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AuRAnGzeb ReiteRAtes boostinG tAx-to GDP RAtio to 13% in next thRee YeARs Friday, 14 June, 2024 I |7 Zil-Hajj, 1445
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Rs 20.00 | Vol XIV No 345 I 8 Pages I Islamabad Edition
PETROLEUM DEVELOPMENT LEVY WILL BE INCREASED GRADUALLY FOLLOWING INTERNATIONAL OIL PRICES, SAYS MINISTER FOR FINANCE IN POST-BUDGET CONFERENCE
IMF satisfied with Pakistan’s 2024-25 budget: report PROFIT
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EITERATING the pressing need for reforms and broadening of the tax base, Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb asserted here on Thursday that below 10% tax to GDP ratio was not sustainable. “We have to take it up to 13% in the next three years gradually,” the minister said while addressing the post-budget press conference. He said that no country could sustain at 9.5% tax to GDP ratio base without external assistance adding as per the international benchmarks. Hence, there is a dire need to enhance tax to GDP ratio. He also underscored the importance of doing away with the undocumented economy with end-to-end digitisation to reduce human intervention as much as possible make the tax mechanism transparent and mitigate chances of corruption. The minister admitted that the Federal Board of Revenue (FBR) could not
do compliance and enforcement to the extent it should have done. He said the government had introduced progressive taxes in the federal budget for the upcoming fiscal year 202425 to tax more those having high income. He said the country needed to move in the direction of broadening the tax base to make the economy sustainable therefore, it was imperative to bring into the tax net the retailers and wholesalers to share the burden. The minister said the government had launched a tax scheme for retailers and wholesalers and they were offered registration on a volunteer basis, however, it was termed unsuccessful as of April 2024. In May, he added, the FBR workforce mobilised itself and as of now, around 31,000 retailers had registered themselves with the scheme. He said, the registration would continue and tax would also be imposed from July 2024. “We have no other option but to get this sector into tax net,” he remarked. The minister said that the Point of Sale (PoS) scheme would be re-launched
Defence budget sees 17.62% rise to Rs2,122 billion for FY2024-25 g
PROPOSED DEFENCE BUDGET REPRESENTS 11.24% OF TOTAL FEDERAL BUDGET OUTLAY OF RS18.877TR
The International Monetary Fund (IMF) has expressed its satisfaction with Pakistan’s budget for the next fiscal year. Express News reported, quoting sources, that the global lender had recommended eliminating all tax exemptions in the budget, which includes removing exemptions exceeding Rs 3 trillion. Pakistan is in talks with the IMF for a loan of $6 billion to $8 billion to bolster its foreign exchange reserves and meet other financial obligations. Implementation of the new program is expected soon, with a stafflevel agreement with the IMF likely to be signed in June or July. To expand the tax net, the Federal Board of Revenue (FBR) will enhance its enforcement measures, aiming to collect tax revenues exceeding Rs3.8 trillion in the upcoming fiscal year. The income tax structure for the salaried class has been aligned with international standards as per IMF’s recommendations. Technology will be used to prevent tax evasion, and to do away with cash transactions. To a question about the Petroleum Development Levy (PDL), he said it would be increased gradually and in accordance with international oil prices. The minister said that the exemption and 35% category of salary slabs were intact, adding that there was a
energy subsidies will be limited, with consumers charged the full cost of production. Sources further disclosed that political parties will refrain from politicising the IMF program, and provincial governments will fully implement the new measures. On Wednesday, the federal government presented the budget for fiscal year 2025 with a total outlay — the sum of expenditures and net lending of funds — of Rs 18.877 trillion, representing a 30% increase from the previous year’s budget. The government has proposed Rs 17,203 billion for current expenditure in the FY25 budget, a substantial 29% increase from the previous year. To meet these expenditures, the government has set an ambitious target of over Rs 13 trillion from taxation. To increase the non-tax revenue, the government proposed to jack up the Petroleum Development Levy (PDL) by Rs 20 to Rs 80 at maximum capacity. The government is hoping to collect a massive Rs 1.3 trillion through the levy even though it will mean a significant increase in the price of petrol. change in other slabs falling between. The government took up tax for non-salaried personals up to 45%, he added. Talking about youth development, the minister said Pakistan was having third third-largest freelancer population in the world.
PM Shehbaz proposes committee for political dialogue
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VISITS JUI-F CHIEF’S RESIDENCE, LAUDS HIS EFFORTS FOR PROTECTION OF DEMOCRATIC VALUES
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The federal government proposed a Rs2,122 billion defence budget for the fiscal year 2024-25, marking a 17.62% increase over the estimated allocations of Rs1,804 billion for the fiscal year 2023-24. The budget documents indicate a Rs318 billion rise in the defence budget compared to the previous year, but a reduction in its percentage share of the total outlay. The proposed defence budget now represents 11.24% of the total federal budget outlay of Rs18.877 trillion, down from 12.47% of the total outlay of Rs14.46 trillion for the previous year. A significant portion of the defence budget, Rs815 billion, is allocated for employee-related expenses, including salaries and allowances. This is up from Rs715 billion in the fiscal year ending June 30, 2024, reflecting the finance minister’s announcement of a 22 to 25% salary increase for government employees. Other budget allocations include Rs548 billion for physical assets, Rs513.3 billion for operational expenses, and Rs244 billion for civil works. The federal government has proposed allocations of Rs1,009 billion for the Pakistan Army, Rs230.3 billion for the Pakistan Navy, Rs451 billion for the Pakistan Air Force, and Rs431.4 billion for other establishments. In comparison, India’s defence budget announced in February this year stands at $75 billion, nearly 10 times higher than Pakistan’s proposed defence budget of $7.59 billion.
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ISLAMABAD STAFF REPORT
Prime Minister Shehbaz Sharif has proposed the formation of a committee for resolution of political issues through bilateral cooperation and dialogue. PM Shehbaz made the proposal while talking to JUI-F Chief Maulana Fazlur Rehman during a visit to the latter’s residence in Islamabad on Thursday. The premier inquired after the health of Maulana Fazlur Rehman and appreciated JUI-F’s religious services. According to a statement issued by the Prime Minister’s Office (PMO), the premier was warmly
welcomed by the JUI-F chief. He said that Maulana Fazlur Rehman had always promoted peaceful struggle for the protection of democratic values in the country. During the visit, the prime minister also commended the senior politician for his significant religious contributions. The visit comes amid ongoing talks about political negotiations in the country. The opposition party PTI has already expressed its willingness for the dialogue. Earlier upon arrival, the JUI-F chief, his brother and other leaders received the Prime Minister. On May 19, JUI-F chief
Maulana Fazlur Rehman had confirmed to have sought guarantees from the PTI before joining the latter’s opposition alliance, the Tehreek Tahafuz Aain-e-Pakistan (TTAP). In a joint press conference with PTI leaders following their meeting in Islamabad on May, 19 night, the JUI-F chief said his party had not yet decided to join the opposition alliance, but acknowledged the ongoing efforts to persuade it to do so. When asked by a journalist if the JUI-F had sought any guarantees from the PTI before starting an anti-government movement, Fazl replied in the affirmative. “Yes, when serious negotiations are held, certain measures are necessary to build trust.” Earlier on May 2, Maulana Fazlur Rehman once again rejected the results of the general elections and demanded fresh polls, citing ‘widespread rigging and irregularities’. Addressing a public gathering in Karachi, Maulana Fazlur Rehman said that assemblies were ‘sold’ in February 2024 elections. “Sindh Assembly and President House were also sold,” he added. The Jamiat Ulema-e-Islam-Fazl (JUI-F) chief demanded for immediate re-elections to ensure the integrity of the democratic process.
Punjab presents Rs5.4tr ‘tax-free’ budget PROFIT INP
Punjab Finance Minister Shujaur Rehman presented the provincial ‘tax-free’ budget for the fiscal year 2024-25 with a total outlay of 5.44 trillion amid protest by the Sunni Ittehad Council (SIC). The finance minister laid before the House Rs 5446 billion budget with a surplus Rs 630 billion. He said that 77 new mega projects will be launched under the annual development plan. Just like the centre, the Punjab government also proposed a raise of up to 25 percent its employees’ salaries while the pension of retired employees is proposed to be raised by 15 percent. The workers’ minimum wage has been proposed to be raised Rs 37,000 from Rs 32,000. In his budget speech, Shujaur Rehman claimed that no new taxes are imposed while existing taxes are not increased in the budget. According to the budget documents, Rs 6 billion is earmarked for laptop scheme, Rs 5 billion endowment fund, Rs 268 billion for supplementary grants, Rs 26 billion for the supplementary budget statement of the financial year 2023-24, Rs 26 billion rupees for agricultural equipment, and Rs 10 billion Kisan card. Similarly, the Punjab government fixed Rs 30 billion for CM green tractor program, Rs 80 billion for CM district SGD program, Rs 2 billion for livestock card, Rs 2 billion for Himmat and Nighaban card, and Rs 26 billion for restructuring education project.
Govt projects Rs32.6b from 4G/5G licenses in 2024-25 budget PROFIT
MONITORING DESK
The federal government has budgeted Rs32.612 billion from 4G/5G licenses under non-tax revenue for the fiscal year 2024-25. This amount is a substantial increase from the Rs7.597 billion budgeted for the outgoing fiscal year, which was later revised upward to Rs30.941 billion. According to the 2024-25 budget documents, the government also plans to generate Rs10 billion from the mobile handset levy, consistent with the initial budget for the outgoing fiscal year, which was later revised to Rs8 billion. Under the income from property and enterprise, specifically the Pakistan Telecommunication Authority (Surplus), the government projects revenue of Rs1.2 billion for the next fiscal year. This is a decrease from the Rs1.628 billion budgeted for the outgoing fiscal year, which was later revised to Rs2.802 billion. Additionally, the government has budgeted Rs10.036 billion from regulatory authorities (surplus/penalties) for the 2024-25 fiscal year, compared to Rs7.203 billion in the current fiscal year, which was later revised to Rs1.168 million.
Govt likely to further reduce fuel prices PROFIT
NEWS DESK
The federal government is expected to ease the financial burden on consumers by reducing petrol prices by up to Rs9 per litre starting June 16. Reports indicate that diesel and kerosene prices may also decrease, with reductions of Rs4 and Rs2 per litre, respectively. Earlier this month, the government had already reduced petrol and highspeed diesel (HSD) prices by Rs4.74 and Rs3.84 per litre. It is now anticipated that a further reduction of Rs12 per litre for petroleum products could be implemented from June 16, reflecting the downward trend in global oil prices. Sources suggest that the final decision will be based on global oil prices as of June 13 and 14, calculated by the Oil and Gas Regulatory Authority (Ogra). This potential price cut is part of the government’s ongoing efforts to shield consumers from the impacts of volatile international energy markets and fluctuations in the rupee-dollar exchange rate. Earlier, during a post-budget press conference in Islamabad, Foreign Minister Muhammad Aurangzeb mentioned that the Petroleum Development Levy (PDL) would be increased gradually in line with international oil prices.
Govt moves SC against acquittal of Imran, Qureshi in Cypher Case ISLAMABAD
STAFF REPORT
The federal government on Thursday moved the Supreme Court, challenging the acquittal of PTI founder Imran Khan and former foreign minister Shah Mahmood Qureshi in the cypher case by the Islamabad High Court. The government, in its petition to the apex court through the interior secretary, challenged the IHC verdict that prayed for the leave to appeal to be granted and for the plea to be turned into an appeal in the “best interest of justice”. The petition argued that the IHC order was “perverse, arbitrary and contrary to the material available on the record” and thus liable to be set aside. It argued that the Official Secrets Act (OSA), 1923 did not provide the provision of filing an appeal against the judgment of the special court judge and that the IHC did
not “appreciate” that it lacked the jurisdiction or power to create rights which were not provided by the Constitution or a validly enacted law. The govt petition said that the act did not say that the provisions of the Pakistan Criminal Law (Amendment) Act, 1958, would be applicable for filing an appeal. “It is an established principle of law that where the legislature has not provided something in the language of the law, the court cannot travel beyond its jurisdiction and read something to the law as the same would be ultra vires the powers available to the court under the constitution and would constitute an order without jurisdiction,” it argued. It further said that the special law would have an overriding effect on the general law and thus the criminal procedure code was not applicable in the case of those tried for offences under the OSA. “The conduct of the respondents was
non-cooperative throughout the trial and they made very possible efforts to delay the proceedings. The record of the trial court is evidence of the fact that 65 miscellaneous applications were moved by the respondents were heard and decided by the trial court. In 2023, the Federal Investigation Agency (FIA) had registered the Cypher Case, centred on a diplomatic cable received from the US, against the former premier Imran Khan and former foreign minister Shah Mahmood Qureshi. In the case, the FIA alleged that a copy of the diplomatic was never returned by then-PM Imran, who long held that the document contained a threat from the US to topple his government. A special court, established under the Official Secrets Act, had sentenced both Imran and Qureshi to 10-year in jail in the case in January after Judge Abual Hasnat Zulqarnain appointed a state counsel for them.
Last week, Islamabad High Court (IHC) Chief Justice Aamer Farooq and Justice Miangul Hassan Aurangzeb had acquitted the
duo after accepting the appeals of the former premier and the former foreign minister against their convictions in the case.