BUDGET 2022 2023

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Sindh Budget: A typical PPP budget​

Afshan Subohi
June 20, 2022

Chief Minister Murad Ali Shah who also holds the portfolio of the finance minister in Sindh presented a typical PPP budget last week, high on promises to shield the people of the province from the vagaries of hard economic times.

There is nothing in the budget that suggests any resolve on the part of the ruling party to unlock the development potential of the province by extending the industrial base to smaller towns for employment generation and better harnessing the resource base, curbing market distortions for competition that promotes innovation and efficiency or expanding the tax base to net agriculture income.

Similarly, reforming the government framework to check resource slippages, improving the system of economic data collection for better insight into the provincial economy to identify triggers and barriers to development, putting in place structures to improve the government’s capacity and improving the effectiveness of resource deployment, are off the agenda as well.

Presumably happy with himself and his party, Chief Minister Shah saw no compulsion to deviate from the beaten path that has landed Sindh where it is today — behind Punjab by a distance that has increased under his rule while the people of Sindh continue to wait for the promised want-free future. There might be some improvement in the quality of life in Sindh over time but people deserve better, especially when the post-National Finance Commission federal resource transfers to Sindh multiplied many folds.

The provincial government continues to walk on the beaten path that has landed it firmly far behind Punjab

The 1.7 trillion tax-free deficit Sindh budget gives a generous increase in salaries and a 5 per cent increase in pension of provincial employees, raises education and health allocations significantly, promising an extension in its social security net. Probably keeping the next general elections in sight, the funds for Karachi (neglected for long) have been doubled to Rs118 billion.

The total revenue receipts in the budget are projected at Rs1.7tr posting a deficit of Rs33.8bn. The province will raise barely Rs374bn from provincial taxes against Rs1.05tr federal transfers and the rest is projected to be raised from provincial non-tax and current capital receipts, federal grants and foreign assistance.

Sindh was ahead of other provinces in terms of percentage allocations to education, health and social security for the last few years. By allocating almost one-fourth of the budget, Rs326bn to education and Rs207bn to health, its allocations are 14pc higher than the outgoing year. By setting aside Rs29bn for social protection, the trend has strengthened.

How well education, health and social protection budgets are deployed in the province is another story. Sindh’s comparatively low performance on social indicators is a sad commentary on the state of affairs. The province is lagging behind Punjab in most, and KP in some, key social indicators.

The Annual Development Plan has been increased by Rs110bn from Rs222.5bn last year to Rs332.1bn in the current budget. There are 4,158 total development schemes mentioned, 2,506 ongoing and 1,650 new ones. About 76pc of the ADP of Rs253.1bn is dedicated for the ongoing ones and the remaining Rs79bn for new schemes.

Again, the quality of life, be it the provision of basic amenities or services, the track record of Sindh leaves much to be desired.

There is no indication in the budget of any movement towards financial devolution and transfer of resources to districts and local tiers of the government.

A senior economist termed the current budget ‘uneventful’. In her perception, the PPP government has shifted focus away from major cities and towards neglected districts, which she appreciated.

“Punjab feels like another country. This is very embarrassing. The provincial government needs to put its act together and shun tried tested and failed strategies. Unless they prioritise development, get ready to shake off outdated ideas and purge rent-seekers from their ranks, I see no scope for fast pace regionally equitable growth and transformation in this province.

“Talking market economy is not sufficient. We need to remove barriers to free market for industrial, trade and agriculture development and a higher rate of capital formation is necessary for sustainability.”

A former president of the Karachi Chamber of Commerce and industry, not a huge fan of PPP, was mild in his assessment this year. “The chief minister has finally realised that Karachi can’t be ignored if his party wishes to bag more seats in the Parliament.” He appreciated the higher budget allocation for Karachi but was particularly happy over the attention to industrial areas.

“It is heartening to note that the government allocated Rs1.3bn to reconstruct and rehabilitate roads in SITE (Sindh Industrial Trading Estate). I hope work proceeds speedily.” He mentioned Rs4bn booked for procuring buses for Karachi and Sukkur and hoped for resolution of water supply problems in the mega city.

“I appreciate the allocation of Rs9bn for rehabilitation of evicted families settled along nullahs of Karachi and hope for timely completion of projects.”

 

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Balochistan presents Rs612bn budget with ‘no new taxes’​

• Province expects to earn Rs540bn and spend Rs612.79 bn in 2022-23

BR
22 Jun, 2022

The government of Balochistan on Tuesday presented the provincial budget 2022-23 with an outlay of Rs612 billion and announced that no new taxes have been imposed. The theme of the budget is “fostering sustainability and inclusive growth”.

While presenting the budget, Balochistan Finance Minister Sardar Abdul Rehman Khetran said that Rs367 billion have been earmarked for non-development expenditure while Rs191.5 billion have been set aside for development expenditure. The province expects to earn revenue of Rs540 billion in 2022-23 and spend Rs612.79 billion.

The finance minister also announced 15% increase in the salaries of government employees and underlined that the provincial leadership would create 2,851 new jobs for the youth in fiscal year 2022-23.

He highlighted that Rs38 billion have been allocated for health while education expenditure will amount to Rs70 billion in 2022-23.

“The government has set aside Rs44 billion for safety and security and Rs450 million have been allocated for irrigation,” he said. “Out of Rs450 million grant announced for irrigation, Rs3.47 million will be spent on non-development schemes and Rs29 billion will be spent on development initiatives.”

In the agriculture sector, Rs2.9 billion have been set aside to provide interest free loans to farmers for wheat procurement.

According to him, Rs2.5 billion will go towards Balochistan Pension Fund and Rs1.75 billion will be spent on Food Security Revolving Fund. In addition, Rs2.9 billion have been earmarked for provision of food subsidy.

Moreover, the provincial government will spend Rs2.5 billion for land revenue management information system and Rs1.48 billion for Gwadar Safe City Project Phase 1.

Additionally, Rs250 million have been allocated for establishment of Hub Special Economic Zone and Rs500 million for development of Ziarat town.

Delay

On Monday, the government of Balochistan postponed the budget 2022-23 announcement to Tuesday June 21 as lawmakers of the province failed to reach a consensus, reported Aaj News.

According to reports, the government was unable to finalise the budget as lawmakers demanded development schemes for their respective areas.

But the CM secretariat said the reason was that Chief Minister Mir Abdul Quddus Biznejo is busy with the Balochistan Awami Party council session.

 

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Budget 2022–23 Major Macro Targets Revised Before Parliament Approval​

By Zakir Ahmed
Jun 22, 2022

The Budget Outlay for the financial year 2022–23 has been increased from Rs. 9.5 trillion to Rs. 9.9 trillion after talks with the International Monetary Fund (IMF) in addition to raising the tax collection target for the Federal Board of Revenue (FBR) to Rs. 7.426 trillion from Rs. 7.004 trillion.

The major macro targets will be finalized with the IMF and State Bank of Pakistan (SBP) within the next few days.

The categorical breakdown of the revised tax collection targets reveals that an income of more than Rs. 300 million per year will be taxed at the rate of four percent, which is double the originally proposed two percent.

Similarly, per the revised proposal, income over Rs. 150 million per year will be taxed at one percent, incomes of more than Rs. 200 million per year will be taxed at two percent, and incomes of over Rs. 250 million per year will be taxed at three percent.

Furthermore, the 15 percent increase in salaries and the five percent increase in pensions will be reversed, with the funds going to the contingency fund.

The tax collection target on pensions has been increased from Rs. 530 billion to Rs. 609 billion and civilian government expenditures have been revised from Rs. 550 billion to Rs. 600 billion.

The FBR collection base for FY22 has been changed to Rs. 6,100 billion from Rs. 5,818 billion. Likewise, the petroleum levy target has been decreased from Rs. 750 billion to Rs. 550 billion and the customs duty collection target has been revised to Rs. 953 billion from Rs. 1,005 billion.

The Gas Infrastructure Development Cess (GIDC) collection target of Rs. 200 billion has been reverted due to litigation, and lastly, the relief of Rs. 47 billion on the personal income tax target has been abolished.

 

[Jango]

Furthermore, the 15 percent increase in salaries and the five percent increase in pensions will be reversed, with the funds going to the contingency fund.

..........the relief of Rs. 47 billion on the personal income tax target has been abolished.

What the F?

The whole of N league was tweeting on that day including Maryam that Shahbaz Sharif has in these tough times increased pensions and salaries, aur N leage nay isi baat par shabash karwayi thi media par.

Now they silently remove this?

 

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Finance Minister Miftah Ismail elaborated on Friday that the government’s recently-announced indirect tax (super tax) is aimed to helping the state accumulate funds under the head of tax collection and narrow down the budget deficit.

He was referring to the 10% poverty alleviation tax, or super tax, imposed on large industries. The announcement was made by Prime Minister Shehbaz Sharif on Friday morning.

Speaking in the National Assembly, Miftah said that this tax is a one-time levy, and will be imposed on 13 sectors ie sugar, cement, steel, textile, tobacco, fertiliser, bank, oil and gas, beverages, automobile, chemical, airlines and LNG terminals.

“These 13 industries made huge profits last year and hence, they were identified by the government for super tax,” he said.

He added that companies earning more than Rs300 million within these sectors would pay 10% super tax.

“This tax is a one-time levy and it will only be applicable for fiscal year 2022-23,” he said.

Taking to twitter, he clarified that the super tax of 4% will be applicable to all sectors.

 

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Rs80b ‘burden’ passed on to salaried class​

Govt caves into IMF demand, sets income tax rate of 2.5% for those earning up to Rs100,000 a month and 35% on Rs1m

Shahbaz Rana
June 24, 2022

On June 10, Finance Minister Miftah Ismail had announced an income tax relief of Rs47 billion for the salaried class.

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ISLAMABAD: The government has caved in to the demand of the International Monetary Fund (IMF) and passed on the burden of Rs80 billion on the salaried class by increasing their tax rates and withdrawing the relief announced hardly three weeks ago.

It has set the minimum income tax rate of 2.5% for those earning up to Rs100,000 a month as well as a maximum of 35% on the monthly income of over Rs1 million, according to the proposed amendments to the Finance Bill 2022.

The coalition government has reversed its two earlier decisions to exempt up to those with earning Rs100,000 a month from income tax and rolled back its move to reduce the highest income tax rate from 35% to 32.5% after the IMF refused to budge on its demand.

On June 10, Finance Minister Miftah Ismail had announced an income tax relief of Rs47 billion for the salaried class.

The coalition government has not only withdrawn the relief but also imposed Rs33 billion in net additional taxes in comparison with June 2021 for the salaried class, throwing a burden of Rs80 billion on them.

The IMF had proposed to tax the upper middle and rich income groups, which earn in the range of Rs104,000 to Rs1 million a month at a single rate of 30%, which the government did not accept.

The new rates are still lower than the initial demand that the IMF had put before the last government of the PTI.

The IMF had demanded an unjustified rate of 30% to be charged from persons earning Rs100,000 to Rs1 million a month to collect an additional Rs125 billion from the salaried class.

“We tried to get maximum concessions from the IMF for the salaried class but it did not completely accept our position,” Miftah told The Express Tribune. He added that the net additional impact on the salaried class was Rs33 billion a year.

About 1.24 million salaried people have filed income tax returns for the tax year 2021. Of them, 333,000 fall in the income tax exemption slab of Rs50,000 per month. This slab is still exempted.

The government has now proposed a 2.5% income tax rate on up to Rs100,000 monthly income as against nil tax proposed on June 10. This is still half of the rate the salaried class paid in the outgoing fiscal year.

The government has proposed a 12.5% income tax rate for people earning up to Rs200,000 a month –which is 78% higher than that proposed on June 10. The finance minister had earlier vowed that he would not put an additional burden on those with a Rs200,000 monthly income.

For the outgoing fiscal year, the salaried persons were paying 10% for up to Rs150,000 monthly income and 15% on up to Rs208,000 monthly income.
For the fourth slab carrying people of up to Rs300,000 monthly income, the government has now set 20% income tax rate as against 12.5% proposed on June 10 -- an additional burden of 60% in comparison with the three-week old rate. The existing tax rate for this income group was 17.5%.

Last month, inflation in Pakistan stood at 13.8%, which is expected to spiral due to many taxation measures like the Rs50 per litre petroleum levy.

On a monthly income of Rs500,000 -- the fifth slab -- the government has proposed 25% income tax as against the three-week old rate of 17.5%.

For people earning over Rs1 million a month, the government has proposed a 32.5% rate -- up from 22.5% from three weeks ago. For the outgoing fiscal year, the tax rate for this slab was 25%. However, the IMF had proposed a 35% rate for them earlier.

There are over 6,000 individuals, who earn up to Rs1 million a month.

For those who earn over Rs1 million a month, the government has now proposed a 35% income tax rate -- up from the three-week old rate of 32.5%. The finance minister said in the country, there were hardly 12,000 people, who had declared a monthly income of over Rs1 million.
At present, people earning over Rs1 million a month to Rs2.5 million were paying 27.5% income tax rate.


The revision in tax rates for the salaried class is expected to bring Pakistan and the IMF more closely to each other.

However, the IMF has not yet shared the draft of the Memorandum for Economic and Financial Policies (MEFP).

The government expects to receive the MEFP document either on Friday night or Monday.

 

[Jango]

This new budget is TOTALLY different from what was there before.

N league got plaudits for exempting those earning upto 100,000 a month, and increasing salaries, and it has reversed both of these measures jab IMF ka danda aya hai.

Wohi baat hai, they want to keep on taxing the already taxed, while on the other hand they do not want to tax their voter base, is liay un ko flat tax 10,000 ka day dia hai. It is a JOKE...10,000 tax for a retailer, absolute joke.

And I am quite surprised to see the quietness in this thread...perhaps this is how these guys loot and plunder the country, by these cunning and deceitful measures which aren't all that flashy, but twice as damaging.

 

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Wohi baat hai, they want to keep on taxing the already taxed, while on the other hand they do not want to tax their voter base, is liay un ko flat tax 10,000 ka day dia hai. It is a JOKE...10,000 tax for a retailer, absolute joke.

The proper solution is to apply the same tax bands uniformly across all types of income, be it salary, retail, agriculture, capital gains etc.

 

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BUDGET 2022-23: Govt eyes coffers of wealthy to appease IMF​

Mubarak Zeb Khan
June 25, 2022

• 10pc ‘super tax’ on 13 large industries to generate Rs465bn
• High net worth individuals subject to ‘poverty alleviation tax’
• Rs50 per litre levy on petroleum products
• Tax exemption limit revised from Rs1.2m to Rs600,000

ISLAMABAD: The coalition government announced new tax measures on Friday, including a 10 per cent “super tax” on 13 large industries to raise an additional Rs465 billion in revenue, in an attempt to trim the budget deficit to revive the stalled International Monetary Fund (IMF) loan programme.

High net worth individuals will also be subject to a “poverty alleviation tax”.

Those whose annual income exceeds Rs150 million will be taxed at 1pc; for Rs200m at 2pc; Rs250m at 3pc; and Rs300m at 4pc of their income.

The announcement comes amid hopes that the country will soon clinch an agreement to unlock a new tranche of IMF funds, which are needed to avert a balance-of-payments crisis.

After he announced the super tax in his morning address to the nation, Prime Minister Shehbaz Sharif’s speech triggered a nosedive at the Pakistan Stock Exchange, as its benchmark KSE-100 index saw a sharp 2,053-point drop before trading was halted. As of noon, it stood at 40,663.62, down 4.81pc.

Finance Minister Miftah Ismail later clarified on Twitter that the “super tax” was a “one-time tax needed to curtail the previous four record budget deficits”. He elaborated further in his speech in the National Assembly, where lawmakers had gathered to conclude the budget session.

The government also intends to apply a maximum petroleum levy of Rs50 per litre on all petroleum products, including petrol and diesel, besides a levy of Rs30,000 per tonne on liquefied petroleum gas.

At the same time, the Rs47bn tax relief announced by the government in the next year’s budget for salaried citizens has also been reversed. The tax exemption limit has been reversed to Rs600,000 from Rs1.2 million, whereas the fixed tax of Rs100 has been replaced with a 2.5pc tax for individuals earning between Rs600,000 and Rs1.2m.

In its first budget, the current government avoided taking unpopular tax measures for fear of political backlash. However, it had to roll back several relief measures after the IMF asked Islamabad to take practical measures to stabilise the economy.

The revenue measures announced on Friday are in addition to taxes worth Rs440bn announced on June 10, meaning the net revenue measures announced in the 2022-23 budget now amount to Rs905bn.

It is also estimated that the bulk of the revenue of more than Rs400bn will come from expected 12.8pc inflation in 2022-23 fiscal year, while the remaining will be contributed by economic growth.

The government has also increased the Federal Board of Revenue’s (FBR) tax collection target from Rs7.004 trillion to Rs7.47tr after extensive negotiations with the IMF technical team. However, the target for non-tax revenues has been revised down to Rs1.94tr from Rs2tr.

Tax measures

Addressing the nation on Friday after a meeting with his economic team, the premier announced a 10pc “super tax” on large-scale industries in a bid to shore up revenues for supporting the country’s poor amid rising inflation.

The 13 industries to be taxed include cement, steel, sugar, oil and gas, fertilisers, LNG terminals, textile, banking, automobile, cigarettes, beverages, chemicals and airlines.

The PM said these sectors had earned significant profits this year. Entities in the rest of the sectors will have to pay this one-time additional tax at the rate of 1pc to 4pc on their income.

In the budget, a 2pc super tax was also announced on an annual income exceeding Rs300m, which has now been revised.

An additional 1pc tax would be imposed on individuals and entities earning between Rs150m and Rs200m a year on account of poverty alleviation.

Similarly, those earning Rs200m to Rs250m would be taxed at the rate of 2pc, from Rs250m to Rs300m at 3pc and those earning above Rs300m at 4pc.

“This is a one-time tax for the fiscal year 2022,” he added.

Fixed tax for retailers

Later, addressing a National Assembly session convened to wind up the budget debate, Finance Minister Ismail announced a new fixed tax scheme on shops outside of the tax net to reduce the budget deficit and elaborated on the super tax.

He said the country was no longer on the way to default as it was on the path to progress and informed the lower house that there are around nine million retail shops in Pakistan and the government wanted to bring 2.5m to 3m of them into the tax net. For this, a new fixed scheme has been introduced under which a small shop owner will pay a fixed tax of Rs3,000 and big retailers Rs10,000 per month.

“After that, they will not be questioned on anything else,” the minister added.

The retailers dealing in gold and had shops of 300 square feet or less would have to pay a fixed income and sales tax of Rs40,000, which was reduced from Rs50,000. For bigger shops, the sales tax had been reduced from 17pc to 3pc, he added.

The withholding tax on gold sold by individuals to goldsmiths has been reduced from 4pc to 1pc. A similar scheme of fixed tax will be announced for realtors, builders and car dealers.

He said the government had withdrawn the condition of withholding tax on IT companies with sales of less than 80m. The tax on venture capital funds invested in the IT sector has also been removed.

As for oil marketing companies, the minimum tax has been reduced to 0.5pc from 0.75pc.

Overseas Pakistanis who held the Nicop identity card would be considered included in the list of active taxpayers so that they did not have to pay any additional taxes when buying a property, Mr Ismail said, adding that a provision of 50pc reduction in capital gains tax for those who had been allotted plots while in services was initially removed from the budget, but now it had been restored.

Families of martyrs and war-wounded individuals would be exempted from tax on income from plots, he said and added that sales tax on skin and hides and surgical instruments had also been removed.

Salaried class

As per the proposed upward slab, people earning Rs600,000 to Rs1.2m per year will pay a tax of 2.5pc, whereas those earning Rs1.2m to Rs2.4m will pay a 12.5pc tax instead of 7.5pc last year.

Individuals earning Rs2.4m to Rs3.6m a year will be charged at Rs165,000 plus 20pc of the amount exceeding Rs2.4m.

Those earning Rs3.6m to Rs6m a year will be charged at Rs405,000 plus 25pc of the amount exceeding Rs3.6m.

People with an annual income of Rs6m to Rs12m will be charged at Rs1.005m plus 32.5pc of the amount exceeding Rs6m.

In the last slab, individuals earning more than Rs12m a year will be charged at Rs2.955m plus 35pc of the amount exceeding Rs12m.

‘Rich will have to do their part’

PM Shehbaz said the steps taken in the budget were designed to ease the burden on the poor. “As for the classes who are blessed, today, this nation is demanding of them to also work hard, to come forward and to make Pakistan prosperous and progressive,” he added.

In his speech on Friday, the premier called on the wealthy to “distribute” some of their wealth and “relive the memory of Ansar-i-Madina”. “This is your responsibility, and the nation demands it of you,” he said.

Referring to his predecessor Imran Khan’s “shackles of slavery” remarks, PM Shehbaz said economic stability and economic freedom were the only true ways the “shackles of slavery would be broken”.

Published in Dawn, June 25th, 2022

 

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Balochistan budget passed without objections​

Saleem Shahid
June 30, 2022

QUETTA: The Balochistan Assembly has passed a Rs598 billion budget for the next fiscal year without facing any objection from either side of the aisle.

The session, which started one hour and 45 minutes behind schedule, was presided over by Deputy Speaker Sardar Babar Khan Musakhail.

Balochistan Finance Minister Sardar Abdul Rehman Khetran presented 102 demands for the draft in the house one by one. Of all, 60 demands for the draft of over Rs351.2bn belonged to non-development expenditure, while 42 demands for the draft of over Rs246.9bn were for the development programme.

Opposition members belonging to BNP-Mengal, JUI-F and PkMAP were present in the house when Sardar Khetran moved the demands for the draft, but none of them submitted any cut motion, which enables assembly members to oppose a specific allocation in budget proposals.

No cut motions presented in house for only second time in province’s history

It was the second time in the Balochistan Assembly that no opposition member submitted a cut motion or opposed the demands for the draft after 1985, when military dictator Gen Ziaul Haq had conducted nationwide elections on a non-party basis and there was no opposition in the provincial assembly.

However, in yesterday’s session, opposition members — who are coalition partners in the nine-party alliance government at the Centre — walked out of the assembly on the issue of power outages but later returned to the house.

Opposition members expressed their satisfaction with the budget presented by Mir Abdul Qudoos Bizenjo-led coalition government in the province and described it as a “balanced document”. They acknowledged that uplift funds were allocated to all districts and no constituency was ignored in the Public Sector Development Programme (PSDP) for the next financial year.

The treasury benches also welcomed the development budget, which they said was based on the development of the entire province, whereas maximum development schemes identified by MPAs in their constituencies were included in the PSDP.

‘People-friendly’

Balochistan Chief Minister Bizenjo said the budget passed in the assembly was prepared with the vision to develop the entire province, as it belonged to the people of the province and not only the ruling party and its allies.

He said a parliamentary committee of the province would visit Islamabad to resolve power and gas crises and issues pertaining to the development affected by insurgency.

“We will ask Islamabad to bear our burden of the expenditure we are spending on law and order,” Mr Bizenjo said. He said the provincial government would make all efforts to prove the budget “people-friendly” by providing them with maximum relief.

Budget allocations

In the development budget, unanimously approved by the house, the government has made the highest allocation of Rs49.69bn for the communication and works sector to construct a road network in the province. Another large amount of Rs48.33bn has been allocated for pension payment.

The provincial government will spend Rs63.44bn on secondary education, while Rs39.64bn has been allocated for federal-funded projects. Another Rs14.9bn has been included in the PSDP for foreign-funded projects.

The provincial government will spend Rs23.99bn on police and Rs14.9bn on Levies Force. The government has allocated Rs18bn for capital investment and will also approve Rs6.81bn for internal trading.

Besides, Rs22.87bn will be spent on public health engineering. The house has also approved Rs23.54bn for improving health sector facilities. The government will also provide Rs18.46bn for the local government in 2022-23.

Published in Dawn, June 30th, 2022

 

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IMF pushes Pakistan in a tight spot​

Shares MEFP with govt, sets four tough prior conditions for revival of bailout package

Shahbaz RanaJune
29, 2022

A man walks past the International Monetary Fund (IMF) logo at its headquarters in Washington, US, May 10, 2018. PHOTO: REUTERS

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ISLAMABAD: To revive its stalled $6 billion loan programme, the International Monetary Fund (IMF) has set four tough prior conditions -- increasing electricity tariffs, the cabinet taking the decision to gradually impose Rs50 per litre petroleum levy to collect Rs855 billion, and ending the government’s role in determining the oil prices.

The demands came amid the government’s decision to seek the National Assembly’s approval on Wednesday (today) to amend the Petroleum Products (Petroleum Levy) Ordinance, 1961.

The law is proposed to be amended to slap Rs50 per litre petroleum levy on high-speed diesel, petrol, high octane blending component (HOBC), E-10 gasoline, superior kerosene oil and light diesel. It has also proposed Rs30,000 per metric tons liquefied petroleum gas levy.

The IMF has also asked Pakistan to set up an anti-corruption task force to review all the existing laws that were aimed at curbing graft in the government departments, according to sources.
After implementing the conditions, the IMF would present Pakistan’s request for the approval of the loan tranche and revival of the programme to its executive board – a process that may consume another month, the sources added.

In its draft Memorandum for Economic and Financial Policies (MEFP) document, the IMF has proposed to club the two pending programme reviews – the 7th and 8th – but did not indicate that it would also approve loan tranches of $2 billion.

The MEFP will form the basis for the staff level agreement that now Pakistani authorities will try to achieve at the earliest.

However, Finance Minister Miftah Ismail said Pakistan had received the MEFP document that showed the merger of the seventh and eighth reviews of bailout programme and the country would receive $1.9 billion loan after their approval. He has already informed Prime Minister Shehbaz Sharif about this development.

The existing IMF programme shows that the approval of the 6th and 7th review by the Executive Board of the IMF should pave the way for release of roughly $960 million worth of two loan tranches, totaling $1.9 billion. However, this schedule will be amended after the merger of the two reviews.

The sources said that in its draft MEFP document, the IMF did not mention to increase the loan tranche size to $1.9 billion. The issue of increasing the loan size will now be discussed by both the sides.

The finance minister told The Express Tribune that Pakistan had requested the IMF to double the loan tranche size to $2 billion. He said that nothing was final yet but the loan amount size could be around $1.5 billion.

Pakistan did not receive the complete MEFP and some of the important tables would be shared by the global lender in a couple of days. Pakistan and the IMF officials also held virtual discussions on Tuesday to seek further clarity on the draft MEFP.

The IMF’s decision to merge the 7th and 8th programme reviews was also surprising for Pakistani authorities, as no recent discussions had taken place on the topic, although Islamabad had made a request for the merger during Miftah’s visit to Washington.

In the recent past, Miftah had ruled out the possibility of the clubbing both the reviews.

Earlier, the IMF had also clubbed four reviews –second to fifth reviews- but without increasing the loan tranche size. The IMF had only given $500 million as against the $2 billion of four reviews.
The existing document showed that the 7th review was for the end December 2021 period and the 8th review was for January-March 2022 quarter.

The sources said that the MEFP has indicated that the global lender could extend the programme by June next year but there was no explicit mention.

An element of the concern was that the IMF was seeking six weeks’ time to take Pakistan’s case to the board -- a timeframe that Islamabad wished to cut down.

The IMF has asked Pakistan to end the government’s role in setting the fuel prices after the bitter experience of giving fuel subsidies of over Rs300 billion, according to the sources. The global lender has set a prior condition that the fuel prices will be deregulated and automatically adjusted to recover the actual cost of buying from the consumers. The government’s taxes will be over and above the global prices. This means the petrol price may daily change at the filling station.

At present, the government fortnightly determines the fuel prices -- a discretion that the IMF now wants to be ended.

The IMF has set prior action of notifying over Rs3.50 per unit increase in electricity prices from July. The Economic Coordination Committee (ECC) of the cabinet has already approved to increase the electricity tariffs by Rs7.91 per unit in three phases but its final notifications remained pending.

Pakistan has committed to the IMF to impose Rs10 per litre petroleum levy on petrol and diesel from July 1.

The IMF has asked Pakistan to seek and communicate the cabinet’s nod to further increase the petroleum levy by Rs10 per litre on petrol and Rs5 on diesel from August 1.

The revised budget documents that the government presented in the National Assembly on Tuesday showed that the petroleum levy target has now been set at a record Rs855 billion –up from Rs750 billion proposed on June 10.

The government has also made adjustments in expenditures and the total size of the budget is now Rs9.6 trillion.

The IMF has also set the condition that Pakistan should review its anti-corruption laws. The condition has been imposed after the recent amendments to the accountability law that unsettled the global lender.

However, these amendments were necessary to put a check on the National Accountability Bureau (NAB) that has crippled decision making as well as the mishandling of the bureaucracy, politicians and business circles.

 

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Rs164bn AJK budget approved amid opposition boycott​

Tariq Naqash
July 1, 2022

Azad Jammu and Kashmir Prime Minister Sardar Tanveer Ilyas addresses the legislative assembly on Thursday. — Photo by author

MUZAFFARABAD: The Azad Jammu and Kashmir (AJK) Legislative Assembly on Thursday approved Rs163.7 billion budget for the fiscal year 2022-23 without any disruption in the absence of the 20-member opposition.

AJK Finance Minister Abdul Majid Khan presented one after the other demands for grant of Rs135.2bn for recurring expenditures and Rs28.5bn for developmental activities in the house presided over by the ruling PTI’s Mohammad Rafique Nayyar as member of the panel of chairmen.

Since the opposition continued its boycott of the budget session, it was smooth sailing for Mr Khan as he did not face any cut motion.

The house also accorded approval to the revised budget for 2021-22 to the tune of Rs135.7bn, including Rs22.8bn for developmental activities.

PM Ilyas rebukes bureaucracy; monetary assistance given to Zakat recipients raised by Rs9,000

Demands for grant for additional expenditures beyond the approved budget for fiscal years 2019-20 to 2020-21 were also approved.

During the earlier part of the session, presided over by Deputy Speaker Chaudhry Riaz Gujjar, Prime Minister Sardar Tanveer Ilyas delivered an overlong speech, during which he made dozens of announcements about different sectors “with a view to ameliorating the living standards of the people of state”.

“I have no qualms about saying that Azad Kashmir will soon undergo a real change and people will see their dreams translated into reality,” he asserted.

He announced an increase of Rs1,500 per person in the monthly subsistence allowance of post-1989 Kashmiri refugees and added that 1,303 independent houses as well as a residential complex would be built for their rehabilitation with the assistance of the federal government. He said houses would also be built with the help of private sector and donors for the deserving families of martyrs from army and police.

The prime minister’s voice literally choked when he referred to the paltry sum of Rs3,000 given to Zakat recipients once a year and said it would be raised to Rs12,000. He also announced increasing the amount of dowry fund for poor girls to Rs75,000.

Announcing establishment of Quran academies in Muzaffarabad, Mirpur and Bhimber, PM Ilyas said vacant posts of muftis would be filled during next year. He also announced providing free electricity to mosques holding five prayers a day.

Vowing to improve the education sector on modern lines, the PM said that 86 primary, 56 middle and 61 high schools and 45 intermediate colleges would be upgraded.

The government would provide 1,000 scholarships to deserving students and impart vocational training to 1,200 people in the first phase in Punjab for promotion of cottage industry, he added.

 

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GB okays budget with outlay of Rs119.3bn​

Jamil Nagri
July 1, 2022 -


GILGIT: The Gilgit-Baltistan (GB) Assembly on Thursday approved the budget for the fiscal year 2022-23 (FY23) with an outlay of Rs119.3 billion.

Meanwhile, taking to the social media platform Twitter, the Office of the GB Chief Secretary in a series of tweets said that the creation of a revenue authority in GB was unanimously supported in the session.

“Today during the concluding session of the budget for the year 2022-23, the assembly of Gilgit-Baltistan has taken a giant step towards self-sufficiency by unanimously supporting the creation of Gilgit-Baltistan Revenue Authority (GBRA). Gilgit-Baltistan has a huge potential for collection of sales tax on services because of its booming tourism industry and other affiliated service based industries like transport, food etc,” the official tweeted. However this potential wasn’t maturing due to absence of an effective revenue collection system.

“GBRA will perform this function and immediately after its creation, revenue collection of billions of rupees can be envisioned. For GB this revenue collection potential can be a game changer.

Today all parliamentarians supported the creation of GBRA across party lines. GBRA will ensure that the incidence of taxes on local population is minimised and its primary focus will be to raise tax from tourism and its associated industries. Goal to make GB self-sufficient,” it added.


The GB annual budget was presented in the GB Assembly on Monday and was deliberated upon on Wednesday and Thursday. The sessions were chaired by Deputy Speaker Advocate Nazir Ahmed.

GB Assembly members from the opposition and treasury members debated the proposed budget on Wednesday and Thursday and got consensus to talk with the federal government on budget deficits and request the central government to increase funds for GB to overcome the Rs7bn deficit in the FY23 budget.

A total of 15 cut motions tabled by the opposition and Treasury members were approved.

Published in Dawn, July 1st, 2022

 

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KMC to get PKR 32 bn development budget for FY2022-23


Karachi: The Karachi Metropolitan Corporation (KMC) will get a PKR 32.21 billion development budget for the fiscal year (FY) 2022-23, news sources reported on June 30. The total receipts are estimated at PKR 32.21 billion, whereas the total expenditure is PKR 32.19 billion.

Reportedly, the budget was presented by Karachi Administrator Murtaza Wahab at a press briefing here at Khaliq Dina Hall. According to budget documents, the KMC would get PKR 32.21 billion, which includes current revenue of PKR 26.61 billion and capital receipts of PKR 0.5 billion, as well as PKR 5 billion in the District Annual Development Programme (ADP) sections.

Similarly, the Sindh government would transfer PKR 18.6 billion under the ‘OZD share’ and PKR 200 million under the entertainment tax, with liabilities of PKR 1.85 billion on KMC also scheduled to be remitted to KMC. Reportedly, the corporation is expecting to get PKR 1.477 billion in revenue from land enforcement, estate, Katchi Abadi regulation, PD Orangi, and parking taxes.

Expenditure
On the spending side, the KMC will spend PKR 32.195 billion on different city development projects:

• PKR 8.67 billion will be spent on non-development budget items such as pensions and miscellaneous expenses, including bail-out packages for subordinate departments
• PKR 5.756 billion has been allocated for medical and healthcare services
• PKR 3.943 billion has been allocated for municipal services
• PKR 2.72 billion will be spent on development projects
• PKR 2.079 billion has been allocated for the engineering department of KMC
• PKR 1.422 billion has been earmarked for land enforcement and Katchi Abadi welfare, including PD Orangi and parking
• PKR 1.184 billion has been allocated for parks and horticulture activities
• PKR 973 million has been allocated for culture, sports and recreation activities
• PKR 898 million has been allocated for the Finance and Accounts department
• PKR 888 million will be spent on the Competitive and Livable City of Karachi (CLICK)
• PKR 500 million has been allocated for the development of roads, sidewalks, sewerage lines, bridges, and intersections across the city
• PKR 271.38 million will be spent on road repair and rehabilitation
• PKR 250 million will be spent on the management of street lights on major roads
• PKR 184.23 million has been allocated for the law department
• PKR 172 million has been earmarked for the improvement of general infrastructure
• PKR 115 million has been set aside for the purchase of ventilators and medical equipment for KMC-managed hospitals
• PKR 85 million will be spent on the improvement of Karachi Zoo, and Safari Park, and the purchase of new animals