Latest news with #Rs290
Express Tribune
24-05-2025
- Business
- Express Tribune
After Tajir Dost flop, 1% levy proposed
Listen to article After the spectacular failure of the Tajir Dost scheme, which fetched a meagre Rs3 million against Rs437 billion paid by the salaried class so far, a tax advisory firm has recommended imposing a 1% income tax on all traders to ensure decent revenue collection. Tola Associates has also proposed limiting cash transactions to only Rs10,000 to discourage the informal economy, which has enabled traders to remain largely outside the tax net. These proposals were submitted this week to Deputy Prime Minister Ishaq Dar and Finance Minister Muhammad Aurangzeb. The firm also recommended that the government avoid further currency devaluation in the next fiscal year, challenging official projections that estimate the rupee falling to Rs290 to a dollar by June next year. The advisory firm has proposed that the government abolish the Tajir Dost scheme. Launched in June last year with the aim of collecting at least Rs50 billion, the International Monetary Fund (IMF)'s staff-level report disclosed this month that the scheme generated only Rs4 million. In contrast, the salaried class paid Rs437 billion in taxes during the first 10 months of this fiscal year, Rs150 billion higher than the same period last year. The firm recommended a 1% minimum income tax on all retailers, in addition to taxes already collected from wholesalers and retailers. It proposed that the tax be collected based on revenues generated under withholding tax clauses 236G and 236H. However, it is unlikely that the government will accept this recommendation. To enhance transparency and curb tax evasion, Tola Associates urged the government to ban cash transactions beyond Rs5,000 to Rs10,000 at retail and food outlets, mandating electronic payments. However, the Federal Board of Revenue (FBR) lacks the enforcement capacity to ensure compliance or to prevent businesses from discouraging digital payments. In a key recommendation, the firm stated that the upcoming budget should discourage currency devaluation by reducing non-essential imports, boosting local manufacturing and energy independence, promoting domestic value addition, and generating employment. It noted that economic stability requires a stable currency, targeted inflation, and no further devaluation. "Based on our estimates for FY26, if the current account deficit stands at 0.5% of GDP, the exchange rate should ideally stabilise around Rs276," said the report presented to the finance minister. However, the report noted that with the average exchange rate hovering around Rs280 this year, a potential depreciation of Rs10 to Rs15 could occur in FY26, bringing the rate to Rs290295 per dollar. Such devaluation could push inflation up by an estimated 3%, it warned. The government has already finalised the next budget based on an exchange rate of Rs290 per dollar. The firm also advocated export-led growth by implementing policies such as rationalising interest rates for industries, maintaining a balanced tariff policy on raw materials, and developing export-oriented industrial clusters. It added that promoting import substitution and offering result-based subsidies in key sectors like textiles, pharmaceuticals, and engineering goods is crucial for long-term sustainability. According to the firm, the 2025-2026 budget presents a critical opportunity for course correction and to reset the direction of the economy. It pointed out that the current policy rate of 11% remains a major barrier to industrial borrowing and investment. It urged the government to further reduce the real interest rate to the lower single digits to stimulate industrial expansion, particularly for capital-intensive manufacturing. To revive idle capacity and encourage new investment, the government should introduce a zero-markup loan scheme for priority manufacturing sectors. These concessional loans would reduce financial barriers and support import substitution, job creation, and export competitiveness. Tola Associates also expressed doubt over the FBR's ability to meet the next fiscal year's tax collection target of Rs14.1 trillion. The firm estimated that tax collection might reach Rs13.5 trillionfalling short of the IMF's target. It added that based on current trends, the FBR is likely to collect Rs11.9 trillion this fiscal yearRs1 trillion short of its original target. However, if the outcome of the super tax cases is in the government's favour, the FBR could potentially achieve Rs12.1 trillion. The firm reiterated its recommendation to impose an advance tax on undistributed reserves of companies that have not issued dividends for the past three years. It proposed a tax rate of 7.5% for unlisted and 5% for listed companies. This tax could be adjusted against future dividend taxes. It has also proposed changing the definition of resident Pakistani for the taxation purposes. "Pakistan is recommended to modernize its residency criteria to reflect actual economic presence and intent". Under its suggested framework, an individual would be considered a resident if they spend 182 days or more in Pakistan in a financial year. Those staying between 120 and 181 days would be assessed based on citizenship and income. For instance, a Pakistani citizen under the Pakistan Citizenship Act, 1951, or someone holding a Pakistan Origin Card (POC) with income above a certain threshold and no tax liability elsewhere, should be treated as a Resident but Not Ordinarily Resident (RNOR). Individuals not meeting these conditions and spending less than 120 days in Pakistan should be classified as Non-Residents, regardless of income or nationality, the firm added.
Business Recorder
17-05-2025
- Business
- Business Recorder
Gold price per tola gains Rs2,400 in Pakistan
Gold prices in Pakistan continued to grow in line with their increase in the international market. In the local market on Saturday, gold price per tola reached Rs338,500 after it accumulated Rs2,400 during the day. As per the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), 10-gram gold was sold at Rs290,209, after it increased by Rs2,058. On Friday, gold price per tola reached Rs336,100 after it gained Rs900 during the day. The international rate of gold also jumped on Saturday. The rate was at $3,177 per ounce (with a premium of $20), a gain of $24, as per APGJSA. Meanwhile, silver price per tola also increased by Rs33 to settle at Rs3,410.
Express Tribune
12-05-2025
- Business
- Express Tribune
FY26 budget pegs rupee at 290/$
The federal government has decided to make the new budget at an exchange rate of Rs290 to a dollar, anticipating only 3.6% depreciation due to a largely stable external account in the next fiscal year on the back of an International Monetary Fund (IMF) programme. The Rs290-to-a-dollar exchange rate indicates Rs10 or 3.6% depreciation, which is in line with the currency market trading in the past one year. Sources told The Express Tribune that the Ministry of Finance has instructed government departments to prepare budget estimates for fiscal year 2025-26 using the Rs290-to-a-dollar exchange rate. The rate will also be used for determining the defence budget portion related to foreign procurements and foreign debt servicing. Pakistan has decided to increase its defence budget by 18% to over Rs2.5 trillion after a surge in tensions with India. The exchange rate is the benchmark for allocating budgets to Pakistan's missions abroad and the Public Sector Development Programme (PSDP). The current budget had also been prepared on the assumption of Rs290 to a dollar, but the rupee largely remained stable. The government has now decided to make the revised budget estimates of the outgoing fiscal year on the basis of Rs280 to a dollar, said the sources. On Monday, the inter-bank rate for the rupee stood at Rs281.56. In its statement last week, the IMF urged Pakistan that "a more flexible exchange rate will facilitate the adjustment to external and domestic shocks, aiding the rebuilding of reserves". For the next fiscal year, the IMF sees Pakistan's gross official foreign exchange reserves growing to $17.7 billion, which is equal to 2.8 months of imports and a little better than this fiscal year's import cover. After facing severe shocks, Pakistan's economy has stabilised, although the government cannot yet afford to completely free import controls due to a thin cover of the foreign exchange reserves. Sources said that one of the reasons for expecting a stable exchange rate in the next fiscal year is the relatively low current account deficit of around 0.4% of GDP. This translates into less than $2 billion and can be comfortably financed on the back of foreign debt inflows. Inflation in the next fiscal year is also projected around 7.7% by the IMF, and the relatively stable exchange rate is one of the reasons for the projection, said the sources. However, the State Bank of Pakistan's assessment was that the rupee-dollar parity may remain around Rs299 to a dollar in the next fiscal year. The finance ministry did not agree to it and decided to make the budget at Rs290 to a dollar. Exporters recently urged Prime Minister Shehbaz Sharif to liberalise the rupee further, according to sources. For the next fiscal year, the interest payments on external debt are projected to reach approximately Rs1.2 trillion. Overall, the government aims to allocate around Rs8.7 trillion for debt servicing in the next fiscal year, which might be adjusted downwards due to a cut in interest rate last week. Pakistan's external debt largely remained under control in this fiscal year after the central bank resorted to buying dollars from the local market instead of taking fresh foreign loans. According to the SBP debt bulletin released on Monday, the external debt remained at $130.3 billion as of the end of March 2025, down by $800 million compared to a year ago. The reason for the decline was mainly the reduction in Pakistan's long-term debt liabilities. However, the country still needs large sums estimated at around $25 billion in the next fiscal year to repay its maturing loans. Out of the $25 billion, roughly $13 billion are rolled over by the foreign bilateral creditors every year. The government is currently in the process of working out next fiscal year's total foreign debt requirements in the light of repayment needs and building the foreign exchange reserves. But Pakistan's total debt and liabilities increased to Rs89.8 trillion by the end of March, showing a 10.1% increase compared to a year ago. The increase was mainly in the government's debt, which surged nearly 13% to Rs73.7 trillion during the period under review, according to the SBP.
Express Tribune
15-04-2025
- Business
- Express Tribune
Gold edges up amid quiet market
Listen to article Gold prices in Pakistan rose on Tuesday, tracking gains in the international market. According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold per tola increased by Rs600 to reach Rs339,400 in the local market. Similarly, the rate for 10 grams climbed by Rs514, settling at Rs290,980. On the global front, the price of gold rose by $6, with APGJSA quoting the international rate for Pakistan at $3,224 per ounce, including a $20 premium. This uptick follows a decline on Monday when the price of gold per tola fell by Rs1,800 to Rs338,800. Commenting on the market trend, Adnan Agar, Director at Interactive Commodities, said the market was relatively subdued on Tuesday following a period of heightened activity. "Today, the market is calm after nearly two weeks of significant movement," Agar noted. "Gold touched a high of $3,232 and a low of $3,209 during the session, currently stabilising at around $3,222. Yesterday's low was $3,190, but the market has seen some recovery since then." He added that the market may remain quiet due to the upcoming long weekend, with international trading expected to pause on Good Friday. Globally, gold prices gained on Tuesday, helped by safe-haven demand as US President Donald Trump's tariff plans kept investors wary of trade policy, while an overall weaker dollar also lent support. Spot gold was up 0.4% at $3,223.41 an ounce. Bullion hit a record high of $3,245.42 on Monday. US gold futures rose 0.4% to $3,238.70. "Traders are waiting for the next major fundamental development to drive the gold market, but the charts remain bullish. There's still safe-haven demand," said Jim Wyckoff, senior analyst at Kitco Metals. Federal Register filings on Monday showed that the US administration is advancing investigations into pharmaceutical and semiconductor imports in a bid to impose tariffs. Trump on Sunday said he would announce the tariff rate on imported semiconductors over the next week. Meanwhile, the Pakistani rupee recorded a marginal gain against the US dollar on Tuesday, appreciating by 0.01% in the inter-bank market. The local currency closed at 280.57, marking a slight increase of three paisas from the previous day's closing rate of 280.60. On the global stage, the US dollar remained steady but continued to hover near a three-year low against the euro and a six-month low versus the yen, as markets remained cautious amid ongoing uncertainty over shifting US tariff policies.
Express Tribune
15-04-2025
- Business
- Express Tribune
Gold price in Pakistan today – April 15, 2025
Listen to article Gold prices have continued their upward trajectory, with further increases being observed in both global and local markets. In the international bullion market, the price of gold per ounce increased by $6, reaching $3,224. This rise has translated into higher local prices, with 24-carat gold per tola increasing by Rs600 to Rs339,400. Additionally, the price of 10 grams of gold rose by Rs514, bringing it to Rs290,980 in Pakistan. Despite the rise in gold prices, silver prices remained steady, with the price of silver per tola holding at Rs3,397 and 10 grams at Rs2,912. These increases in gold prices reflect a sustained demand for the precious metal, both in the global and local markets. As prices continue to rise, investors and consumers alike are closely monitoring the trend. Earlier on Monday, gold prices in Pakistan fell on Monday after a three-day upward trend. According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold per tola had declined by Rs1,800, bringing it down to Rs338,800 in the local market. This decline came after gold had reached a record high of Rs340,600 per tola on Saturday, following a single-day increase of Rs1,800.
