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PAKISTAN ATTACHES HIGH IMPORTANCE TO TIES WITH US: PM RESPONDS TO PRESIDENT BIDEN’S LETTER Monday, 1 April, 2024 I 21 Ramazan, 1445
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REITERATES ISLAMABAD’S DESIRE TO WORK WITH US FOR GLOBAL PEACE, SECURITY ISLAMABAD
WELCOMES COOPERATION BETWEEN TWO COUNTRIES IN ENERGY SECTOR, GREEN ALLIANCE INITIATIVE
STAFF REPORT
RIME Minister Shehbaz Sharif on Sunday responded to President Joe Biden’s letter and reiterated Islamabad’s desire to work with the United States (US) for global peace and security, the Prime Minister’s Office said. This week in the first top-level contact between the US and Pakistan during President Biden’s tenure in office, the US president assured Shehbaz Sharif of his administration’s full support in addressing the critical challenges facing the region, signifying a thaw in frosty USPakistan relations following the withdrawal of international forces from Afghanistan and the subsequent allegations by Pakistan’s former premier Imran Khan of a US conspiracy against his administration. The US president’s outreach marked a notable shift from the previously perceived indifference, evident in the absence of direct communication with Khan’s government. The correspondence underscores a potential recalibration of bilateral relations, with the US president describing the partnership between the two countries’ people as “crucial for global and local security.” In response to Biden’s letter, PM Shehbaz said that Islamabad attached “key importance” to its relations with the United States, noting that both countries were working together on important initiatives in the fields of energy, climate change, agriculture, health and education. “Pakistan wants to work with the United
States to achieve the shared objectives of global peace and security, and regional prosperity and development,” PM Shehbaz said in his letter, welcoming cooperation between the two countries in the energy sector and the Green Alliance initiative. The Green Alliance framework seeks to promote renewable energy, sustainable agriculture and green transportation, and aims to create opportunities for economic growth and development in Pakistan by investing in sustainable infrastructure, innovation, and research and development. In his letter, the US president had specifically mentioned of the Green Alliance initiative,
Govt introduces tax on banks for low private sector lending g
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Rs 20.00 | Vol XIV No 274 I 8 Pages I Islamabad Edition
MOVE AIMS TO STIMULATE ECONOMIC ACTIVITY BY ENCOURAGING BANKS TO INCREASE THEIR FINANCING TO BUSINESSES PROFIT
MONITORING DESK
The government has unveiled a new tax policy that imposes an additional 10% to 16% tax on banks whose lending to the private sector falls below 50% of their total deposits, as reported by Express Tribune. This move aims to stimulate economic activity by encouraging banks to increase their financing to businesses, particularly as borrowing costs are expected to decrease. The State Bank of Pakistan’s (SBP) policy rate, which has reached a record high of 22%, has led to an increase in loan defaults by businesses and households alike in 2023. Consequently, the banking sector experienced a significant rise in non-performing loans (NPLs), reaching a 14-year peak at Rs62 billion. According to Topline Research, banks with an advance-to-deposit ratio (ADR) below 40% will now be subject to a 16% tax on income earned from government debt securities, such as treasury bills and Pakistan Investment Bonds. A lower tax rate of 10% will apply to banks with an ADR above 40% but below 50%, while those maintaining an ADR above 50% will be exempt. In 2023, the majority of banks listed on the Pakistan Stock Exchange (PSX) had an ADR below the 50% threshold, with Samba Bank, Faysal Bank, and The Bank of Punjab being notable exceptions. Sana Tawfik, an economist at Arif Habib Limited, explained that banks faced this tax in 2022 but were exempt in 2023. The tax has been reinstated for 2024, with some banks awaiting further clarification in the upcoming budget. The tax reintroduction could lead banks to limit deposit acceptance to meet ADR requirements artificially, a practice observed in December 2023 to avoid the tax for 2022. Tawfik suggested that a new mechanism for monitoring ADR compliance more frequently could encourage genuine lending increases to the private sector. However, some banks remain cautious about taking additional risks in a high-interest-rate environment that could lead to more NPLs.
saying his administration would continue to work with Pakistan for environmental improvement. Biden also spoke of sustainable agricultural development, water management and recovery from the devastating effects of the 2022 floods in Pakistan. “The US will stand with Pakistan in facing the most critical challenges of the time and region,” Biden was quoted as saying in an official statement released by the Pakistani authorities on Friday. “Public health protection, economic growth and education for all are shared visions that will continue to be promoted together.”
He also expressed dedication to protecting human rights and promoting development together with Pakistan amid previous US concerns over freedom of speech and expression in the wake of social media disruptions in the South Asian country. “The strong partnership established between the two nations will be strengthened,” Biden was quoted as saying. On the other hand, after President Biden’s letter, political leaders and experts had noted that the US President did not greet PM Shehbaz on assuming power or winning the elections. At a recent Congressional hearing, senior US diplomat Donald Lu had been asked whether Washington recognised the new government in Pakistan. The question, posed by Representative Tim Burchett, was based on allegations of rigging and reports of irregularities in the recent February 8 elections. US lawmakers and the State Department have repeatedly called for a thorough probe into the claims, while Lu suggested that the Election Commission of Pakistan may want to “re-do” some of the contests. However, in his response at the time, Lu had clarified that the “US does not go around recognising new governments”, rather it just worked with the regime in power at the time. Last month, a cohort of US Democratic lawmakers had written to Biden and Secretary of State Antony Blinken, urging them to refrain from recognising the new government in Pakistan until allegations of election rigging were thoroughly investigated.
Govt raises Petrol price by Rs9.66 per litre for next fortnight ISLAMABAD
STAFF REPORT
The federal government on Sunday jacked up the price of petrol by Rs9.66 per litre for the next fortnight, starting April 1, 2024, which would have a serious inflationary impact on the lives of ordinary citizens, especially ahead of Eidul Fitr. The government, however, decreased the rate of high-speed diesel (HSD) by Rs3.32. After the hike, the price of petrol reached Rs289.41 while HSD is available at Rs282.24. According to a notification issued by the finance ministry, the price of petrol was increased as per the recommendation of the Oil & Gas Regulatory Authority (Ogra). The Finance Ministry said in a statement
that the changes were due to a corresponding rise in petrol prices and a decrease in HSD prices in the international market. It added the change was in line with the government’s policy of passing on price variations in the international market to the domestic market. The new prices of petroleum products will be effective from April 1, 2024 (today). Meanwhile, the prices of kerosene oil and light-diesel oil were reduced by Rs2.27 and Rs.38 per litre, respectively, to Rs186.39 and Rs167.80. Kerosene is mostly used by unscrupulous elements, who mix it with petrol, and to some extent for lighting and heating in remote areas. Light diesel oil is consumed by flour mills and a couple of power plants. Petrol is predominantly used in motor-
bikes and cars as an alternative to compressed natural gas (CNG), especially in the Punjab province where indigenous gas is not available at CNG retail outlets. HSD is primarily used in the agriculture and transport sectors, and this price reduction may help alleviate inflation to some extent. The recent increase in petrol price is attributed to a rise in the premium from $12.15/barrel to $13.507/barrel, marking a $1.45/barrel increment. The new prices of petroleum products will be implemented at 12am, which will remain applicable for the next 15 days. The decision followed up on Prime Minister Shehbaz Sharif’s announcement on March 15 in which he increased the price of diesel by Rs1.77 per litre while keeping the price of petrol unchanged.
Tarar said that targets had been given on the basis of realistic approach like the finance ministry had been given the target to reduce inflation and unemployment, increase GDP growth, restructuring of loans and digitalization of the Federal Board of Revenue. He said that ministers which would show good performance would be appreciated, adding that a self-accountability system had also been evolved and key performance indicators of ministries would be evaluated using modern IT interventions. “Reducing trade deficit, promoting vocational training, increasing forex, boosting exports in the IT sector, activate facilities like PayPal, activating wifi hotspots and introducing latest digital system across the country are some clear and key targets,” he added. Briefing about the targets of the Interior Ministry, Attaullah Tarar said that the ministry had been asked to launch a crackdown against illegal weapons, devise a new system to stop terrorism, take action against illegal foreign residents in the country and stop smuggling. “Meetings were held related to
the security of the Chinese and how to take preemptive action to curb terrorism on the basis of intelligence information,” Attaullah Tarar said and added that coordination between the Centre and provinces would also be checked in this regard on the same pattern on which National Action Plan implementation had been supervised. Regarding targets of the Law ministry, the Information Minister said that steps had been taken for making laws for the protection of minorities and an eportal would be made for passed laws in the country. He said that till September 2024, a report related to human rights would be prepared and targets related to implementation of laws would also be checked. About targets of the Ministry of Industries, Attaullah Tarar said that a target had been given related to Industrial Development Regulatory Authority and promotion of ship breaking industry. He said that in Pakistan, the minerals sector had a lot of potential, adding that a target related to exploration of minerals and their export had also been given.
Ministries given targets to provide relief to people, fulfil IMF’s condition: Tarar LAHORE
STAFF REPORT
Federal Minister for Information and Broadcasting Attaullah Tarar said on Sunday that all ministries had been given targets during the cabinet meeting to fulfill International Monetary Fund (IMF) conditions and provide relief to the masses. Addressing a press conference in Islamabad, he said that in yesterday’s meeting, Prime Minister Shehbaz Sharif gave short, medium and long-term targets to all ministries aimed at bringing betterment to the lives of the people. “The Cabinet consists of experienced people, youths, seasoned politicians and technocrats,” he added. He said that the Prime Minister had decided to evaluate the performance of each ministry and key performance indicators had also been set for them. “By using the latest technology, achievement of targets given to ministries will be monitored. He added that written instructions have been issued to all the ministries in which they have been informed about the targets they have to meet,” he added.
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10 dead, 12 injured as rain, hailstorm pummel parts of KP PESHAWAR
STAFF REPORT
The two-day-long spell of heavy rains coupled with hailstorm, battered parts of Khyber Pakhtunkhwa, claiming 10 lives besides 12 other persons were injured in different rainrelated incidents, the Provincial Disaster Management Authority (PDMA) said. The provincial authority said that the affected districts in KP included Shangla, Bannu, Bajaur, Peshawar, Nowshera, Mansehra, Mohmand, Mardan, North Waziristan, Swat, and Upper Dir. Tragically, eight of the deceased were children, and two were women. Among the 12 injured, nine were children, two were women, and one was a man, the PDMA report said. A total of 27 houses were damaged due to the collapse of walls and roofs in different districts, in which 3 houses were completely damaged and 24 houses were partially damaged, the PDMA report said. The PDMA has swiftly responded to the situation, providing relief items to affected individuals in various districts of the province. To ensure a coordinated and effective response, the PDMA has instructed the concerned district administrations to expedite relief activities. The agency’s emergency center is fully operational, and citizens are urged to call its helpline for assistance or to report any emergency situations. The PDMA continues to monitor the situation closely and is working with local authorities to provide necessary support to those affected by the heavy rains and hailstorms. inclement weather. Residents in affected areas are advised to stay indoors if possible and avoid crossing flooded areas. Motorists should exercise caution on the roads, as visibility may be reduced and roads may be slippery.
FBR revenue collection increases 33% in March, nearing Rs879b target g
FOR FY2024, GOVT AIMS TO COLLECT RS9.415TR, MARKING 30% INCREASE AGAINST LAST YEAR'S REVISED FIGURE OF RS7.2TR PROFIT
NEWS DESK
Tax collection by the Federal Board of Revenue (FBR) in March nearly reached its goal, falling short by Rs1 billion, according to provisional data released on Saturday. The collected amount for March was Rs878 billion, slightly below the target of Rs879 billion. This represents a 32.62% increase from the Rs662 billion collected in the same month the previous year. Adjustments in the books are expected to refine these numbers further. Additionally, with the data covering up to March 30, the FBR anticipates additional revenue on the last day of the month.
In the fiscal year to date, from July to March, the FBR has gathered Rs6.709 trillion, surpassing its target by Rs1 billion. This performance offset the deficits recorded in January and February, attributing to a robust collection in March 2024. For the fiscal year 2024, the government aims to collect Rs9.415 trillion, marking a 30% increase from the previous year’s revised figure of Rs7.2 trillion. Notably, revenue from imports is on the rise, contributing to this growth. However, details on sales tax refunds for the first nine months have not been disclosed. Efforts to widen Pakistan’s tax base include the implementation of a digital system targeting professional service providers, in-
cluding lawyers, doctors, and engineers. Currently, the country has approximately 2.3 million taxpayers, with corporate tax filers constituting 0.8% of commercial and industrial electricity consumers and GST-registered entities accounting for 13% of the taxpayer population. Finance Minister Muhammad Aurangzeb has prioritized digitalization to curb financial leakages and improve efficiency. Despite the existence of the FBR Track and Trace system for several years, it has yet to yield the expected outcomes. Addressing the Rs1.7 trillion litigation backlog in tribunals remains a significant challenge, with previous finance ministers struggling to reduce this figure.