, expects Jefferies India Pvt Ltd. . FY26 sales projection of 8–10% seems modest. PM Modi's praise of Made in India equipment amid recent tensions between India and Pakistan suggests a greater emphasis on indigenous production and purchased which is positive for HAL. Jefferies has given a BUY ratings with a target price of ₹ 6475 for HAL share price which currently is trading around ₹ 5000 levels. This indicates about 23% upside for HAL share price. Strong Order book and pipeline- The revenue visibility for FY26-FY30 period is provided by the Rs1.89 trillion (1,89,000 crore) order book which is 6.1 times FY25 revenues) and the Rs2.5 trillion pipeline: In FY25, Hindustan Aeronautics (HAL) recorded a 3 times year on year increase in order flow of Rs1.2 trillion, of which Rs1 trillion was made up of manufacturing orders and the remaining was mostly made up of repairs and maintenance. Rs650 bn Tejas Mark 1A and Rs340 bn Advanced Light Helicopter orders have near-term ordering visibility. Rs600 bn Sukhoi-30 upgrade orders are expected over 3-5 years as per Jefferies Strong Medium term outlook for revenues and margins- Management in FY24 mentioned that service revenue should rise 8-9% CAGR (compound annual growth rate) and manufacturing revenues should rise 15-18% in the medium term. Also Deliveries of GE engines should cause manufacturing revenues to increase starting in FY26 estimated as per Jefferies EPS upgrades for FY26 and FY27- Jefferies has Increases Earnings Per share estimates for FY26 and FY27 by 3%. The global defense theme enhances the benefits of order book exposure. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Business Recorder
15-05-2025
- Business
- Business Recorder
Late payment surcharges: PAC dismisses PPL's Rs1.2bn claim against Cnergyico Pk Ltd
ISLAMABAD: A sub-committee of Public Accounts Committee (PAC) has dismissed Pakistan Petroleum Limited (PPL)'s Rs 1.2 billion claim for late payment surcharges against BYCO Petroleum Pakistan Limited now renamed Cnergyico PK Limited on long outstanding dues. The committee concluded that no formal sale agreement existed between the two companies and the matter was sub-judice thus, nullifying the surcharge claim. Syed Naveed Qamar convened the meeting to examine Audit Report of Petroleum Division (PPL, OGDCL, PMDC and ISGS) for audit years 2022-23 to 2014-15, 2012-13 and 2011-12. During the audit of PPL for the fiscal year 2017-18, it was observed that PPL made supply of condensate to BYCO and an amount of Rs 1.2 billion was outstanding for the period from December 2009-11. The condensate was sold to BYCO without any agreement and all supplies were made on the direction of Ministry of Petroleum and Natural Resources. However, no payment was made by BYCO. The PPL made a number of requests to BYCO and the ministry for the payment of outstanding dues. Later on, the company declared the amount of Rs 1.181 billion as doubtful debts and subsequently, made provisions of doubtful allowance in the annual accounts for the year 2011-12. An official of NAB apprised the members' committee that BYCO honoured its commitment and deposited Rs1.2 billion outstanding principal amount to NAB and the amount was returned to PPL after keeping lawful 25 percent share in the recovery. Copyright Business Recorder, 2025
