Latest news with #Rs640
Express Tribune
30-04-2025
- Business
- Express Tribune
FBR misses target by Rs833b
Listen to article The tax shortfall has ballooned to a staggering Rs833 billion in the first 10 months of the fiscal year, despite the government imposing record additional taxes and reducing refunds. Pakistan's tax chief, Rashid Langrial, as Pakistan's tax chief Rashid Langrial warned that the new budget will also challenging in terms of achieving targets. The shortfall exceeded the limit set by the International Monetary Fund (IMF) by over Rs190 billion. Last month, the IMF acknowledged that the annual target of Rs12.97 trillion was unattainable and subsequently revised it. Only in the month of April, the government added around Rs139 billion in tax shortfall, breaching commitment to the IMF that the shortfall against the original annual target will not be more than Rs640 billion. The Federal Board of Revenue (FBR) provisionally collected Rs9.3 trillion in taxes till end of April, falling short of the target by Rs833 billion, according to its provisional figures. The collection was still around 27% or Rs1.95 trillion higher than the previous fiscal year but not enough to stay on track. In terms of collecting taxes, this and the next fiscal year will be tough, admitted the chairman FBR before the National Assembly Standing Committee on Finance on Wednesday. He further said that this would leave little space for giving any relief in taxes in the budget. "But we are reducing taxes on the salaried class in the budget," said Chairman FBR without disclosing the quantum of relief. As of the end of March, the salaried class paid a record Rs391 billion in taxes, which were 56% or Rs140 billion more than the last year and 1420% higher than the taxes paid by the traders. The FBR sustained a whopping Rs833 billion shortfalls despite putting Rs1.3 trillion additional burdens in the last budget and it even did not spare the milk despite Pakistan being a nutrition deficient nation. The Pakistan Dairy Association (PDA), the representative body of packaged milk producers, on Wednesday sought the intervention of the National Assembly Standing Committee on Finance, to reduce the 18% sales tax on package milk that increased prices by up to Rs70 per litre. The PDA demanded to reduce the tax to 5% but the chairman FBR said that the IMF generally does not allow a reduction in sales tax rate but the government will consider the proposal in the budget. The standing committee recommended reducing the sales tax on package milk, as it was the highest tax rate on milk in the world. There has been over emphasis on increasing taxes, which has shifted the focus away from growing expenditures that are increasing at 24% pace during the current fiscal year, despite low single digit inflation. The Prime Minister has doubled the size of his cabinet, added more departments in an already bloated size of the government and approved to increase salaries of the cabinet members. For the month of April, the FBR's set target was Rs983 billion. However, despite taking advances and slowing refunds, it could collect only Rs844 billion. The FBR paid Rs43 billion in refunds equal to April last year despite collections growing by 29% on a monthly basis. Overall, the 10-month refund payments amounted to Rs428 billion Rs5 billion more than the last year. The IMF compelled 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-April period, the FBR missed its targets for sales tax, federal excise duty, and customs duty but again exceeded the income tax target on the back of over burdening the salaried class. According to the details, income tax collection amounted to Rs4.48 trillion during the first 10 months of this fiscal year, Rs325 billion more than the target. It was also Rs973 billion more than the last year. The burden was shared by the salaried class and the corporate sector, as the retailers and landlords still remained under taxed. Sales tax collection stood at Rs3.17 trillion, whopping Rs775 billion less than the target of over Rs3.95 trillion. The sales tax remained the most difficult area for the FBR and one of the reasons for low collection was less than estimated growth in large industries. The government had immensely increased the sales tax burden in the budget. However, the collection was Rs677 billion more than the last year. The FBR collected Rs602 billion in federal excise duty, Rs157 billion less than the target. But it was Rs149 billion higher than last year. Customs duty collection stood at Rs1.05 trillion, Rs228 billion below the target. The collection is hit by lower-than projected import volumes. It is also marred by manipulation of the goods declaration forms by the importers in connivance with the corrupt elements. It was Rs190 billion more than the last year. Meanwhile, the Pakistan Customs Officers' Association, in a general body meeting, condemned the growing trend of publicly targeting Customs officials without due process. It stressed that accountability must follow legal procedures, rejected media trials, and called for fair recognition of Customs' sacrifices and challenges in combating smuggling.
Express Tribune
29-03-2025
- Business
- Express Tribune
Tax shortfall widens to Rs725b
Listen to article Pakistan's tax shortfall widened to Rs725 billion in the first nine months of the current fiscal year despite slowing refunds, days after it committed with the International Monetary Fund (IMF) to achieving the annual goal of increasing collections to 10.6% of the size of national economy. In March alone, the government added more than Rs100 billion to the tax shortfall, putting in danger its commitment that the shortfall against the original annual target would not be more than Rs640 billion. The Federal Board of Revenue (FBR) provisionally collected Rs8.44 trillion in taxes till the last working day of March, before the commencement of Eid holidays, according to tax authorities. The collection was around 28% higher than the previous fiscal year but was not enough to stay on track. Revenues fell short of the July-March target of Rs9.17 trillion by Rs725 billion, they added. Tax officials said that the collection may improve by over Rs7 billion on Saturday from ports but it would not be sufficient to bridge the yawning gap, which was far higher than the assurance given to the IMF last week. Prime Minister Shehbaz Sharif said this week that the IMF had agreed to reduce the annual tax collection target of Rs12.97 trillion to Rs12.33 trillion, a reduction of Rs640 billion. The PM claimed that the IMF wanted to cut the target to Rs12.1 trillion but he did not agree. The IMF's revision is solely on account of slower-than-estimated economic growth and inflation. The overall tax-to-GDP target of 10.6% remains unchanged. There has been over-emphasis on increasing taxes, which has shifted focus away from growing expenditures that are increasing at a pace of 24% during the current fiscal year despite single-digit inflation. The prime minister doubled the size of his cabinet, added more departments, like the Public Affairs Unit, to an already bloated size of the government and approved increase in salaries of cabinet members. The government this week also approved to fund a Punjab-centric motorway project costing Rs436 billion, which was in violation of the commitment to the IMF. The FBR tried everything but almost all of its initiatives like the threat to arrest the chief finance officers of companies, banning economic transactions by ineligible persons and tracking of businesses failed to materialise. The National Assembly did not approve a bill to ban economic transactions while the FBR chairman's initiative to boost the morale of young officers by giving them 1,300cc cars also became disputed and ended prematurely. For March, the FBR's target was Rs1.219 trillion. However, despite taking advances and drastically slowing refunds, it could only cross Rs1.1 trillion till Friday evening. The FBR paid Rs34 billion in refunds, down by Rs37 billion, or 52%, compared to March last year. Overall, the nine-month refund payments were Rs384 billion, hardly Rs6 billion more than last year. The IMF has 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-March period, the FBR missed its targets for sales tax, federal excise duty (FED) and customs duty but exceeded the income tax target. Income tax collection amounted to Rs4.11 trillion during the first nine months of FY25, Rs277 billion more than the nine-month target. The burden was shared by the salaried class and the corporate sector, as retailers and landlords still remained under-taxed. The FBR half-heartedly pursued the Tajir Dost scheme but the IMF clarified that the scheme has remained operational. The IMF has cut the collection estimate of Rs50 billion from the Tajir Dost scheme. Sales tax collection stood at Rs2.86 trillion, Rs656 billion less than the target of over Rs3.5 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, including slapping taxes on milk and other consumable goods. The FBR collected Rs537 billion in FED, Rs143 billion less than the nine-month target. Customs duty collection stood at Rs926 billion, Rs208 billion below target. 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 corrupt elements. The Prime Minister Inspection Commission is looking into system breach, which led to the manipulation and tampering of more than 10,000 goods declaration forms. The Pakistan Single Window, the government-owned company responsible for handling customs data, had admitted the tampering but denied that its officials were involved.
Express Tribune
27-03-2025
- Business
- Express Tribune
Sigh of relief as IMF okays tranche release
The International Monetary Fund on Wednesday announced a new programme worth $1.3 billion -- 26th in lineand also concluded a staff level deal for the release of $1 billion second loan tranche of the ongoing bailout package after Pakistan committed to table a fiscally tight new budget in the National Assembly. The deals were announced after both sides made some adjustments in the 25th Extended Fund Facility (EFF), including lowering tax target by Rs640 billion, setting a new deadline to trim the Pakistan Sovereign Wealth Fund and open the economy to foreign companies. Pakistan will also impose carbon levy as part of the conditions of the new $1.3 billion programme with effect from July this year and increase water usage charges from next year as part of the conditions for the new Resilience and Sustainability Facility (RSF). Islamabad also reluctantly agreed to commence a study for phasing out the existing Special Economic Zones (SEZs) by 2035. AT Kearney an American consulting firm has been engaged to complete the study by June this year. The IMF's executive board will approve the EFF's second tranche of $1 billion and the $1.3 billion RSF new facility either by the end of April or early May, according to Pakistani authorities. However, the fund will release only $1 billion while the $1.3 billion will be given over a period of 28 months and subject to implementing about 13 conditions, including carbon levy. The IMF team has reached a staff-level agreement with the Pakistani authorities on the first review of the 37-month Extended Arrangement under the EFF, and on a new 28-month arrangement under the IMF's Resilience and Sustainability Facility (RSF) with total access over the 28 months of around $1.3 billion, said Nathan Porter, the IMF Mission Chief to Pakistan, on Wednesday. He said that the staff-level agreement is subject to approval of the IMF's Executive Board. Upon approval, Pakistan will have access to about $1 billion under the $7 billion EFF, bringing total disbursements under the program to about $2 billion. The announcement came 12 days after the IMF team, led by Nathan Porter, left Islamabad on March 14 without reaching a staff level agreement. Both sides subsequently continued discussions through video links that culminated on a deal on Wednesday. Where Pakistan conceded ground to the IMF, the global lender also made some adjustments in its previous policies, mainly lowering the tax target by Rs640 billion a mistake that has been rectified after nine months but it put undue pressure on the taxpayers, particularly salaried persons. While speaking to his cabinet, Prime Minister Shehbaz Sharif said that the IMF agreed to reduce the tax target to Rs12.33 trillion down from Rs12.97 trillion. There is a reduction of Rs640 billion against the annual target. The Express Tribune was the first media outlet that had reported soon after the last budget that either the tax target will be cut or a mini-budget will have to be introduced, as the annual target was highly unrealistic. The FBR has already sustained Rs605 billion shortfalls, which is expected to significantly widen further when March officially ends on this Friday. Nathan Porter outlined the policy priorities that Pakistan will have to implement during the upcoming months. He said that Pakistan would continue fiscal consolidation to reduce public debt while creating space for social and development spending and reducing crowding out of private investment. "The authorities are on track to achieve an underlying primary surplus of at least 1% of GDP and committed to sustaining consolidation in the fiscal year 2026 budget", said Porter. The statement suggests that the government will not have any room for giving stimulus for economic growth without putting additional tax burden. The IMF will again engage Pakistan in May to approve the next year's budget before it is formally presented to the National Assembly, said the government authorities. Porter said that the government will also refrain from increasing current spending beyond that budgeted, indicating that no supplementary grants can be issued. Pakistan is also committed to preserve the generosity of the Benazir Income Support Programme (BISP) unconditional cash transfer programme and aim to create savings on energy subsidies and prioritise development spending, he added. "Over the past 18 months, Pakistan has made significant progress in restoring macroeconomic stability and rebuilding confidence despite a challenging global environment," said Porter. While economic growth remains moderate, inflation has declined to its lowest level since 2015, financial conditions have improved, sovereign spreads have narrowed significantly, and external balances are stronger. Porter said that there were still risks to Pakistan's economy. "Downside risks also remain elevated. Potential macroeconomic policy slippagesdriven by pressures to ease policiesalong with geopolitical shocks to commodity prices, tightening global financial conditions, or rising protectionism could undermine the hard-won macroeconomic stability," said the Mission Chief. He said that climate-related risks continue to pose a significant challenge for Pakistan, creating a need to build resilience including through adaptation measures. The IMF underscored that it was critical for Pakistan to stay the course and entrench the progress achieved over the past one and a half years, building resilience by further strengthening public finances, ensuring price stability, rebuilding external buffers and eliminating distortions in support of stronger, inclusive and sustained private sector-led growth. The IMF appreciated amendments in the Agriculture Income Tax (AIT) regimes by all the provinces, calling it "an important step towards greater tax equity and expanding the tax base. But it said that the "effective implementation is crucial to the AIT's success and greater fiscal devolution in the next fiscal year. The IMF once again advised Pakistan to continue on the path of maintaining appropriately tight monetary policy. Recognizing that the full impact of recent rate cuts is still to be felt, the authorities will continue with an appropriately tight and data-dependent monetary policy to ensure inflation remains anchored within the State Bank of Pakistan's (SBP) medium-term target range of 57%, said Porter. He said that Pakistani authorities were also fully committed to preserving a fully functioning foreign exchange market to support exchange rate flexibility while rebuilding FX reserve buffers. The rupee has again started gradually depreciating; now ranging to Rs282 to a dollar. The IMF praised timely implementation of electricity and gas tariff adjustments, which it said has helped reduce the stock and flow of the sector's circular debt, and both should remain a priority. Porter said that the integration of captive power plants into the electricity grid was important. The IMF forced Pakistan to impose Rs791 per unit levy on these plants. However, Islamabad High Court on Wednesday gave a stay order against the levy. Porter also underlined privatizing inefficient generation companies, which the government had excluded from the first two phases of privatisation. Porter once again highlighted the issue of the governance structure of the Pakistan Sovereign Wealth Fund, asking Pakistan "adopting appropriate governance mechanisms and safeguards for the Pakistan Sovereign Wealth Fund". The government was supposed to amend the wealth fund law by December last year. It has now managed to win an extension in the deadline to amend the law in return for accepting the IMF's demand to make drastic changes in the existing governance structure. He said that Pakistan would also further strengthen institutional capacity to fight corruption and significantly reduce trade barriers to support inclusive growth and a level playing field for business and investment. RSF facility Pakistan and the IMF reached the staff level agreement for the $1.3 billion 26th programme. Porter said that the new programme will scale up climate reform efforts to reduce vulnerabilities to natural disaster risks and to build climate resilience. It is the new facility, which marks a departure from the government's claim that the 25th programme will be the last programme. In return for the loan, Pakistan has committed to strengthen public investment processes across all levels of government to prioritize projects that enhance disaster resilience, said Porter. The government will also improve the efficiency of scarce water resource usage, including through better pricing mechanisms, he added. It will enhance intergovernmental coordination on disaster financing; improve information architecture and disclosure of financial and corporate climate-related risks; and promoting green mobility to mitigate significant pollution and adverse health impacts, said the IMF.
Express Tribune
13-03-2025
- Health
- Express Tribune
CM lists progress in health, education
Chief Minister Murad Ali Shah presented a comprehensive report on his government's achievements from March 2024 to March 2025, stressing progress in healthcare, education, digital transformation, agriculture, and infrastructure development. During a presentation, held at the CM House, Shah said that the government has achieved remarkable progress over the past year through digital transformation, infrastructure development, and agricultural advancements. He added that these initiatives have impacted public services, business facilitation, and socio-economic growth. Healthcare The healthcare sector has seen remarkable progress, including technological enhancements and expanded services. The NICVD Karachi treated 1.4 million patients and performed over 5,000 surgeries, while the Sindh Institute of Cardiovascular Diseases (SICVD) launched a cardiac emergency centre in Baldia Town and a stroke program in Sukkur. The Institute of Medical Science Gambat excelled in organ transplants, completing over 200 liver and 100 kidney transplants. Hospitals like JPMC, DUHS, and Indus are expanding services with new technologies, such as robotic systems for surgery and cancer treatment. The Shaheed Mohtarma Benazir Bhutto Institute of Trauma treated 70,000 patients, while the Sindh Institute of Child Health & Neonatology opened new ICUs and pediatric units. A major focus on pediatric emergency care has reduced infant mortality to 2.9% in Sindh, better than the national average of 5.4%. Digital transformation The Sindh police implemented the S4 system, which includes facial recognition cameras at 42 toll plazas. The Excise & Taxation Department introduced an online vehicle tax system, generating Rs640 million, which has funded the construction of 2,100 houses for flood victims. Digital initiatives also extended to business facilitation. The Sindh government launched the CLICK Karobar app, allowing entrepreneurs to navigate 130 licences and permits in 16 departments. An e-licensing portal is also set to streamline approvals for businesses. Education & IT The People's Information Technology Program (PITP) awarded scholarships to 13,428 students, with 2,528 securing jobs. The government trained 3,000 university students and 200 teachers across various regions, and 1,500 graduates completed an IT boot camp, with 870 becoming self-employed. Infra & road development The province's infrastructure received a major boost with 196 new roads constructed, covering over 2,500 kilometres, and 120 roads repaired after flood damage. Key projects like the Hyderabad-Mirpurkhas Road and Tharparkar-Alibandar Road were completed. Water management & agriculture The Sindh Irrigation Department established the Hydroinformatics Centre for better water management, and 251 kilometres of watercourses were lined to improve irrigation. In agriculture, the government distributed solar-powered tube-wells, agricultural tools, and kitchen gardening kits to empower farmers, including 900 women.
Express Tribune
05-03-2025
- Business
- Express Tribune
Poultry vendors refuse to sell at govt rates, announce strike for Thursday
Listen to article Poultry vendors in Sindh have announced a strike starting Thursday, refusing to sell chicken at the government-mandated prices, Express News reported. Sindh Poultry and Retailers Association President Rao Mohammad Afzal stated that poultry farms are violating the official pricing, supplying live chickens at Rs490 instead of the government-approved rate of Rs400. "Vendors are being charged Rs780 per kilogram for chicken meat, so how can we sell it at the government price of Rs640?" Afzal said, explaining the financial strain the pricing discrepancy is causing. He further accused the local authorities of unfairly targeting vendors, imposing fines of up to Rs100,000. "The city administration is taking one-sided action against vendors, while poultry farms are holding back stock to artificially create shortages," he added. Afzal stated that the poultry shops across the city will remain closed until poultry farmers are held accountable for adhering to government prices and ensuring adequate supply at those rates. "The strike will continue until poultry farmers are compelled to follow the official pricing, and the supply of chicken at the government rate is ensured," he concluded.
