Business

Govt expected to keep standard rate of GST unchanged at 18%

Published

2 years ago

Farwa

Govt also considering amendments to bring retailers in tax net.
Options for documentation of property sector also being looked into.
FBR chairman gives detailed presentation on budgetary proposals.

ISLAMABAD: The government is expected to keep the standard rate of General Sales Tax (GST) unchanged at 18% for the upcoming budget 2023-24, reported The News.

The government is also working on jacking up rates of withholding taxes where applicable and possessed the potential to increase tax revenues. The government also considered amendments for retailers to bring millions into the tax net. Schemes for luring retailers into the tax net have miserably failed in the last two to three decades.

Different proposals are under consideration for slapping Minimum Asset Tax (MAT) on both moveable and immovable assets but the Federal Board of Revenue (FBR) has been advised to get the endorsement of the constitutionality of the proposed taxation measures to avoid landing into litigations.

The government is also looking into options for the documentation of the property sector for achieving a highly ambitious tax collection target of Rs9 to Rs9.2 trillion for the upcoming budget.

These proposals were discussed in a meeting chaired by Finance Minister Senator Ishaq Dar on budgetary proposals at the Finance Division.

State Minister for Finance Dr Ayesha Ghous Pasha, Special Assistant to Prime Minister (SAPM) on Finance Tariq Bajwa, SAPM on Revenue Tariq Mehmood Pasha, Chairman Reforms and Resource Mobilization Commission (RRMC) Ashfaq Yousuf Tola, finance secretary, FBR chairman, and other senior officers from Finance Division and FBR attended the meeting.

FBR Chairman Asim Ahmad gave a detailed presentation on budgetary proposals for the Federal Budget 2023-24.

Finance Minister Dar reiterated the resolve of the government to provide a business and people-friendly budget. He added that the government is committed to ensuring that the new budget brings economic prosperity for all sectors of the economy and ensures the distribution of resources equitably among various sectors, the official statement concluded.

The meeting discussed some taxation proposals including a measure to tax the exporters that hold back foreign exchange in anticipation of the devaluation of the rupee against other international currencies and resultantly earning a gain on their foreign exchange.

Such gain can be computed as the difference between the foreign currency conversion rate prevailing after a specified number of days of export and the conversion rate on the date when the foreign currency is brought to Pakistan. Since the FBR is not privy to these details, it is recommended that the task to collect this levy be entrusted to the State Bank of Pakistan.

For promoting documentation in exports through the minimum tax regime, Pakistan’s economy heavily relies on exports, and as such, the government has been taking measures to promote and incentivise them.

One such measure is the FTR regime for exporters. It is recommended that the FTR scheme for exporters should be shifted to a minimum tax regime (MTR) scheme in the first phase to encourage documentation.

In the next phase, exporters should be allowed to avail 100% tax credit subject to certain conditions, similar to the provisions under the law for non-profit organisations. To avail this benefit, exporters must maintain proper documentation and comply with relevant government regulations. The proposed MTR scheme can promote documentation in exports and incentivise exporters to maintain proper financial statements, ultimately leading to a more transparent and inclusive economy.

This scheme can also help the government increase tax revenue, bringing in much-needed funds towards public services and development projects.

Business

SFD and Pakistan Sign Two Deals Totaling $1.61BLN

Published

1 day ago

Farwa

Two agreements totaling $1.61 billion have been inked by Pakistan and the Saudi Fund for Development to improve their bilateral economic cooperation.

Business

Saudi Arabia and Pakistan sign an MOU to strengthen their auditing industry collaboration.

Published

1 day ago

Farwa

A spokesperson for the office of the Auditor-General of Pakistan (AGP) announced on Monday that the two countries have signed a Memorandum of Understanding (MoU) to strengthen cooperation in public sector auditing through improved cooperation between audit institutions of both countries, as well as training programs and the exchange of trainers.

This comes as a group from Saudi Arabia’s General Court of Audit (GCA), headed by GCA President Dr. Hussam bin Abdulmohsen Alangari, arrived in Pakistan on Sunday for a four-day visit.

The agreement was signed during AGP Muhammad Ajmal Gondal’s meeting with the Saudi delegates, aiming to strengthen audit cooperation, enhance knowledge-sharing, and improve governance, transparency and accountability in government spending.

Public relations officer Muhammad Raza Irfan of the AGP’s office told Arab News that the deal will further advance bilateral collaboration between Saudi Arabia and Pakistan in addition to enhancing professional ties between the two nations’ auditing institutions.

In a statement released from his office, AGP Gondal was cited as saying, “This collaboration marks a significant step toward fostering international cooperation in auditing.”

“The exchange of ideas and methodologies will undoubtedly strengthen our capacity to meet emerging challenges and set new benchmarks for public accountability.”

Discussions at Monday’s meeting focused on fostering closer ties between the Supreme Audit Institutions (SAIs) of Pakistan and Saudi Arabia, sharing innovative audit methodologies, and planning collaborative initiatives for the future, according to the AGP office.

The two parties decided to increase their knowledge of theme, environmental, and impact audits as well as to exchange best practices in audit standards, performance audits, and citizen participation audits.

The statement added, “It also agreed to exchange trainers, address new auditing challenges, plan cooperative audits, including a performance audit on the oil and gas sector in 2025, and work together on training programs.”

Both sides reaffirmed their shared commitment to promoting transparency, accountability and excellence in public sector auditing.

Business

The government chooses to continue the PIA privatization process.

Published

1 day ago

Farwa

The Pakistan International Airlines (PIA) privatization process will be restarted by the federal government, and expressions of interest would be requested within the month. Officials stated that the Prime Minister’s Committee on Privatization will convene to make the final decision.

Usman Bajwa, the secretary of the Privatization Commission, gave a briefing on the updated procedure to the National Assembly Standing Committee on Privatization. Additionally, he disclosed that airlines other than PIA are now able to compete with regional carriers thanks to IMF-approved aircraft tax concessions.

Farooq Sattar, the chairman of the privatization committee, underlined the importance of giving PIA workers at least five years of job security. Employee protection will continue to be a top priority and will be resolved prior to bidding, the Privatization Commission promised.

PIA’s liabilities totaling Rs650 billion have already been assumed by the government, and an additional Rs45 billion in outstanding debts must be paid before the privatization process can begin. As of the now, PIA has assets around Rs155 billion and liabilities worth Rs200 billion. It will be necessary for the new buyer to expand the fleet by 15 to 20 aircraft.

Additionally, the Privatization Committee has sought a timeline for the privatization of Faisalabad, Gujranwala, and Islamabad Electric Supply Companies. Officials stated that after the appointment of a financial advisor, the privatization process for these companies will accelerate.