Business

Dar directs FBR to take steps for achieving tax collection target

Published

2 years ago

Farwa

Dar directs FBR to increase its efforts to achieve true tax potential.
FBR faces a revenue shortfall of Rs225 billion for December 2022.
Revenue shortfall will now make it hard for government to convince IMF to revive its stalled programme.

Finance Minister Ishaq Dar has directed the Federal Board of Revenue (FBR) to make all possible efforts to achieve the true tax potential in the country as the body has missed the target for the outgoing month of December 2022.

The finance minister made the remarks while chairing a meeting on the revenue performance of FBR in Islamabad.

During the meeting, FBR Chairman Asim Ahmad gave a detailed presentation on revenue targets and performance of FBR for the months of November and December 2022.

It is pertinent to mention here that FBR faces a revenue shortfall of Rs225 billion for the outgoing month of December 2022; the tax collection machinery collected only Rs740 billion against the desired target of Rs965 billion.

This increased revenue shortfall will now make it hard for the government to convince the IMF to revive the stalled IMF programme without taking additional and substantial taxation measures such as a mini-budget for the current fiscal year.

The government is contemplating options for the imposition of Flood Levy in the range of 1% to 3% to fetch Rs60 billion. Other taxation measures towards direct taxation are also on the cards. But the government is in a catch-22 situation and has identified only those areas that earned lofty profits because across-the-board taxation during the time of prevalent stagflation might further erode already sluggish economic activities.

However, the FBR sources argued that the imports compression and lingering litigation in higher judiciary resulted in lowering the revenue collection target. They have conveyed to the IMF that the collection of pending revenue would be materialised till March 2023. So, the FBR’s annual target of Rs7.47 trillion would remain intact, they believe.

But independent analysts are of the view that it would be hard for the FBR to achieve the desired tax collection target of Rs7 trillion by the end of June 30, 2023. The FBR has so far collected Rs3.428 trillion in the first half (July-Dec) period of the current fiscal year against the desired target of Rs3.673 trillion. The FBR collected Rs2.9 trillion in the same period (July-Dec) of the last financial year 2021-22.

According to the official statement, the FBR has demonstrated a remarkable revenue collection performance in the first six months of the current financial year 2022-23 and has collected Rs3,428 billion for the first six months against Rs2,929 billion collected in the corresponding period of last year depicting an increase of 17%.

The FBR collected Rs740 billion for the month of December 2022 against Rs599 billion in the same month last year, showing an impressive growth of almost 24% compared to the same month last year. This performance is despite huge import compression and zero rating on petroleum.

Direct taxes collection continues to grow at a robust pace, which has shown a growth of 66% during December 2022 compared to December 2021, a clear indicator of the policy of shifting the tax burden on the wealthy and affluent. Direct taxes collection for the first six months has also registered an unprecedented growth of 49%. This was achieved despite the fact that certain policy interventions having a revenue impact of Rs250 billion introduced through Finance Act 2022 could not be implemented as these are sub-judice in the courts. The target for the month of December was Rs965 billion, which could not be achieved due to the aforementioned reason.

The revenue collection performance is also exceptional when viewed in the context that the FBR has also issued refunds of Rs176 billion during the first half of the current financial year as against Rs149 billion during the corresponding period of last year.

Business

The amount of trade between Saudi Arabia and Pakistan hits $700 million.

Published

10 hours ago

Farwa

Through the Special Investment Facilitation Council (SIFC), Pakistan’s trade connections with Saudi Arabia have grown significantly, with bilateral trade volume rising from $546 million to $700 million and exports to the Kingdom growing by 22%.

As bilateral economic cooperation continues to grow, Saudi investors have shown a strong interest in Pakistan’s construction, energy, agricultural, and information technology sectors. The objective for exporting IT services between the two countries has been raised from $50 million to $100 million.

Saudi Arabia has set up a help desk dedicated to making it easier for Pakistani IT companies to register in the Kingdom in order to expedite commercial procedures. The goal of this program is to speed up economic collaborations between the two countries and lower administrative barriers.

The well-known Saudi restaurant chain AlBaik has revealed plans to open locations in Pakistan, which is a big step for the food service industry and should lead to the creation of new job possibilities in the area.

Officials have noted that stronger business links between the two countries lead to greater economic stability, and the SIFC has played a crucial role in promoting these trade advancements. For bilateral trade and investment projects, the Council remains a crucial facilitator.

According to a trade official with knowledge of the developments, “the establishment of dedicated support mechanisms, such as the help desk for IT companies, demonstrates a commitment to long-term economic partnership,” The goal of these programs is to improve the conditions for commercial collaboration between the two nations.

The increasing amount of trade and the diversity of investment sectors show that Saudi Arabia and Pakistan’s economic ties are changing as both countries seek to deepen their business alliances in a number of industries.

Business

After more than 50 years, Bangladesh and Pakistan resume direct trade.

Published

10 hours ago

Farwa

After more than 50 years, the two governments will resume direct bilateral trade, with Bangladesh’s food ministry announcing Sunday that it will receive a supply of 25,000 tonnes of rice from Pakistan next month.

After former Prime Minister Sheikh Hasina was overthrown last August, relations between Bangladesh and Pakistan have begun to improve after decades of tense relations.

Since then, there have been increased bilateral interactions between Bangladesh and Pakistan. Nobel laureate Muhammad Yunus, the interim government’s senior adviser, has met twice with Pakistani Prime Minister Shehbaz Sharif.

According to the food ministry, Dhaka completed an agreement earlier this month to import grains from Pakistan.

“On March 3, the first shipment of 25,000 tonnes will reach Bangladesh,” Zia Uddin Ahmed, a ministry assistant secretary, told Arab News.

“This is the first time that Bangladesh has started importing rice from Pakistan at the government-to-government level since 1971.”

Following direct maritime contact between the two South Asian countries in November—a Pakistani cargo ship stopped in Bangladesh for the first time since 1971 with imports and exports arranged by private companies—their trade relations grew.

Resuming trade with Pakistan is a significant step for Bangladesh, according to Amena Mohsin, a lecturer at North South University and a specialist in international relations.

“We want to see progress in our bilateral relationship with Pakistan. Most significantly, we are currently going through a low point dispute with India, even though we constantly diversify our partnerships.

This most recent move to purchase rice from Pakistan is really significant in this context,” she told Arab News.

Business

The total amount of Pakistan’s liquid foreign reserves is $15.95 billion.

Published

3 days ago

Farwa

As of February 14, Pakistan’s total liquid foreign reserves were $15,947.9 million, with the State Bank of Pakistan’s (SBP) holdings being $11,201.5 million.

Official figures for the week ending February 14, 2025, show that the central bank’s liquid foreign exchange reserves rose by $35 million to $11,201.5 million.

Commercial banks maintained net foreign reserves of $4,746.4 million during the period under review, according to the breakdown of foreign reserves.

The nation’s total liquid foreign reserves as of the week ending February 07, 2025, were $15,862.6 million.

Of these, the central bank held $11,166.6 million in foreign reserves, while commercial banks kept $4,696 million in net reserves.