Pakistan’s finance minister says 43 percent economic sectors contribute less than one percent tax
Pakistan’s finance minister says 43 percent economic sectors contribute less than one percent tax/node/2569920/pakistan
Pakistan’s finance minister says 43 percent economic sectors contribute less than one percent tax
Pakistan Finance Minister Muhammad Aurangzeb gestures while speaking with media representatives at the finance ministry in Islamabad on March 22, 2024. (AFP/File)
ISLAMABAD: Federal Minister for Finance and Revenue Muhammad Aurangzeb on Tuesday highlighted that 43 percent of the sectors in Pakistan’s economy pay less than one percent of the total tax collected, urging wholesalers, distributors and retailers to improve their contributions.
Pakistan’s narrow tax base and persistent tax evasion issues lead to insufficient revenue collection for the country’s fragile economy each year. The shortfall exacerbates the government’s tendency to run a high fiscal deficit, often financed through domestic and international borrowing, which increases the nation’s debt burden.
The country’s top tax collection body, the Federal Board of Revenue (FBR), collected Rs1.455 trillion ($5.2 billion) in July-August against the projected target of Rs1.554 trillion ($5.6 billion), according to provisional figures compiled officially over the weekend.
“43 percent sectors of this economy pay less than one percent tax so we have to make a collective effort and request these sectors to contribute otherwise we will keep going to the IMF [International Monetary Fund] for more [loans],” the finance minister said.
“Wholesalers, distributors, retailers we request you again to make a move to contribute to the country’s economy,” he continued. “We request them to help us.”
The minister made it clear the tax imposed on these sectors would not be withdrawn, pointing out that such a step would create more problems for the salaried class and manufacturing sector.
Pakistan has set a challenging tax revenue target of Rs13 trillion ($46.66 billion) for the current fiscal year, nearly a 40 percent increase from the previous year, to strengthen its case for a new bailout deal with the IMF.
The South Asian nation’s new administration has also decided to digitalize the tax collection system to prevent leakages, even as a large segment of the national economy remains undocumented.
Aurangzeb highlighted his commitment to cutting down the size of the federal government, adding that a method was being followed in which six ministries were initially chosen, of which two would be abolished.
However, he did not specify which ministries he was referring to.
“There will also be a reduction in the number of officers from grade 17 to 22,” he added. “We are closing the entities and departments that can be shut down.”
The minister said once the implementation of “rightsizing” the initial ministries was completed, the government would address the next five ministries and continue the process.
He also mentioned that remittances had remained at an all-time high in recent months, and highlighted that rating agencies Fitch and Moody’s had also upgraded Pakistan’s ranking by one notch.
ISLAMABAD: Turkmenistan is set to become the first Central Asian country to gain access to Pakistan’s strategically positioned Gwadar port under the China Pakistan Economic Corridor (CPEC), Pakistani state media reported on Sunday.
The Gwadar port lies at the heart of CPEC, a part of China’s Belt and Road Initiative under which Beijing has pledged more than $60 billion in infrastructure and energy projects in Pakistan.
It aims to connect China to the Arabian Sea through a network of roads, railways, pipelines and ports in Pakistan and help Islamabad expand and modernize its economy.
Pakistan and Turkmenistan will soon sign an agreement in this regard, the state-run Radio Pakistan broadcaster reported.
“The government has constituted a committee to examine the draft agreement between Gwadar Port and Turkmenbashi Port under CPEC,” the report read.
Pakistan and Turkmenistan are already working on various joint projects, including Turkmenistan–Afghanistan–Pakistan–India (TAPI) gas pipeline, rail track and fiber connectivity, to connect South and Central Asia.
Cash-strapped Pakistan hopes to leverage its strategic geopolitical position and enhance its role as a pivotal trade and transit hub connecting the landlocked Central Asian republics with the rest of the world.
ISLAMABAD: The Pakistani government has reduced the price of petrol by Rs10 per liter, the Finance Division said late Sunday.
Pakistan revises petroleum prices every fortnight. After the latest revision, petrol will now cost Rs249.10 per liter.
The government reduced the price of high-speed diesel by Rs13.06 to Rs249.69, according to the Finance Division notification.
“The Oil and Gas Regulatory Authority (OGRA) has worked out the consumer prices of petroleum products, based on the price variations in the international market,” the notification read.
In Pakistan, petrol is mostly used in private transport, small vehicles, rickshaws and two-wheelers, while any increase in the price of diesel is considered highly inflationary as it is mostly used to power heavy transport vehicles and particularly adds to the prices of vegetables and other eatables.
Similarly, the price of kerosene oil went down by Rs11.15 to Rs158.47, while that of light diesel oil was reduced by Rs12.12 to Rs141,93.
ISLAMABAD: US Acting Under Secretary of State John Bass will discuss bilateral issues and regional security challenges with Pakistani officials in Islamabad this week, the State Department said, as the South Asian country confronts surging militant attacks on its soil.
Pakistan and the US, once close allies during the Cold War era and the so-called “War on Terror,” have closely cooperated in battling militant outfits such as Daesh and the Tehreek-e-Taliban Pakistan (TTP) over the years.
Pakistan has suffered a surge in militant attacks since the Afghan Taliban seized Kabul in August 2021. Islamabad blames the TTP or the Pakistani Taliban for launching attacks in Pakistan from Afghanistan. The Afghan government rejects Pakistan’s allegations of providing shelter to militants and has urged Islamabad to resolve its security challenges internally.
“Acting Under Secretary of State John Bass will travel to Islamabad, Pakistan, and Ankara, Türkiye, from September 14 to 18,” a press release from the State Department on Sunday read. “In Islamabad, Under Secretary Bass will meet with senior Pakistani government officials to discuss a range of bilateral issues and shared regional security challenges.”
In Ankara, Bass will meet senior Turkish officials “to underscore the strength of US-Turkiye bilateral relationship,” the State Department said. It added that both sides will also discuss efforts by the US and Turkiye to work together to support peace and stability in the region.
Pakistan and the US cultivated strong defense ties during the Cold War era yet their relationship was also tested by divergent priorities on various issues. However, more recent times have seen tensions escalate, particularly after the September 11 attacks on American soil, when US officials criticized Pakistan for not sufficiently supporting the American military efforts against the Taliban in Afghanistan.
The perception of US interference in Pakistani politics has also been a contentious issue between the two countries, highlighted by former prime minister Imran Khan’s allegations that Washington orchestrated his ouster in April 2022, a claim the US authorities have denied.
Pakistan parliament to resume session today as government eyes constitutional amendments on judicial reforms
Sunday’s parliamentary session was adjourned after government failed to secure required numbers for constitutional amendments
Amendments include extending the tenure of superior judges by three years, changing process of the chief justice’s appointment
Updated 24 min 19 sec ago
SAIMA SHABBIR
ISLAMABAD: Pakistan’s Senate and National Assembly houses of parliament will resume their key sessions today, Monday, as the government eyes tabling history-making constitutional amendments that are expected to increase the retirement age of superior judges by three years and change the process by which the Supreme Court chief justice is appointed.
The parliament’s session was adjourned on Sunday night without the government tabling the ‘constitutional amendment package.’ The package of reforms, widely believed to include as many as 22 amendments to the constitution, has raised widespread concerns among opposition parties and independent experts who say the moves are aimed at increasing the government’s power in making key judicial appointments and dealing with the defection of lawmakers during house votes.
Ahead of the parliamentary session, Defense Minister Khawaja Asif, a senior member of the ruling Pakistan Muslim League-Nawaz (PMLN) party, told reporters the government had the 224 votes, two-thirds majority, needed to pass the amendment. He also refuted reports that the amendment was being introduced to grant an extension to Supreme Court Chief Justice Qazi Faez Isa, widely believed to be aligned with the ruling coalition led by Prime Minister Shehbaz Sharif and in opposition to its chief rival, the Pakistan Tehreek-e-Insaf (PTI) party of jailed former premier Imran Khan. The PTI founder has threatened nationwide protests against the reforms.
However, close to midnight on Sunday, Asif told reporters that the National Assembly’s session was adjourned as the ruling coalition had not achieved the required numbers for the constitutional amendments. He said the government is engaged with political parties to develop a consensus over the matter.
“The National Assembly and the Senate will resume their sessions separately at Parliament House in Islamabad today at 12:30 pm,” state broadcaster Radio Pakistan said in a report. “Both of the Houses are likely to take up legislation of national importance including the proposed Constitutional Package to strengthen the judicial system.”
The state media said that the ruling coalition was hopeful it would get the constitutional amendments passed from parliament “with ease.”
Asif admitted on Sunday that Fazl-ur-Rehman, president of the Jamiat Ulema-e-Islam-F (JUIF), had not agreed to the government’s proposals.
“We have made it clear that we need to properly read the draft [amendment] and deliberate on it before supporting it and we were not given the draft,” JUIF’s Abdul Ghafoor Haideri told reporters on Sunday.
“Now after the parliamentary committee meeting, we will deliberate on this in our party and then decide on the future course.”
Earlier, the government had assured that the amendments were not meant to be “person-specific or individual-specific legislation.”
“Whatever is going to happen will be for the greater good of the people. It would be to benefit the people, the nation,” Information Minister Ataullah Tarar told reporters.
AMENDMENTS
The coalition government is proposing that the retirement age of superior judges be increased by three years. Currently, Article 179 of the Constitution envisages that a judge of the Supreme Court shall hold office until he attains the age of retirement of 65 years, whereas Article 195 of the Constitution says that a judge of a high court shall hold office until he attains the age of 62 years. The current chief justice retires on Oct. 25.
The government is also mulling revising the seniority principle in the appointment of the top judge, the coalition government’s spokesperson on legal affairs Aqeel Malik told media this week.
At present, according to Article 175A of the Constitution, the senior most judge of the Supreme Court is appointed as the chief justice on the basis of the principle of seniority, but there are widespread reports that the constitutional amendment envisions a five-member panel comprising top court judges as responsible for appointing the chief justice.
The reform package also includes a proposal to allow the transfers of judges from one high court to another and changes to Article 63-A of the Constitution, which relates to the disqualification of legislators who cross party lines in voting for a constitutional amendment.
“If passed, the reforms could mark a seismic shift in the country’s judiciary, shaking up long-established procedures and leaving a lasting impact on how the judicial and executive branches interact,” Pakistan’s Express Tribune newspaper said in a news analysis.
In an interaction with reporters, PTI Chairman Gohar Khan said the constitutional package was an “attack” on the judiciary and its freedom.
“We believe the government is adopting an unconstitutional process,” he said. “Primarily, every aspect of the state needs to be independent, especially the judiciary, it cannot be compromised, … If there is any attempt to do this to the judiciary, we will strongly condemn it.”
RESERVED SEATS
The amendments have been proposed after a string of Supreme Court judgments that have ostensibly challenged Sharif’s coalition government, mostly notably a July 12 verdict by a 13-member bench of the Supreme Court that declared the PTI eligible for reserved parliamentary seats.
The verdict dealt a major blow to Sharif’s weak ruling coalition, which may lose its two-thirds majority in Pakistan’s parliament if the verdict is implemented. Sharif’s PML-N party has filed a review petition in the Supreme Court against the verdict.
PTI candidates contested the Feb. 8 general elections as independents after the party was barred from polls on the technical grounds that it did not hold genuine intra-party polls, which is a legal requirement.
Subsequently, the PTI-backed candidates won the most seats in the election, but the Election Commission of Pakistan (ECP) ruled independents were ineligible for their share of 70 reserved seats — 60 for women, 10 for non-Muslims. The reserved seats were then distributed among other parties, mostly those in the ruling coalition, a decision Khan allies contested in the court.
Reserved parliamentary seats for women and minorities are allocated in Pakistan in proportion to the number of seats a political party wins in general elections. This completes the National Assembly’s total 336 seats.
A simple majority in Pakistan’s parliament is 169 seats.
ISLAMABAD: Pakistan will lock horns with hosts China in the first semifinal of the Asian Champions Trophy field hockey today, Monday, after losing their first match of the tournament to arch-rivals India last week.
Pakistan are placed at number two on the points table, with undefeated India occupying the top spot. The green shirts have played five matches in the tournament out of which they have lost only one against India. Pakistan drew 2-2 against both Malaysia and South Korea last week before notching their first win of the tournament against Japan 2-1 on Wednesday.
The South Asian country then beat China 5-1 on Thursday before losing to India 2-1 in a close encounter on Saturday.
“The first semifinal of the Asian Champions Trophy of Hockey will be played between Pakistan and China at Moqi tomorrow [Monday],” Radio Pakistan said on Sunday. “The match will start at 12:30 p.m. Pakistan Standard Time.”
Pakistan captain Amad Butt said on Sunday that his side would go “all-out” against China, saying that his teammates were well aware of the hosts’ strengths and weaknesses.
“It also helps that we arrived for this tournament very early and played quite a few matches against China,” Butt said. “We look forward to a good game and if we win, there is nothing better than an India-Pakistan final.”
India, who have so far remained unbeaten in the tournament, will play against South Korea today in the second semifinal of the tournament.
China began the tournament on a poor note with a 0-3 loss to India but had mixed results in their campaign with a 4-2 win against Malaysia, a 2-3 loss to South Korea and a 1-5 loss to Pakistan.
However, they will take the field today against Pakistan confident after beating Japan 2-0 last week.
