Day: December 22, 2021

In a bid to restore the confidence of taxpayers in the tax system and to ensure transparency and quick processing of the consignments, the office of the Federal Tax Ombudsman (FTO) has been consistently taking measures to eliminate maladministration and corruption in the Federal Board of Revenue (FBR).

An own motion (OM) investigation was initiated by Federal Tax Ombudsman through the exercise of the jurisdiction conferred under Section 9(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance). The OM initiative was based on media reports that the facility of unaccompanied baggage (UAB) was being misused through clearance of goods in commercial quantity and of items that were non-bonafide baggage.

According to the Baggage Rules, 2006, related to UAB of passengers arriving in the country, baggage is defined as “personal wearing apparel and other personal, professional and household effects of a passenger”.

Rule 3 of the Baggage Rules specifies allowances for Pakistani nationals who do not avail transfer of residence and are entitled to import duty-free items, if the stay is more than seven days or in case of the first visit in a year. Rule 4 specifies allowances for availing transfer of residence facility in respect of passengers who had stayed abroad for more than two years.

It was observed that the existing system of clearance of baggage in the WeBOC computerized system was not being implemented in the majority of the baggage consignments which in turn provides an open opportunity of abuse through clearance of non-bonafide baggage in violation of legal provisions.

During the investigation, data furnished by the department was examined and it transpired that the Directorate of Reforms & Automation, Karachi had deployed the module in the WeBOC system for processing of baggage declarations (BDs) and Collectorates across the country are mostly using the module for processing of unaccompanied baggage except for the Collectorate of Preventive/Enforcement, Karachi which is the station where highest number totaling 10013 BDs were filed during the period from January 1, 2021, to October 25, 2021.

However, it was observed that the Collectorate of Enforcement used the said module on a test and trial basis in September 2021 i.e. after cognizance taken by FTO Office and due to delay and reluctance in the usage of BD module by the said Collectorate, a major chunk of BDs filed in the country were not processed through WeBOC module.

Being a glaring case of maladministration, Federal Tax Ombudsman has directed the FBR to ensure the processing of all Baggage consignments through the automated module in WEBOC without any exception. This will not only eradicate any chance of misuse of the subject facility but will also result in prompt processing of the bonafide baggage of the incoming passengers at various airports across the country.

Source: Pro Pakistani

The federal cabinet has postponed the ratification of the proposed Rs. 360 billion mini-budget and a contentious central bank autonomy legislation to analyze government capital and national security.

The government has delayed the announcement for the imposition of taxes to the tune of Rs. 360 billion, according to a report by Express Tribune. It has also deferred a cabinet motion of the State Bank of Pakistan Amendment Bill, 2021, in order to meet the pre-conditions set by the International Monetary Fund (IMF).

The Federal Minister for Information, Fawad Chaudhry, said that while the (Supplementary) Finance Bill (mini-budget) had been pulled from Tuesday’s cabinet meeting agenda, the bill will be presented again in the coming days. Moreover, both the SBP Amendment Bill and the proposal for the mini-budget will be submitted to the cabinet by the end of this week, as stated by the Finance Advisor, Shaukat Tarin.

The cabinet had first enacted the SBP Amendment Bill reportedly without debate in March. In order to resurrect the $6 billion loan program, the Ministry of Finance gave up a lot of territory to the central bank, but in exchange, it was unable to secure accountability, thereby falling short of its fundamental goals.

Interestingly, the most important goal for any central bank is to maintain price stability through clear inflation targeting but this was not addressed in the SBP Amendment Bill. Pakistan’s desire to keep the door open for borrowing from the central bank was also denied by the IMF which also refused to agree on any serious accountability for the SBP.

The government’s inability to borrow from the central bank has left it at the mercy of commercial banks, which have recently demanded interest rates much higher than the key policy rate.

If Pakistan wants to be considered for the next $1 billion IMF loan tranche, it must approve the bills. The global lender has set preconditions for the resumption of the $6 billion bailout facility, including the levy of around Rs. 360 billion in new taxes and passage of the SBP Amendment Bill.

However, it appears that the administration will miss the IMF board meeting on 12 January, as getting parliament’s approval for both bills by the end of the month now appears to be highly improbable.

It is expected that the government will present a mini-budget during the parliament’s opening winter session (today), including fiscal adjustments and budget cuts totaling roughly Rs. 600 billion as part of an agreement with the International Monetary Fund (IMF), and opposition parties promise to fight the move vehemently.

Source: Pro Pakistani

Advisor to the Prime Minister on Finance and Revenue, Shaukat Tarin, emphasized the significance of Automation of processes at the Federal Board of Revenue (FBR) and deemed it crucial in facilitating taxpayers.

He made these remarks while chairing a meeting on Automation at FBR (HQs), Islamabad, on December 22, 2021. The meeting was attended by Chairman FBR/Secretary Revenue Division, Dr. Muhammad Ashfaq Ahmed, Member FBR (IT), Dr. Ashfaq Ahmad Tunio, Chief Information Officer (CIO), Mr. Mansoor Sultan, and Chairman of Board of Governors PRAL, Syed Javed.

The Advisor on Finance and Revenue was briefed on the progress made on the automation initiatives, data center up-gradation, and initiatives on data security at offices of the tax machinery. The Advisor emphasized the critical importance of automation for taxpayer facilitation, administrative efficiency, and transparency.

He also directed FBR to take all necessary measures for ensuring the security of taxpayers’ data and remarked that all the required resources would be made available for the desired purpose. He further added that a proper monitoring mechanism must be established for signature initiatives taken by the government.

Source: Pro Pakistani

The Pakistani Rupee (PKR) fell to another new all-time low against the US Dollar (USD) and depreciated by 10 paisas against the greenback in the interbank market today. It hit an intra-day low of Rs. 178.57 against the USD during today’s open market session.

The PKR depreciated by 0.06 percent against the USD and closed at Rs. 178.15 today after it lost one paisa and closed at 178.05 in the interbank market on Tuesday, 21 December.

The local currency has lost 13.08 percent on a fiscal-year-to-date basis after recording another historic low today besides depreciating by 11.46 percent on a calendar-year-to-date basis.

While the rupee continues to post historic drops against the dollar, an interesting development on the sidelines suggests that Afghanistan may soon receive supportive liquidity from the United States through a channel of licensed UN agencies.

The development was announced at a news conference in Washington DC after a State Department official said that the US would be more flexible on financial restrictions imposed on Afghanistan following the Taliban’s takeover. He stated that the US had backed the delivery of $280 million to Afghanistan from a World Bank fund last week.

It is pertinent to note that the US had contributed $208 million in humanitarian aid to Afghanistan since August, bringing the total to $475 million this year.

These first signs of flexibility in favor of the war-torn country could offer support to Pakistan’s exchange unit as well since its devaluation was a consequence of the Taliban’s takeover of Afghanistan in August 2021.

In light of the PKR’s interbank performance during the trading hours earlier today, the former Treasury Head of Chase Manhattan Bank, Asad Rizvi, remarked in a news column that Pakistan’s approach to addressing currency problems has been unquestionably yielding the desired outcomes so far.

The positive developments include improved efforts made by banks to speed up the procedure and open new branches. Some banks provide new products to non-resident Pakistanis in order to gain consumers. Incentives are often given to banks to recruit new customers, which will help put substantial support behind the local unit in the near term, Rizvi added.

The PKR resumed its declining trend against most of the other major currencies as well. It posted losses of 55 paisas against the Pound Sterling (GBP), 40 paisas against the Canadian Dollar (CAD), and 41 paisas against the Australian Dollar (AUD).

It also posted a losses of over two paisas against both the UAE Dirham (AED) and the Saudi Riyal (SAR) in today’s interbank currency market.

Conversely, the rupee appreciated against the Euro (EUR) and posted gains of 49 paisas in today’s interbank currency market.

Source: Pro Pakistani

Finance Parliamentary Secretary Zain Qureshi said that the government is seriously considering bringing amendments to the Finance Bill through an ordinance.

The government is now in a fix after the cabinet’s initial deliberation on the mini-budget yesterday where resistance to the SBP Amendment Bill came from a few ministers, leaving no option but to introduce an amendment in the Finance Bill through an ordinance.

This can be later taken to parliament as an ordinance stays valid for 90 days, Qureshi told ProPakistani.

The situation was strikingly different when the last meeting of the Cabinet on Tuesday could not conclude with the approval of the bills and it was decided that Prime Minister Imran Khan would be consulted for it. The Cabinet Committee on Legislation took this matter up in yesterday’s meeting of the Cabinet. After due deliberations and discussions, and paucity of time, it was decided to quickly opt for an ordinance, Qureshi revealed.

The approval deadline for 12 January 2022 will be missed if the bill goes into parliament and gets stuck up. The option of a joint session of the parliament is also out of the question as a session was just conducted with many bills passed in one go, and today’s House Business Advisory Committee of the National Assembly will also deliberate again soon, he explained.

Official Sources in the FBR told ProPakistani that their work on the bill is almost complete and has been sent to the Ministry of Finance. Additionally, the Tax Laws (Fourth) Amendment Bill and SBP’s Autonomy Bill both will go together.

The government is now exploring all options once again to convince the International Monetary Fund (IMF) for the promulgation of a presidential ordinance for the withdrawal of GST exemptions to fetch Rs. 350 billion to bridge its resource gap on an annual basis because it might find it hard to pass such a big chunk of the money bill with the support of its political allies.

The IMF had initially sternly rejected the proposal for the promulgation of the Presidential Ordinance but the government seems to be left with no option but to engage the IMF again to convince it. The government wants the promulgation of the ordinance to be allowed until the upcoming budget and to finally withdraw GST exemptions as part of the next budget through the Finance Bill, 2022.

The Tax Laws (Fourth) Amendment Bill was also withdrawn because the government could not afford backlash against it when the CPI-based inflation was already standing at 11.53 percent for November 2021. The second situation surfaced after increasing difficulties emerged in the wake of a severe defeat in the local government elections in many parts of the PTI’s stronghold province of Khyber Pakhtunkhwa.

Prime Minister Imran Khan will also hold a series of meetings with his economic team to devise a new strategy to tackle these issues. One top official said that they were still making last moment efforts to meet the deadline of 12 January 2022, fulfilling all the prior actions placed by the IMF staff, and the holding of the IMF’s Executive Board meeting for the completion of the Sixth Review, and for the release of $1 billion tranches under the global lender’s $6 billion Extended Fund Facility.

Source: Pro Pakistani

Federal Minister of National Food Security and Research, Syed Fakhar Imam, addressed a workshop organized by Islamic Organization for Food Security (IOFS) on “OIC Country Experience in Food Security Governance for Strengthening South-South Cooperation” on 22nd December 2021.

Fakhar Imam said that Pakistan has taken the issue of food insecurity as a top priority and has declared food security as a national security issue by putting food security as the top agenda item in the national security plan.

Pakistan has reduced food and nutritional insecurity from 24 percent in 2014-15 to 18.3 percent in 2019-20 and is engaged in further reduction through agricultural and livestock development, along with livelihood improvement and economic uplift of the general mass, informed the minister.

Fakhar Imam said that the present government is trying its best to address all the four pillars of food security through various initiatives and programs. In this connection, Prime Minister’s Agriculture Emergency Program has been initiated with an allocation of nearly Rs. 285 billion, which primarily focuses on the productivity enhancement of wheat, rice, and sugarcane, with the cost of approximately Rs. 34 billion, oilseeds enhancement program with the cost of about Rs. 10 billion, conserving water through the lining of watercourses with a cost of Rs. 180 billion, enhancing command area of small and mini dams in Barani areas with a cost of Rs. 28 billion, and water conservation in Barani areas of Khyber Pakhtunkhwa with a cost of Rs. 13 billion.

The minister said that to resolve the issue of food security, numerous initiatives have been taken to increase household income, which includes mechanized harvesting of wheat, rice, maize, and fruits, silos for grain storage, a cold storage facility for horticultural commodities, and value-added products through the provision of harvesting machinery for rice, cob and fruits on 50 percent subsidy, exemption of 28 percent import duty and 17 percent GST on the locally manufactured silo, replenishing of SBP’s financing facility for storage of agricultural produce, and development of small scale/cottage industry under Ehsas and Kamyab Jawan Program.

Furthermore, the government has fast-tracked access to credit/finance through registration of farmers and FVOs and women through biometric mapping and Issuance of kissan cards for subsidy and credit. In addition, the import of more than 3 million tons of wheat and 0.3 million tons of sugar during 2020-21 are the preventive steps taken to ensure the food security of the country.

Fakhar said Pakistan has great potential for enhanced productivity of food and Fiber crops but natural hazards such as climate change, floods, desserts locust, and unforeseen calamities like COVID-19 exert great pressure on its stability and sustainability. To make the agricultural sector more stable and sustainable government is planning to cope with these hazards through various actions and mitigation policies.

Source: Pro Pakistani