Business

Govt working on retirement, pension reforms

Published

2 weeks ago

May 7, 2024

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Govt working on retirement, pension reforms

The government on Tuesday said work was in progress for retirement and pension reforms which would be applicable to all the institutions – a move that is expressing Islamabad’s desire to reduce government spending for controlling budget deficit.

Addressing a press conference after a federal cabinet meeting, Law Minister Azam Nazeer Tarar said Pakistan had a large number of government employees and the country could not afford the current level of expenditure.

Pension and retirement reforms would be introduced by taking all stakeholders – different institutions including judiciary and military – into confidence and the government wasn’t going for anything controversial, the minister said.

Read more: Pakistan means business, aid no more a focus: Musadik Malik

Speaking on the occasion, Information Minister Attaullah Tarar said pension was a huge burden and explained that the government had sought suggestions from different stakeholders so that an effective policy could be formulated.

“We are moving towards boosting revenue generation and reducing [government] expenditures,” he said , at a time when an International Monetary Fund (IMF) mission is expected to arrive in Pakistan next week to hold talks on a new programme under Extended Fund Facility (EFF) and climate financing.

IT ISN’T SUSTAINABLE

Stressing the need for tax reforms, Finance Minister Muhammad Aurangzeb said the country could not move forward with a dismal tax-to-GDP ratio of 9 per cent, as he highlighted the fact that other nations had a much higher percentage of taxpayers, unlike Pakistan where very few people were in the tax net.

“You can run educational institutions and hospitals with charity, but not a country,” he remarked, as he reminded the audience about affluent people spending money for charity purposes, but avoiding to pay their due taxes.

Read more: Improve tax collection or we will need another IMF package: Aurangzeb

Further burdening the existing taxpayers like the salaried wasn’t sustainable, said Aurangzeb, as he stressed the need for expanding the tax base and improving the tax-to-GDP ratio to around 15 years in the next three to four years.

The first phase of retailers’ registration was voluntary, he said, showing that the government may go for strict actions soon to bring the lucrative retail sector into tax net.

INTEREST RATE CUTS

The finance minister also said that the interest rates would be slashed in the coming months as inflation was a decline consistently – a reference to the consumer price index (CPI) for April dipped to 17.3pc which is lowest since May 2022.

It would boost economy activity in the country by incentivising investment by private sector, Aurangzeb noted, as Pakistan’s economy has been crippled for years amid skyrocketing cost of doing business.

At the same time, Aurangzeb also talked about improvement in investors’ confidence and a stronger rupee which, he said, were pointing to growing economic stability.

With the finance minister assuring the reporters of rate cuts in June, July and August, all eyes will now be on the State Bank of Pakistan’s Monetary Policy Committee, which is scheduled to meet on June 22.

The Pakistan Stock Exchange is already moving up since the release of latest CPI figures, showing a reduction for the fourth consecutive month, and the latest remarks will certainly help the market further gains.

IMF PROGRAMME

Aurangzeb said an IMF mission would reach Pakistan this month as the two sides were set to have a dialogue for longer and bigger package under EFF as well as climate financing.

The minister, however, added that the government was mulling over the size and duration of the next IMF programme and would reach a decision during the talks.

At the same time, he noted that Pakistan was used to remain limited to the IMF despite the fact that there were other international financial institutions as well.

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Business

Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

Published

2 days ago

May 17, 2024

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Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

A notable Chinese company has expressed keen interest in expanding its investment in Pakistan, in yet another sign of investor confidence boost in the leadership of Prime Minister Shehbaz Sharif.

A delegation from Chinese firm MCC Tongsin Resources led by its Chairman Wang Jaichen called on PM Shehbaz here on Friday.

The premier invited the Chinese company to invest in Pakistan’s mining sector and manufacturing of export goods.

Shehbaz assured the delegation that his government would extend all-out facilitation to the company from minerals exploration and processing to the export of goods.

The PM instructed the relevant federal ministers and officers to continue consultation with the Chinese firm, taking the Balochistan chief minister, provincial departments and stakeholders on board.

The delegates reposed trust in PM Shehbaz’s leadership, and expressed keen interest in enhancing their investment in Pakistan’s mining and minerals sectors.

The delegation briefed Prime Minister Shehbaz about the construction of a mineral park in Pakistan and their future investment plans.

The premier welcomed the Chinese firm and highlighted the priority steps by his government to promote foreign investment in Pakistan.

He said that being a time-tested friend, China supported Pakistan in every difficult hour for which the Pakistani nation was grateful to the leadership and people of China.

Federal ministers Ahad Khan Cheema, Dr Musaddik Malik, Rana Tanveer Hussain, Jam Kamal Khan and relevant senior officers attended the meeting.

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Business

Govt jacks up power price by Rs1.47 per unit

Published

2 days ago

May 17, 2024

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Govt jacks up power price by Rs1.47 per unit

The government on Friday increased the electricity tariff by Rs1.47 per unit.

According to Nepra sources, the collection from consumers will take place in August, September, and October.

The electricity companies had requested the funds as part of the third quarter adjustment for 2023-2024, seeking Rs 31.34 billion under capacity charges.

Sources said that Rs5.57 billion were requested for operation and maintenance costs, and Rs12.38 billion were requested for the transmission and distribution impact under monthly fuel cost adjustment.

Previously, Nepra had completed the hearing on the electricity companies’ request under the quarterly adjustment.

Nepra approved the Power Division’s request, allowing an increase of Rs 1.45 per unit in electricity prices.

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Business

Hong Kong allows China’s digital yuan to be used in local shops

Published

2 days ago

May 17, 2024

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Hong Kong allows China's digital yuan to be used in local shops

Hong Kong will allow mainland China’s pilot digital currency to be used in shops in the city, the head of its de facto central bank said on Friday, marking a step forward for Beijing’s efforts to internationalise the yuan amid rising geopolitical tensions.

The programme, backed by Beijing, will allow mainland Chinese and Hong Kong residents to open digital yuan wallets via a mobile app developed by China’s central bank and will permit them to make payments in retail shops and some online stores in Hong Kong and in mainland China.

Transactions using e-CNY, predominantly for domestic retail payments in China, hit 1.8 trillion yuan ($249.27 billion) as of end of June 2023, with 120 million digital wallets opened, according to the latest disclosure from China’s central bank.

Using the wallet, users can make payments at over 10 million merchants in 17 provinces and cities in the mainland.

Each wallet used in the city will be subject to a balance limit of 10,000 yuan, with single transactions and daily payments capped at 2,000 yuan and 5,000 yuan, respectively, officials from the Hong Kong Monetary Authority said.

Peer-to-peer transfers will not be allowed at the moment, according to the HKMA.

“By expanding the e-CNY pilot in Hong Kong .. users may now top up their wallets anytime, anywhere without having to open a mainland bank account, thereby facilitating merchant payments in the mainland by Hong Kong residents,” HKMA Chief Eddie Yue said.

Currently, users of other digital yuan wallets such as those operated by Ant Group and Tencent can make payments in the city.

Industrial and Commercial Bank of China, Bank of China Ltd, China Construction Bank Corp and Bank of Communications Co have been selected as e-CNY wallet operators.

The yuan’s use in global finance remains low, though it has shown steady increases.

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