Business

Major changes on the cards for boosting tax-to-GDP ratio to 15pc

Major changes on the cards for boosting tax-to-GDP ratio to 15pc
Inflation

Published

6 months ago

November 27, 2023

admin

Major changes on the cards for boosting tax-to-GDP ratio to 15pc

A decision has been made to introduce changes in the tax policy for increasing the tax-to-GDP ratio to 15 per cent through close collaboration between the Federal Board of Revenue (FBR) and the International Monetary Fund (IMF), as Pakistan is searching for ways and means to enhance revenue collection, sources say.

The proposed move comes after the current economic crisis again highlighted the failure to expand tax net while imposing direct taxes and include wealthy individuals as well as booming and profitable sectors like real estate and retail to the list of filers.

It isn’t a surprise that the inability to enhance the tax-to-GDP ratio, currently among the worst in the wrold, is the root cause of the economic troubles Pakistan has been going through as different exemptions and the culture to avoid paying taxes means the government is neither able to meet its expenditures nor boost the development budget.

The result is obvious: the country lacks basic infrastructure and human resources catering to the needs to 21st century economy as Islamabad continues relying upon assistance from friendly countries, donor agencies and the IMF-like financial institutions.

But this dependence has serious consequences for the nation as the state policies are adopted according to the conditions set by these foreign actors.

Meanwhile, the burden is always shifted to the common people through indirect taxes and higher prices of electricity, gas and petroleum products, which has been the main contributor to the prevailing cost-of-living crisis triggered by a persistent record-high inflation.

According to the sources, the government will prepare a compliance improvement plan by March next year. It is important to note that the current $3 billion stand-by arrangement is set to expire on March 31.

In this connection, a risk register for the possible taxpayers – both the filers and tax evaders – would be finalised on the basis of information shared by the FBR field formations.

The necessary data for this purpose is to be compiled by using different sources including banks, the National Database and Registration Authority (NADRA), and the integration system developed by the FBR.

Hence, the whole exercise would help to identify and list the people who are currently not among the taxpayers while also sharing their details to the IMF, which has been press Pakistan hard to widening the tax base and collection.

The amendments, the sources say, will make the risk compliance management a part of the tax policy as a new round of talks is scheduled for today (Monday) between the FBR and an IMF team to separate the tax administration and policy.

Post Views: 102

Business

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

Published

1 day ago

May 17, 2024

admin

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.

Post Views: 10

Business

Govt jacks up power price by Rs1.47 per unit

Published

1 day ago

May 17, 2024

admin

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.

Post Views: 17

Business

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

Published

1 day ago

May 17, 2024

admin

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.

Post Views: 13