Latest news with #budget2023
Arab News
27-05-2025
- Business
- Arab News
Pakistan stocks brace for ‘bumpy ride' amid fears of tax-heavy, IMF-driven budget
KARACHI: Pakistan's stock market is expected to experience a 'bumpy ride' in the coming days due to what some analysts on Monday described as a challenging new budget the South Asian nation is set to announce next month in line with recommendations from the International Monetary Fund (IMF). Prime Minister Shehbaz Sharif's administration has been in talks with the IMF over its new fiscal plan, though the Fund's team left Pakistan last week without reaching an agreement on key issues, including higher defense spending and the proposed taxation of agricultural income. As a result, the benchmark KSE-100 Index remained largely flat in recent days and slipped 0.7 percent to 118,221 points on Monday, following rumors that the government planned to raise the Capital Gains Tax (CGT) on share trading income. 'Given the new measures that have been IMF-driven and that are impacting sentiment at the stock exchange, we are expecting some bumpy rides and [do] not [expect] a clean ride up like we saw in the prior year,' Ahsan Mehanti, chief executive officer at Arif Habib Commodities, told Arab News in an interview. Finance Minister Muhammad Aurangzeb is expected to present the new budget on June 10 in Pakistan's National Assembly, the parliament's lower house, after the government postponed its earlier budget date of May 2 by nearly a week. SMALL INVESTORS The prevailing uncertainty has kept small investors like Abdur Rauf and Jawed Khanani from buying stocks, fearing an unfavorable outcome from the ongoing budget talks between the government and the IMF. 'If the budget turns out negative for the market, our money will get stuck,' said Rauf, a 68-year-old retailer, who said his 'investment level has come down to 25 percent due to the budget factor.' He maintained the government, by taxing bonus shares, was discouraging listed companies from issuing them to shareholders. 'They [the companies] are now giving dividends, which too have been taxed at 15 percent for tax filers and 30 percent for non-filers,' he said, adding, 'after deducting the dividend tax and members' [brokers'] commission, the investor is left with little money.' Due to heavy taxation, small investors, mostly households and retired salaried individuals, have almost disappeared from the equity market, while large investors are also operating under pressure. 'The government should exempt dividends [from taxes], reduce the [brokers'] commission and abolish the tax on bonus shares so that investors could get some relief from companies and fresh investments could come to the market,' Rauf told Arab News. Khanani also expressed concern over rumors of increased tax on dividend income and hoped the new budget would bring down existing tax rates. 'People hope that the [existing] 15 percent CGT on non-filers [of tax] should be brought down to 12 percent or 10 percent,' he said, seated in a small trading booth at the Pakistan Stock Exchange's main trading hall. GROWTH-ORIENTED OR CHALLENGING BUDGET? Meanwhile, big market players like Arif Habib, chairman of the Arif Habib Group, one of Pakistan's leading business conglomerates, are optimistic the government will unveil a growth-oriented budget after stabilizing the economy over the past year. 'You see, after the [economic] stabilization, the market expectations are that the new policies would be for the growth in the economy,' he told Arab News in an interview. Regarding high taxes, he said the government was 'very much concerned that the taxation rates in Pakistan are high' and would aim to provide maximum relief to investors and the general public if the IMF agrees to its proposals. Habib, who is believed to have close connections in policymaking circles, informed the IMF's broader conditions hinge on the size of the budget deficit. 'The Pakistani side wants to have some aggressive approach,' he continued. 'They wish that we may, in fact, incur some budget deficit, higher budget deficit, but give relief to the investors and to the general public.' However, he noted this would depend on the IMF's approval of a fiscal gap figure the Sharif government may be proposing for the next year. 'Now the number in fact being discussed in the market is about 5.1 percent or 4.9 percent,' he said. Habib said he sees no 'element of harshness' in the new budget but noted that the key question for the government is how much relief it can offer the market. 'Expectations are high,' he added. 'And if those are not met, then the markets would not, in fact, be happy about it.' Analyst Mehanti offered a contrasting view, saying higher taxes are likely for sectors listed on the PSX. 'It will be a very, you know, challenging budget,' he said. 'We are expecting, you know, higher levies for oils, fertilizer, stock market and real estate.'
Bloomberg
22-05-2025
- Business
- Bloomberg
New Zealand Budget 2025: Winners and Losers
New Zealand Finance Minister Nicola Willis had billed Thursday's budget as a sober affair that would contain 'no unicorns, no rainbows.' Women working in female-dominated fields were arguably the biggest losers, with the government estimating contingency savings of NZ$12.8 billion ($7.6 billion) over four years by making it harder for them to lodge pay equity claims.
Mail & Guardian
21-05-2025
- Business
- Mail & Guardian
MK party targets Ramaphosa, Godongwana in motion of no confidence over budget ‘chaos'
The uMkhonto weSizwe (MK) party has tabled a motion of no censure against Finance Minister Enoch Godongwana and a vote of no confidence in President Cyril Ramaphosa, citing failed leadership and economic mismanagement. (Darren Stewart/Gallo Images via Getty Images) The The party accused The party said in a statement on Wednesday that the minister's February budget failed to address South Africa's record-high unemployment, rising poverty and extreme inequality. 'Minister Godongwana presented yet another hollow and anti-poor budget, instead of meaningful relief, the most vulnerable were burdened through fuel levy increases and the removal of essential zero-rated VAT items.' The party described the minister's handling of the budget as 'chaotic,' pointing to the failed budget sittings, dubbed Budget 1.0 and Budget 2.0 which they say cost taxpayers R2.4 million. These sessions collapsed over differences between ANC and Democratic Alliance (DA) MPs, who are part of the government of national unity (GNU). 'Investor confidence and public trust were further eroded when the government made a sudden U-turn on the VAT hike,' the statement read. 'This came after businesses had already spent millions on adjustments.' The party accused Godongwana of failing to table a credible fiscal framework or implement a rescue plan for the poor. It also cited the auditor general's findings of more than R126 billion in fruitless and wasteful expenditure by public entities, which it says the treasury has failed to address. 'Budget 3.0 is nothing more than political theatre,' the MK party said. 'What South Africa needs is not more spin, but a complete break with the neoliberal consensus.' The party is calling for a 'people's budget' centred on hunger, landlessness and joblessness. Its demands include the nationalisation of mineral resources, accelerated land redistribution without compensation, the expansion of the VAT zero-rated basket, and the dismantling of economic policies it believes serve elites and multinational corporations. The party accuses Ramaphosa of abandoning the poor and capitulating to 'foreign right-wing interests'. The party says Ramaphosa's decision to include 'fringe' political groups in the GNU has delegitimised the administration and weakened its ability to govern effectively. 'While millions go hungry, Mr Ramaphosa has chosen to entertain fabricated narratives of white persecution pushed by fringe extremists now sitting alongside him in government,' the party said. 'This is a betrayal of his constitutional obligations.' The vote of no confidence, although unlikely to succeed in the National Assembly given the ANC's alliances, sends a signal of growing dissent in parliament. It also underscores the difficulty Ramaphosa faces in keeping the GNU stable. Early this month, Economic Freedom Fighters leader Julius Malema signalled the party would back a no-confidence motion if one is introduced, calling for Godongwana and treasury director-general Duncan Pieterse to immediately resign because they have 'proven themselves incapable of formulating a lawful, credible This move comes as tensions among GNU parties begin to ease, after months of internal discord sparked by opposition to the proposed two percentage point VAT increase. But the MK party, which has positioned itself as a radical alternative to the mainstream GNU alignment, continues to reject the current economic model and calls for an overhaul of governance priorities. The party's national spokesperson, Nhlamulo Ndhlela, reiterated their position: 'We will not be silent while our people starve. We stand firmly for economic justice, accountability and a new path forward, one that places the people before profits.' Ramaphosa and Godongwana have not yet formally responded to the motion. Ramaphosa and DA leader John Steenhuisen are meeting the Trump administration in Washington in an attempt to repair South Africa's relationship with the US. But earlier this month, ANC secretary general Fikile Mbalula said the ANC would support Godongwana through calls to have him removed from his position, arguing that the minister had not done anything wrong. The motions are expected to be debated when parliament reconvenes later this month.
