LAHORE: The Punjab government has allocated Rs 5.54 billion for energy sector in the annual budget for the fiscal year 2022-23 out of which Rs 0.54 billion is for non-development expenditures while Rs 5 billion for development schemes.

According to details, Rs 2.20 billion has been allocated for design and construction of net zero energy building, followed by Rs 3.43 billion for energy efficiency and conservation programme, Rs 1.53 billion for Punjab Ujala programme, Rs 1.09 billion for solarisation of basic health units, Rs 8.25 billion for Khadim-e-Punjab Ujala programme, Rs 385 million for solarisation of 35 THQs and 100 RHCs, Rs 250 million for solarisation of schools for special children, and Rs 200 million for provision of biogas digesters in villages.

Copyright Business Recorder, 2022

So, there’s going to be no snap election. Imran Khan’s call for the second, decisive march on the capital never came, though he’s still threatening it, and soon enough “imported government” and “foreign conspiracy” will also become stale.

But what does that matter?

Look at it, for a moment, from the people’s point of view. Most of the two-hundred-many-million strong that give the Islamic Republic one of the highest population growth rates in the world and who couldn’t take their minds off of the price list if they wanted to.

This, then, just means that the PML-N (Pakistan Muslim League-Nawaz) government will now take the country closer to bankruptcy, default, ruin, and all that, instead of the PTI (Pakistan Tehreek-e-Insaf) administration over the next year or so. For them (people), nothing changes at all because literally every administration opts for an IMF (International Monetary Fund) bailout programme, implements its excruciating structural adjustment for a while, and then abandons it just before the next election.

Now, though, the situation has reached a breaking point. If you kick the can any further down the road and try to delay implementation of the Fund’s harsh conditions, there’s going to be certain default – something Finance Minister Miftah Ismail finally coughed up at a press conference the other day. But things have come to such a pass only and only because no government ever took the trouble of devising policies to expand and add value to the export basket and give the trade balance a shot in the arm in all these years.

The fact that it is budget time ought to make this thing easier to understand.

Nobody did that, just like the previous government did not do it, because such things require a lot of short-term pain for lasting, long-term benefits. And the problem is that the next election arrives a lot sooner than there’s even a hint of good times down the road.

Plus, in a parliamentary democracy like the one we’re so proud to have at last, there’s always the opposition breathing down your neck. Give the people any pain at all, even if it’s for their own benefit eventually, and you’d have the other lot that’s dying to come to power nailing you on crosses all over the campaign trail next time.

That explains why Imran Khan took Nawaz Sharif to the cleaners for his high-visibility, high-cost projects that allegedly looked good on the resume but wasted more money than they earned and then did pretty much the same things when he came to power. It also explains why, if you observe enough surveys, you come to understand that just about the only difference that different governments or leaders make for most people is that they give them a different name to assign blame for all the problems of the time to; which are also more or less the same even at different times.

That’s why the governments the people vote in cannot take the difficult decisions that are needed to give the economy enough strength to turn around in a few years. That’s not all. The institution of democracy has not just not done us much good, despite all the sacrifices all the politicians claim to have made for it all the time, it has also done us much harm; especially lately.

The no-confidence motion against Imran Khan was, after all, perfectly constitutional and, technically at least, in keeping with the finest democratic traditions of the advanced world. Who’s to blame, then, if the former prime minister very cunningly laid what former interior minister Sheikh Rashid recently referred to as “economic landmines” by suddenly reducing and then freezing petrol and electricity prices?

In an instant, it derailed the IMF programme. And the press didn’t talk about it much at the time, but it also put the Saudi loan and oil facility in very serious danger; since it was contingent upon the bailout programme. And the former PM and his associates were the only people laughing when the new PM initially resisted raising prices, out of fear of severe public backlash which PTI was itching to exploit, even as it did very serious harm to the economy.

Long years of military rule might not have done the country much good. But equally long years of representative democracy haven’t done the people much good either. And since a nation is its people, these people ought to figure out newer, better systems for themselves because soon enough this debt and the interest on it will become unpayable and the country will have to default.

And since government of the people, for the people, etc., didn’t quite work out either, whatever could be next?

Copyright Business Recorder, 2022

KARACHI: Tax experts have expressed concerns over the proposed amendment (section 214A) in the Income Tax Ordinance, 2001, saying that if it is made, it may lead to the taxpayer being at the mercy of the tax officer and FBR. These views were expressed by the tax experts at a post-budget seminar organized by the Karachi Tax Bar Association held at a local hotel here on Wednesday.

Anwar Kashif Mumtaz former president of KTBA in his presentation termed the said proposed amendment as a naked sword to the FBR, which might be used to overcome the shortcomings on the part of the field officer and may lead to the taxpayer being at the mercy of the tax officer and FBR.

He said that all amnesties and benefits provided to the industries through the Ordinance IV of 2022 had been proposed withdrawn vide the Finance Bill, 2022, raising serious concerns about the position of the persons who have already availed of the amnesty or have taken steps to implement it.

Furthermore, he said that as per the pressure of the International Monterey Fund, all exemptions - SECTION 59C, SECTION 60C, SECTION 62, SECTION 62A, SECTION 63 & SECTION 65F. Therefore, the credit allowed for the export of IT services has been omitted and now they will be taxed at the reduced rate of 0.25% of the export proceeds under section 154A of the Ordinance.

Anwar said that the amendment proposed to Section 92 clarified that if the income of the AOP is exempted and no tax is payable under the Ordinance, the share received in the capacity as a member out of the income of the association shall also be exempted.

The sub-section (4) has been expanded by way of insertion of the proposed clarification to bring remittance received through other services to constitute foreign exchange remitted to Pakistan through normal banking channels. A sub-section (5) has been replaced to clarify that a separate notice u/s 111 of the Ordinance shall not be required to be issued for any information where a notice u/s 122(9) of the Ordinance has already been issued seeking or confronting that specific information, he added.

The facility of carrying forward of minimum tax paid on turnover in excess of normal tax has been withdrawn hence now the excess tax is neither adjustable nor can be carried forward, he said; terming the proposed amendment in section 164A as a step to plug revenue the leakage in withholding taxes by appointing specific agent(s) with the synchronized payment withholding system (SWAPS).

He said that the proposed omission of section 216A is to safeguard the officers from any proceedings initiated against them in maladministration and malpractice as the current government was of the view that the existing Section 216A of the Ordinance may instill fear of retribution in officers to take any action against the non-compliant taxpayer, because they may feel that if anything went wrong, they might be prosecuted under the section.

Meanwhile, Saud Ul Hassan in his presentation on indirect tax said that the Bill has now sought to withdraw IT services and IT-enabled services from Table 2 and after the proposed amendments, the rate of sales tax on services provided by software or IT-based system development consultants would be 15%. He said that the import of electric vehicles in CBU conditions, which was subjected to the reduced rate of 12.5%, was proposed to be taxed at a standard rate of tax.

Moreover, he said that a proviso was inserted in Sub-section 3(7), to clarify that in case of sale of third-party goods through an online marketplace, the liability to withhold sales tax on goods shall be on the operator of such marketplace, at the rate provided under the Eleventh Schedule to the ST Act.

Copyright Business Recorder, 2022

ISLAMABAD: The Senate Standing Committee on Finance has declined the Federal Board of Revenue’s proposal to increase the advance tax on the sale and purchase of property from one to two percent for filers in the budget 2022-23. However, the Senate panel extended its support and approved increasing the advance tax from two to five percent on the sale and purchase of property for non-filers.

The Senate Standing Committee on Finance and Revenues continued its day-long deliberations for finalizing recommendations on the Finance Bill, 2022, here at the Parliament House under the Chairmanship of Senator Saleem Mandviwalla Wednesday.

The committee proposed amendments in the Finance Bill 2022, recommending the government to charge one per cent market value as deemed income tax on plots valuing more than Rs25 million after five years of transfer of land.

Initially, the Senate panel rejected the FBR’s proposal to charge one percent market value on plots valuing more than Rs25 million but in their second thought, they recommended that the deemed income should be taxed if the plot did not construct in five years period.

The Senate panel also proposed amendments in the Capital Gains Tax (CGT) on the holding period and recommended that the holding period of the plot should be reduced from six to five years and revive the existing slabs for payment of CGT.

A meeting of the Senate Standing Committee on Finance has recommended to the Federal Board of Revenue (FBR) to maintain capital gains tax at one percent on disposal of securities and expressed concerns over tax on deemed income of assets (open plots).

As the proceedings of the committee started with Senator Saleem Mandviwalla in the chair on Wednesday, President Islamabad Chamber of Commerce and Industry (ICCI) Sardar Yasir Ilyas Khan raised the issue of measures proposed in the finance bill about the construction sector and contended that if implemented these would have serious implications on the construction industry but would also dampen growth of overall industry primarily because a large number of other industries are either directly working for the construction industry or indirectly associated with it.

The ICCI office bearers also pointed out that in the federal capital alone more than Rs240 billion projects were initiated during the last eight months and now the advance tax for filers has been proposed to be increased from one percent to two percent and for non-filers to five percent.

Of course increase in advance tax on non-filers is understandable with the objective to document them but an increase in advance tax on filers in no way appears justiciable.

The sectors related to home furnishing, decoration, electrical equipment, appliances, electronics, curtains, flooring, kitchenware, cupboards and many more would also be negatively affected as the construction of new houses goes down, Yasir added.

The committee members, Mohsin Aziz, Talha Mehmood, Dilawar Khan, and others stated the proposed measures would have a negative impact on industrial growth and result in more joblessness in the country. The meeting of the finance committee also approved the imposition of levy on mobile phones after it was informed that it is being imposed on high-value mobiles and would yield projected revenue of Rs670 million.

The documented steel sector has asked the Senate Standing Committee on Finance to restore the minimum tax carry forward facility which was withdrawn in the budget (2022-23).

Pakistan Large steel producers informed the Senate Standing Committee on Finance on Wednesday that the minimum tax paid on turnover in excess of normal tax liability (including nil tax due to losses or exemption) was so far available for adjustment against normal tax of subsequent five tax years. This facility of carry forward is now proposed to be withdrawn.

The delegation informed that due to high interest rates, currency devaluation, unprecedented increase in the prices of scrap internationally, drastic increase in electricity prices, the local steel industry is going through a serious crisis. In this situation, there is a need of urgent measures to save the local industry from closure or getting stifled.

The section 8B (1) restricts the adjustment of input tax to the extent of 90 per cent of the output tax in relation to the tax period. Through the Finance Act, 2021, as exception to the above restriction was introduced for public limited companies listed on Pakistan Stock Exchange. The bill now seeks to remove the above exception and public limited companies listed on PSX will also not be able to adjust their input tax, excessive of 90 percent of their output tax for a tax period. Thus, 100 percent input must be allowed to steel sector units regardless of their type individual, AOP, partnership, private limited company or a public limited company.

Officials of the Pakistan National Heart Association told the committee that one in three people in Pakistan is diabetic and the use of beverages is increasing the incidence of obesity, heart disease and cancer, whereas, Pakistan beverage tax is very low as opposed to India and Saudi Arabia.

They added that Pakistan National Heart Association demands the imposition of excise 20 percent duty on sugar-related drinks. The meeting was further informed that there is a 13 percent tax on soda and no tax on juices.

The Federal Board of Revenue (FBR) chairman stated that this tax can be imposed only when the track and trace system is in place and stated that it would take one year to the FBR for putting in place the track and trace system on beverages. He further stated that this proposal to impose tax on beverages is in the benefit of the tax authorities but there is a need to listen to the viewpoint of the industry.

The FBR chairman has again solicited proposals from the representatives of the beverage industry and the Pakistan National Heart Association and invited them in the next meeting in this regard.

Copyright Business Recorder, 2022

EDITORIAL: A 33.84 billion rupee deficit budget was presented by the Sindh Chief Minister Murad Ali Shah amidst the usual Opposition uproar prompting him to wear ear plugs during his speech yet another year. This contrasts with the balanced budget presented by the Khyber Pakhtunkhwa government and which, in turn, places the onus of generating the 800 billion rupee provincial surplus earmarked in the federal budget as well as the 33.84 billion rupee provincial deficit on Punjab and Balochistan.

However, as Balochistan is an underdeveloped province with no capacity to generate surpluses it stands to reason that unless Punjab government budgets an 833.84 billion rupee surplus for next year the federal government would not only have to: (i) make good this large amount through additional taxation measures that it budgeted without obviously any meaningful consultation with a key coalition partner, notably the Pakistan People’s Party (PPP) in Sindh; and/or (ii) slash the budgeted expenditure over and above the amount that would have to be negotiated with the International Monetary Fund — the 200 to 250 billion rupee cut in the PSDP budget was reportedly under discussion before the passage of the two provincial budgets — a cut politically and economically not tenable.

Syed Murad Ali Shah stated that the budget was prepared subsequent to consultations with all stakeholders but clearly the federal Finance Ministry was not considered a stakeholder. It is important to note that the Sindh deficit is computed on the available resources which consist mainly of the province’s share of the divisible pool taxes (collected by the Federal Board of Revenue) as per the National Finance Commission award and are based on the federal budgeted projections.

As the federal budget is not yet approved from parliament it has to be seen if all budgeted taxes are approved by parliament and not challenged in the court of law (as feared with respect to the tax on deemed income on non-productive immoveable property projected to generate 30 billion rupees). Thus the Sindh budget’s projection of 1.055 trillion rupees as federal transfers (comprising 62 percent of total envisaged transfers) may be an overestimate as in previous years.

The Sindh government has not imposed any new taxes for the second year running and waived off cotton fees, professional tax, entertainment duty and infrastructure development cess for export-oriented industrial units. However the province’s own resources have been budgeted at 167.5 billion rupees and, in addition, 180 billion rupees sales tax on services is an impressive total of 347.5 billion rupees (a rise from last year’s budgeted 304.9 billion rupees) when compared to other provinces.

It must be, however, borne in mind that the federal budget has projected a growth rate of 5 percent for next fiscal year — a projection that is unlikely to be realised especially if the seventh IMF review is a success as its fallout is expected to be the implementation of severe contractionary monetary (already in place but likely to become even more contractionary in weeks to come) and fiscal policies.

Like the federal and KPK governments the Sindh government raised salaries by a whopping 15 percent with disparity allowance of 33 percent of basic pay to BPS 1 to 16 and 30 percent to PBS in grade 17 and above while pensions would be increased by 5 percent (well below the rate of inflation). The obvious thrust being to keep the serving bureaucrats happy while the pensioners will be given a raise well below the Sensitive Price Index of over 21 percent.

However, what must be appreciated is that the outlay on education has been raised to 326 billion rupees comprising 25 percent of the entire budget while health is budgeted to receive 230.3 billion rupees (against 181.2 billion rupees last year), more than 19 percent of the total outlay. Agriculture and irrigation has been earmarked 36 billion rupees — with irrigation receiving the lion’s share of 24 billion rupees.

Water and sewerage sector is allocated at 224.675 billion rupees, solid waste management board 12 billion rupees (4 billion rupees more than 2021-22) and law and order 124.8 billion rupees (against 119.8 billion rupees in the outgoing year). Development schemes have been earmarked 332 billion rupees while social protection department has been earmarked 15.435 billion rupees.

Wheat subsidy for the public has been earmarked 23.32 billion rupees and pro-poor relief 26.85 billion rupees — subsidies in line with those extended by the federal government. To provide subsidies on food items has been a major policy thrust of the coalition government — at the centre and in the Sindh budget considered necessary to ensure that the food needs of the poor and vulnerable are met as much as is possible given the limited available fiscal space and of course to minimize any negative political fallout due to rising inflation.

Copyright Business Recorder, 2022

LAHORE: The Punjab government has slashed powers of Speaker of provincial assembly through an ordinance promulgated by Punjab Governor Balighur Rehman declaring that whenever the Punjab Assembly session is prorogued, the Law and Parliamentary Affairs Department shall issue notifications regarding summoning or prorogation of the Provincial Assembly of Punjab.

The ordinance titled ‘the Punjab Laws (Repealing and Removal of Difficulties) Ordinance 2022’ was issued by the Governor in exercise of powers conferred under clause (1) of Article 128 of Constitution of the Islamic Republic of Pakistan. Through the ordinance, the laws titled the Provincial Assembly of the Punjab Secretariat Services Act 2019 (IX of 2019), the Provincial Assembly of the Punjab Privileges (Amendment) Act 2021 (XXI of 2021); and the Provincial Assembly of the Punjab Privileges (Amendment) Act 2021 (XXVI of 2021) also stand repealed.

Through the Ordinance, the government has abolished the independent status of the Punjab Assembly bringing it under the domain of law department. Moreover, the services of Punjab Assembly Secretary Muhammad Khan Bhatti, who was serving there since 2008, were placed at the disposal of law department, sources said.

Speaker says PML-N does not enjoy majority

Punjab government spokesman Ataullah Tarar told media that now the Punjab Assembly speaker had been stripped off his powers to punish civil bureaucrats. From now onwards, no journalist could either be barred from entering the assembly’s building or punished, he said. “They don’t want the people of Punjab to suffer; hence, the session had been convened outside the Punjab Assembly.”

Tarar said the government has repealed three laws through issuance of an ordinance. He regretted that the PTI had linked holding of the assembly’s budget session with the withdrawal of cases registered against them. He said he has invited Speaker Pervaiz Elahi to come to the Aiwan-e-Iqbal and chair the session called by the Governor.

Speaking on the occasion, Malik Ahmed Khan held PA Speaker Chaudhry Pervaiz Elahi’s ego responsible for delays in the start of the budget session. He said “presentation of budget is constitutional requirement; hence, we fulfilled our constitutional obligation.” He regretted that mockery of law was made just for vested political interest. To a query, he said the Governor has powers to call the assembly session anywhere.

On the other hand, PML-Q President Chaudhry Shujaat Hussain said on Wednesday it appeared that the Punjab government had convened the provincial assembly’s budget session at Aiwan-e-Iqbal only to curtail the assembly’s powers.

He urged members of the Punjab Assembly to attend the session which was being held inside the assembly’s building in order to assert their authority. Today, the country’s politics have become the monopoly of jugglers,” he said. “I am afraid they will end up making fun of the country in the process.”

Moreover, Punjab CM Hamza Shehbaz, while chairing a meeting of the provincial parliamentary party of PML-N and allies ahead of budget session at Aiwan-e-Iqbal, said that some egoists had created a crisis over the last three months.

He said the budget could not be presented during the last three days as the opposition and the Speaker hatched a ploy but they had been exposed before the people. In the provincial budget, relief would be given to the people and the journey of service to the people would continue with humility, he said. “We would continue to work day and night to heal the wounds of the people,” he said. “The government was standing with the guardians of the constitution and the law. If these officers had not performed their duties, the province would have become a banana republic.”

“During the election of chief minister, the uniform officers were kicked and punched and everyone knows how the thugs in the House were clinging to the deputy speaker,” he said.

Provincial Law Minister Malik Mohammad Ahmad Khan said that every possible effort was made for reconciliation and the budget was put on hold due to childish moves. The governor holds the constitutional and legal authority to decide the time and place of the meeting, he added.

Copyright Business Recorder, 2022

LAHORE: Punjab government has allocated Rs685 billion for the Annual Development Programme (ADP) 2022-23. In terms of development sectors, the highest allocation of Rs272.6 billion is for the social sector which includes Rs172.5 5 billion for health sector and Rs64 56 billion proposed for education sector. Rupees 164 billion have been allocated for infrastructure development including Rs80.8 billion for roads sector.

Major programmes/initiatives for the FY 2022-23 include sustainable development programme for South Punjab at a cost of Rs31.5 billion, Rs58.5 billion for sustainable development programme, Rs125 billion for universal health insurance programme, Rs1 billion for establishment of Nursing University at PKLI, Rs3.65 billion for the transformation of agriculture in Punjab, Rs4.8 billion for afternoon school programme, establishment of universities in five major cities at a cost of Rs1.7 billion, Rs5.5 billion for the construction of additional classrooms, Rs10.9 billion for road maintenance rehabilitation programme. The other initiatives include provision of laptops at cost of Rs1.5 billion, revamping of THQ and DHQ hospitals at cost of Rs3.1 billion, skill development programme (4.2 billion) and Punjab Urban Land Systems Enhancement (Rs0.5 billion).

Punjab proposes budget outlay of over Rs3.226trn

Furthermore, the salient features of the Development Portfolio 2022-23 include economic development through public investment, inclusive and balanced regional development, transformation of agriculture sector, ensuring water and food security, human development through skills development, creating an environment conducive to mobilizing private sector resources, support for public-private partnerships, strengthening governance through information technology and bridging the gender divide.

Copyright Business Recorder, 2022

LAHORE: The Punjab government Wednesday presented Rs 3.226 trillion provincial budget for the fiscal year 2022-23 after much delay at Aiwan-e-Iqbal instead of Punjab Assembly as the treasury and opposition benches failed to reach a consensus on convening a session.

After a two-day delay, provincial minister Sardar Awais Leghari while presenting the budget termed it a “pro-poor and pro-development”. The opposition and the government convened two separate sessions at the Punjab Assembly and Aiwan-e-Iqbal, respectively. The former’s session started but was adjourned till 1:00 pm today (Thursday), while the budget session started after 4:00 pm.

The opposition’s session took place at Punjab Assembly with Speaker Chaudhry Pervaiz Elahi in the chair. During the session, the opposition lawmakers criticised the government and PML-N leader Ataullah Tarar who was asked to leave the Punjab Assembly two days back during the first session of the budget.

The opposition stuck to their demand that the inspector-general and chief secretary should appear during the session. As a result, the two sides could not develop a consensus over the issues. Presenting the budget proposals, which were earlier approved by the cabinet, Leghari criticised the previous PTI-led government, saying its policies stalled development in the province for the last three years.

Punjab budget 2022-23: PA pandemonium prevents budget presentation

“Data shows that during the period 2019-22, there has neither been a single development programme worth mentioning nor has the province witnessed any social welfare programme,” he said, blaming the PTI government for “wasting their three years in framing false cases” against the opposition. Recalling the last budget of the PML-N government for the fiscal year 2017-18, the minister highlighted that at the time the country’s GDP growth was rising at a steady pace and that the per capita income had reached $1,629. He added that foreign investment was pouring in as Pakistan was declared an investment-safe country, the stock market was the second-best in Asia and international institutions were recognising Pakistan’s growth. The provincial minister accused the PTI-led government of not paying attention to the energy issues which led to other issues including unemployment, poverty, inflation, etc.

Awais Leghari said that the total outlay of the budget is 3.226 trillion which is 22 percent higher than the current budget. Out of this amount, Rs 1,712 billion have been proposed for running expenditures while the total outlay of development budget is Rs 685 billion.

As per budget documents, the total income has been estimated at Rs 2.521 trillion.

It is estimated that over Rs 2 trillion will come from the federal divisible pool. It has been estimated that more than Rs 500 billion will be collected under the head of provincial receipts which is more than 24 % as compared to last year.

It is expected that the government has set the target of collection of Rs 190 billion from Punjab Revenue Authority which is 22 percent more as compared to last year.

The collection target of Rs 95 billion has been set from the Board of Revenue which has been increased by 44 %.

The government has proposed an increase of 2 percent of the excise department and set the target of collection of revenue of more than Rs 43 billion. The government has proposed an increase of 24 % in the non-tax revenue and set the target at Rs 163 billion. The government has increased the ratio of stamp duty from 1 percent to 2 per cent. It is pertinent to mention that the government has allocated 35 % of the total Annual Development Program for South Punjab.

It has allocated a handsome amount of Rs 240 billion for different development projects in South Punjab.

He said the PML-N government attaches priority to the health sector and decided to restore free medicines facilities in the hospitals. An amount of Rs 470 billion has been set aside for the health sector in the budget 2022-23, which is 27% higher than the previous year (2021-22) budgetary allocation of Rs 369.3 billion. An amount of Rs 296 billion has been reserved for non-development expenditures while Rs 174.5 billion have been allocated for development expenditures.

Rupees 485.26 billion have been proposed for the education sector which is 10-percent higher from current year budgetary allocations.

Out of this amount, Rs 428.56 billion have been proposed for non-development budget while Rs 56.70 billion have been set aside for development expenditures.

For schools education, Rs 421.6 billion have been proposed while Rs 59.7 billion reserved for higher education.

Rupees 1.52 billion have been allocated for special education while Rs 3.59 billion have been allocated for literacy and non-formal basic education.

The Annual Development Portfolio 2022-23 has been set at Rs 685 billion.

In terms of development sectors, the highest allocation of Rs. 272.6 billion is for the social sector which includes Rs. 172.5 5 billion for the health sector and Rs. 64 56 billion for education sector, Rs. 164 billion has been allocated for infrastructure development including Rs. 80.8 billion for roads sector.

Major programs/initiatives for the FY 2022-23 include sustainable development program for South Punjab at a cost of Rs. 31.5 billion, Rs. 58.5 billion for sustainable development program, Rs. 125 billion for universal health insurance program, Rs. 1 billion for establishment of Nursing University at PKLI, Rs. 3.65 billion for the transformation of agriculture in Punjab, Rs. 4.8 billion for afternoon school program, establishment of universities in 5 major cities at a cost of Rs. 1.7 billion, Rs. 5.5 billion for the construction of additional classrooms, Rs. 10.9 billion for road maintenance rehabilitation program.

The other initiatives include provision of laptops at cost of Rs. 1.5 billion, revamping of THQ and DHQ hospitals at cost of Rs. 3.1 billion, skill development program (4.2 billion) and Punjab urban land systems enhancement (Rs. 0.5 billion).

Furthermore, the salient features of the Development Portfolio 2022-23 include economic development through public investment, inclusive and balanced regional development, transformation of agriculture sector, ensuring water and food security, human development through skills development, creating an environment conducive to mobilizing private sector resources, support for public-private partnerships, strengthening governance through information technology and bridging the gender divide.

As per the budget documents salaries of all government employees have been increased by 15% and pensions by 5%.

In addition, a special allowance has been proposed in the budget to reduce the widening gap between inflation and rising income rates.

Employees from Grade 1 to Grade 19 will be given a 15% increase in basic salary.

Minimum wages will be increased from Rs. 20,000 per month to Rs 25,000 per month, Rs 435 billion have been earmarked for salaries, 312 billion for salaries and Rs 528 billion have been earmarked for local governments.

The government has allocated more than Rs 23 billion for the development of industry out of which over Rs 12 billion are marked for development projects. The government has allocated Rs 5 billion in the development budget of the energy department.

Earlier, the session chaired by Elahi resumed at 2:40pm, over 1.5 hours later than scheduled, and began with prayers for deceased MNA Aamir Liaquat Hussain, former Federal Investigation Agency (FIA) director Mohammad Rizwan who probed the money laundering charges against Prime Minister Shehbaz Sharif and Chief Minister Hamza Shehbaz and died of a heart attack last month and Malik Maqsood Ahmad — frequently referred to as Maqsood ‘Chaprasi’ — a central figure in the money laundering case, who passed away in the UAE earlier this month.

Later, PTI Central Punjab president Dr Yasmin Rashid moved a privilege motion against provincial minister Ataullah Tarar for making an “obscene gesture” and violating the privilege of the assembly. PTI’s Momina Waheed said Tarar’s gesture had “violated women’s dignity”. The motion was accepted and the speaker sent it to the relevant committee to decide within two months.

Meanwhile, Mian Mohammad Aslam Iqbal, another lawmaker of the former ruling party, said PML-N Vice President Maryam Nawaz should have condemned Tarar’s actions. “I have been told to speak less [but] we are not sold. We are standing with [former prime minister] Imran Khan,” he asserted.

Former law minister, Mohammad Basharat Raja, demanded that the room allotted to Tarar in the provincial legislature be taken back.

He also claimed that the incumbent Punjab government wanted to arrest lawmakers on a “large scale”.

The session chaired by Elahi also rejected the Punjab Laws (Repealing and Removal of Difficulties) Ordinance 2022, which was promulgated by the governor yesterday, which stated that the secretary of the law and parliamentary affairs department would issue notifications when the governor or speaker summoned or prorogued a session.

The ordinance also repealed the Provincial Assembly of the Punjab Secretariat (Services) Act 2019, the Provincial Assembly of the Punjab Privileges (Amendment) Act 2021 (XXI of 2021) and the Provincial Assembly of the Punjab Privileges (Amendment) Act 2021 (XXVI of 2021).

The amendment law had added a schedule to the original 1972 Act, prescribing punishment to a bureaucrat for breach of privilege of the House, any of its committee or member and granting judicial powers to the speaker and/or the committee named by him or the House on the breach.

Reacting to the ordinance in today’s session, Raja termed it a “shameful act”. He claimed that Punjab Chief Minister Hamza Shehbaz had “pleaded” for the amendment law to be passed. Subsequently, the session chaired by Elahi was adjourned till 1pm on Thursday (June 16).

Copyright Business Recorder, 2022

ISLAMABAD: The Senate Standing Committee on Finance has recommended that the issue of declaring production/transmission of electricity as “goods” under the Sales Tax Act, 1990 should be referred to the Council of Common Interests (CCI) or National Tax Council (NTC).

Senate Standing Committee on Finance, Revenue and Economic Affairs met on Tuesday under the Chairmanship of Senator Saleem Mandviwalla to consider and finalize the recommendations on the Finance Bill, 2022, here at the Parliament House.

Mandviwalla asked the FBR why the updated Finance Bill, 2022 with the changes made by the federal cabinet after the federal budget (2022-23) was not presented before the committee.

The Federal Board of Revenue (FBR) Chairman, Asim Ahmad, responded that the FBR has presented the Bill 2022 which was tabled before the parliament. The updated Finance Bill 2022 with the amendments made by the cabinet will also be submitted before the committee.

During the review of the Finance Bill 2022, the committee Tuesday ruled that the FBR cannot unilaterally declare production/transmission of electricity as “goods” for collection of sales tax through Finance Bill 2022 but the matter should be referred to the CCI or the NTC.

The production transmission and distribution of electricity which was brought into the ambit of the definition of goods was unanimously omitted by the committee.

The meeting presided over by Senator Mandviwala while taking up the proposed amendment in the Finance Bill 2022 with regard to production, transmission, and distribution of electricity was informed that this amendment was proposed in the background of double taxation on Matiari as provinces are collecting sales tax on services and the federal government has been collecting sales tax on goods. This entails double taxation by the federal and provincial governments, whereas, electricity is a federal subject and the amendment was moved to do away with double taxation.

The FBR Member Inland Revenue Policy informed the committee that a power company received notices from two provincial revenue authorities/board for recovery of sales tax on production, transmission and distribution of electricity by treating it as service. This resulted in double taxation which needs to be corrected through the Finance Bill 2022.

Chief Inland Revenue informed that under the Constitution, electricity is a federal subject. In Finance Bill 2022, we have already resolved the issues of collection of sales tax on restaurants and toll manufacturing. Provinces would now collect sales tax on restaurants and FBR on toll manufacturing, she added.

Upon this, Senator Farooq H Naek said that the FBR cannot unilaterally declare production, transmission and distribution of electricity as “goods” under the Sales Tax Act 1990. This is an issue between federal government and provinces, therefore, the relevant forum for its resolution is either CCI or NTC. The committee recommended that the issue of sales tax to be referred to the CCI or the NTC.

The FBR Member IR (Policy) informed that the jewellers would pay a fixed amount of Rs50,000 sales tax per month with electricity bills. There are around 29,000 jewelers and all such jewelers would be considered as Trier-I category retailers.

On the issue of taxing 2.5 million retailers through electricity, the chairman said that “you are not doing this in erstwhile federally administered tribal areas (FATA)”. The chairman of the committee said that last time it was discussed and recommended that FBR should start collecting from the units on the basis of consumption of power through electricity bills. He regretted that the government wanted to charge retailers but does not wanted to collect from units set up in erstwhile FATA.

Responding to this, the FBR Member Inland Revenue Policy informed the committee that the units having zero-percent electricity bills in tribal areas were given zero percent quote of duties and taxes free import of industrial raw materials and inputs.

Senator Dilawar Khan said that FBR has WeBOC import data and can easily assess the capacity of the steel units but regretted that the tax authorities were not touching this area. “if you really wanted to collect tax then you have to touch this area”, he added. The committee approved the proposal to restore sales tax exemption on UN, diplomats as well as machinery and equipment.

The meeting commenced by examining the Customs Act, 1969 and various proposals forwarded by members of the upper House were taken into consideration. The committee was briefed by the Custom Authorities on various insertions of new clauses definitions/objectives.

The Senate committee emphasized making the law more clear and comprehensive enough to avoid the chances of misuse due to ambiguity. “Enforcement of taxation laws should be through bills and not ordinances”, Chairman Finance Committee Senator Mandviwalla maintained.

The committee was briefed by the Customs Authorities that the volume of trade is increasing and 74 government agencies aboard has come together through an online regulatory system on one-time basis submission of documents and termed it as a golden jump in terms of trade volume.

It was also briefed that the insertion of new clause on “unauthorized access” was introduced in order to align the Customs Act, 1969, with the Pakistan Single Window (PSW) Act. The committee recommended that the definition “un-authorized access” is open-ended and can make means to create offences therefore proposed clarity in the definition.

The committee was also briefed that the essential commodities like food items, fertilizers and other items of daily use are prone to smuggling out of the country through all international borders due to disparity in their prices in comparison with the international market, smuggling of items may result in their shortages in the domestic market causing exponential hardship to the common man of the country, therefore, proposed to define “essential commodities”.

The committee was also briefed on the Import Policy Order, 2020, which provides option of change in consignee name for frustrated cargo by Customs Authorities while Customs Act, 1969 only provides option of re-export or re-shipping of frustrated cargo, therefore, the amendment has proposed to align customs act 1969 with Import Policy Order, in order to resolve the congestion caused on the port by the un-owned cargoes.

Leader of the Opposition Senator ShehzadWaseem sought details particularly on defining the “changed consignee” and under what circumstances. The amendment was deferred for further explanation by the Customs Authorities in the next meeting.

The amendment of the collective customs to time to time fix the period after the expiration of which goods left in any customs house, shall be subject to payment of fees, was unanimously omitted by the Senate Committee.

The Sales Tax Provision of Finance Bill, 2022-23 was also taken under consideration.

The tax on goods imported by various agencies of the United Nations, Diplomats, Diplomatic missions, and other privileged persons and organizations which are covered under various acts and regulations have been exempted. Tax on silver and gold in unworked condition, tractors, seeds for sowing and imported machinery equipment for exclusive use was also exempted. Senator ZeeshanKhanzada gave descending note on the exemption of taxes on gold, silver and sowing seed, whereas, Senator SaleemSabzwari only gave his descend note on the exemption of tax on sowing seed.

The meeting was deferred to meet again on Wednesday at 10:30 am for further deliberation on the sales tax provision of the Finance Bill, 2022

The meeting was attended by the Leader of the Opposition, Dr Senator Shahzad Waseem, Sherry Rehman, Farooq Hamid Naek, Mohsin Aziz, Faisal Saleem Rehman, Zeeshan Khanzada, Syed Faisal Ali Subzwari, Senator Talha Mahmood, and Senator Dilawar Khan.

Senior officials from the Ministry of Economic Affairs, Customs Authorities, the FBR, and other attached departments were also in attendance.

Copyright Business Recorder, 2022

ISLAMABAD: Federal Minister for Finance Miftah Ismail, Tuesday, while stressing the need for reforming the energy sector has said that the failure to reform the power sector will bring more serious consequences to the national economy.

Addressing a post-budget seminar here, he said that if the sector was not reformed it will ruin the national economy. He also expressed serious concerns over mounting circular debt in the energy sector, saying it has reached to Rs4,000 billion mark within the past five years which in 2013 was totally laid off by the Pakistan Muslim League (PML-N) government.

The minister said that despite the country having one of the most efficient power plants but owing to the most inefficient billing and decision-making process, the power sector is creating serious problems for the government.

He said that as a result of inefficient billing and decision-making process the energy sector-related total circular debt has reached Rs4,000 billion, of which, Rs2,500 billion power sector and Rs1,500 billion gas sector.

He said that at present, many furnace oil-based power plants are using coal as a fuel which costs $300 per ton while the consumers are paying $50 dollars and the government is supplying coal to the power plants on one year earlier contract as a result the government is forced to pay $250 subsidy for each ton of coal being consumed in a power plant. He added that for the past 20 years, coal prices remained hovering around $50 per tons but after Covid-19 it has suddenly reached $300 per ton.

The minister said that when in 2013 the PML-N came into power the total circular debt was Rs500 billion and the PML-N government laid off almost the entire circular debt excluding Rs23 billion as it was disputed. He said that in the past debt servicing, defence and Public Sector Development Program were the largest expenditures but now debt servicing and circular debt has taken over all other heads.

He said that former Pakistan Tehreek-e-Insaf (PTI)-led government during over three years rule added 79 percent to the country’s national debt including liabilities, adding that former finance minister Shaukat Tareen has admitted that the PTI government added 76 percent to the national debt.

The minister said that the NEPRA system is too complicated which a common educated person cannot understand. He said that owing to the inefficient power pricing system, at present, per unit electricity costs Rs32 unit which in reality is Rs18 per unit. He said that the government paid Rs1,600 billion on behalf of power and gas consumers, of which, Rs1,100 billion subsidy goes to power consumers rest was paid to the gas consumers.

Capacity cost per unit of power plants on coal is Rs4 per unit, and variable cost of coal is Rs30 per unit. Similarly, LNG variable cost is Rs16 per unit and capacity cost when plants were installed was Rs1.9 unit which now has jumped to Rs3 per unit.

The minister said that the government has earmarked Rs800 for the PSDP for the next year while for the ongoing financial year it is Rs550 billion.

Speaking on the occasion, State Minister Finance Dr Pasha said that the country could not deal with the current account deficit and the budget account deficit without bringing serious structural reforms.

Pakistan needs $37 billion external funding for the next year which has been committed with global lending institutions by the former government. She said that friendly countries could not financially help Pakistan just to pay in subsidies and if the country is getting some kind of financial help it is not going to work in the long run. “To become self-sufficient, structural reforms are inevitable for Pakistan”, she said and adding no one should politicise the economy.

To put the country on the path to sustainable economic growth all the people of the country have to share the burden and nobody should politicise the economy.

Copyright Business Recorder, 2022

KARACHI: Out of the total budget outlay of Rs 1.7 trillion, the Sindh government has reserved only 2 percent, ie, Rs 34.217 billion for development of education sector in its financial plan for the year 2022-23.

As per budget documents, the provincial government allocated Rs. 100 million for upgradation of primary school to elementary school with allied facilities.

The government would spend Rs 1 billion for establishment of Campuses of Public Sector Universities in seven districts of Sindh - Korangi, Karachi West, Keamari, Malir, Tando Mohammad Khan, Tando Allah Yar and Sujawal.

Some Rs 100 million have been allocated for establishment of Comprehensive High Schools (10 units) Sukkur whereas same amount of Rs. 100 million allocated for Establishment of Comprehensive High School in other districts of the province

The provincial government has earmarked Rs 27 million for establishment of Science Museum at Divisional Headquarter. For Larkana city, Rs 111 million have been allocated for construction of building of Govt. Special Education & Rehabilitation Center of Excellence Autism Center.

The government has also proposed to allocate Rs 200 million for construction of residential units at new campus of People University of Medical and Health Science for Women Nawabshah.

With Rs 16.5 million, a building for Government boys higher Secondary School Saeed Khan Leghari would be constructed.

The non-development allocations of education budget for the year 2022-23 is Rs. 292.47 billion.

In his budget speech, the chief minister Sindh mentioned that the Universities and Boards Department is going to establish 1st fully integrated Science and Technology Park spread over 1.3 Acres of land within the premises of NED University of Science and Technology, Karachi Campus in public private partnership mode at cost of Rs. 1 billion.

The Universities & Boards Department has also proposed to solarize the public sector universities to save the energy as well as expenditure of the 29 universities. The department is also going to establish “Institute of Pharmacy Liaquat University of Health Sciences (LUMHS), Jamshoro” to produce 80 Pharmacists every year.

Copyright Business Recorder, 2022

KARACHI: The Sindh government has earmarked Rs 152.08 billion for law and order in its budget for the financial year 2022-23. As per budget documents, the provincial government has proposed budgetary allocations of Rs. 141.12 billion under the head of non-development (CRE), as major chunk of Rs 109.96 billion has been allocated for police department, whereas around Rs 9.36 billion has been fixed for home department, Rs 5.55 billion for prisons, and Rs 16.31 billion for law and parliamentary affairs.

Similarly the government has allocated Rs 10.96 billion development budget for law and order, of which Rs 9.20 billion has been proposed for Home department (including police and jails) while the rest of Rs 1.76 billion has been tagged for law and parliamentary affairs.

Government of Sindh has established special police force in Sindh police with strength of 400 police personnel for protection of worship places of minorities. To overcome anti-terrorists activities in the province, the provincial government has provided/ shifted 22 posts of various designations along with provision under the Head of Account for establishment of a separate “Specialist Bomb Disposal Cadre” in Special Branch. It has also increased Rs. 200 million in feeding diet food charges for better diet of prisoners at district/ central prison and judicial lockups throughout the province.

Rs 10.96 billion development budget will be utilized for a number of projects. Construction of residential complex for officers/ officials of High Court of Sindh will be carried out with Rs.345.856 million. The budget includes conversion of Old Annexe Building into 12 Courts of Sindh High Court of Sindh with Rs.50 million. Construction of new women police stations in various districts of Sindh (one stop protection centre) Phase-I with Rs.185.410 million, establishment of forensic laboratory in Sindh at Karachi with Rs.1000 million, establishment of Sindh Safe Cities Project (Phase-I) with Rs.5000 million, construction of District Jails at Thatta for 250 Prisoners (Remaining /allied works) with Rs.175 million.

The Sindh Chief Minister Syed Murad Ali Shah while presenting budget for the FY-2022-23 at the Sindh Assembly here on Tuesday said that law and order has always remained one of the primary focuses of Government of Sindh. We are constantly trying our best to provide safe and protected environment to the people and it is our responsibility to protect the life and property of the people, he said.

Recently there have been few very unfortunate terrorist incidents across Karachi. There were three blasts in Karachi Sadder area and one suicide blast on the premises of University of Karachi killing four people including three Chinese nationals. These incidents have been extremely concerning for the Government of Sindh. Consequently, we have made significant improvements in intelligence analysis by actively engaging all law enforcement agencies. The government is trying its best to ensure that proactive measures are taken to counter the recent wave of terrorism, he said.

In acknowledgement of the sacrifices rendered by the Chinese nationals, killed in the recent Karachi University blast, Arts & Social Sciences Auditorium at University of Karachi will be named after the deceased Chinese, he said.

He said during the current financial year, several milestones were achieved. He said Rs. 500 million have been disbursed as compensation among families of Shuhada and injured personnel of security forces.

Around Rs.1 billion have been distributed among Police personnel and their families as financial assistance. During last three financial years modern weaponry at Rs. 2.274 billion has been procured for police department. 13 Crime Scene Units in investigation wing of Karachi Police have been established and 23 more are being established in other districts of Sindh. Engraving machines have been purchased for forensic department.

The Government of Sindh has established “Sindh Prison staff Training” Institute in Hyderabad for training and capacity building of Sindh’s Prison staff. For the next financial year 2022-23, the government of Sindh has provided funds amounting to Rs.57.578 million as Grant-in-Aid on account of Committee for the Welfare of Prisoners for provision of Legal Aid Services to Prisoners, Educational Services to Women Prisoners/ Juvenile Prisoners, providing fine (in cash) to those prisoners, who are unable to pay their fines, etc.

He said besides, construction of 10 additional barracks (each for 100 prisoners) at District Prison Malir, Karachi is under way. Other important initiatives of the department include: Construction of Hospital Block at District Prison Sanghar; construction of Psychiatric Ward at District Prison Malir Karachi; construction of Anti-Terrorism Courts in the premises of Central Prison Karachi; establishment of oversight committees in every district that will visit and report to IG Office.

Copyright Business Recorder, 2022

LAHORE: The Punjab government has proposed a sum of Rs19.53 billion as the Annual Development Programme (ADP) collectively for the agriculture, irrigation and livestock sectors for the year 2022-23.

The allocation of the development budget for agriculture according to the budget documents stands at over Rs14 billion and a sum of Rs3.65 billion out of it will be spent on ‘Punjab Resilient and Inclusive Agriculture Transformation (PRIAT). Under this project the government aimed at bringing in latest international technology to transform the agricultural sector on modern lines.

The government also intends to introduce eight new programmes under the research & development head to make possible increase in per acre yield of different lentils, peanut, blackberry and other high valued crops. It is hoped that it would increase prosperity in the rural folk.

According to the documents, the government also intends to promote incentive based crop zoning under which zoning of land of Punjab province will be carried out according to the potential of the lands and incentives and facilities will be provided to farmers of these areas according to it.

The government has proposed an allocation of Rs1 billion for rehabilitation of old bulldozers, Rs0.42 billion for godowns of food for testing facilities and Rs1 billion for the national programme for improvement of watercourses in Pakistan.

For livestock sector, the government has allocated a sum of Rs4.29 billion for the year 2022-23 to carry out various development schemes such as setting up of a sub-campus of the University of Veterinary and Animal Sciences. While another sum of Rs1.58 billion will be spent for launching of a programme to provide various facilities for livestock farmers in Lahore, DG Khan, Bahawalpur, Rawalpindi and Sargodha which are not available currently. It is proposed that Rs600 million will be spent during the next fiscal under this head.

Copyright Business Recorder, 2022

LAHORE: In the Punjab Budget 2022-23, the Punjab government has proposed an allocation of Rs 240 billion, 35 percent of Punjab’s total development budget of Rs 685 billion, for south Punjab.

According to the budget documents, the allocation was ring fenced for south Punjab, meaning that the funds proposed for the region cannot be utilised for other parts of the province.

Of the total allocation, the government proposes to spend Rs 31,500 million on Sustainable Development Programme for South Punjab, Rs 2,879 million on the southern Punjab Poverty Alleviation Project (SPPAP), Rs 400 million on the Chief Minister’s Stunting Reduction Programme for 11 southern districts, Rs 250 million on Establishment of Futsal Courts, Rs 250 million on major rehabilitation/augmentation and missing facilities of existing sports infrastructure and Rs 15,00 million on the construction of South Punjab Secretariat and Government Officer Residence at Bahawalpur and Multan.

The document observed that Punjab faces a critical challenge of unequal development. All socio-economic indicators show south Punjab lagging behind the rest of the province. The sectoral comparisons of investments and outcomes point to a long-standing disparity between the south and the central and north Punjab. “This inequity reduces opportunities for economic growth and results in mass urbanisation as people tend to migrate towards developed regions,” it added.

According to it, after analysing poverty by districts and regions, it is found that over 42 percent of the households are poor in the south, compared to 19 percent for the rest of Punjab. In light of these development disparities, regional equalisation was one of the key priorities of the government.

“Punjab stands to gain significantly by improving inequity. One percent decrease in the inequity ratio will reduce multidimensional poverty by almost 0.4 percent. To this end, the government of Punjab has devised a multipronged strategy to enable regional equalisation.

“Industrial estates have already been established in Vehari, Rahim Yar Khan, and Bahawalpur. The government will enhance its efforts to develop the industrial sector in south Punjab. PIEDMC will be tasked to attain 100 percent colonisation in the next five years by developing technical institutes in the industrial estates and by creating employment opportunities for the locals. Efforts will also be made to attract foreign investment by declaring parts of the industrial estates as Special Economic Zones. The government will also invest in connecting routes to the Lahore-Sukkur motorway under China-Pakistan Economic Corridor (CPEC) to increase regional connectivity,” it added.

Copyright Business Recorder, 2022

PESHAWAR: KP Minister for Finance, Taimoor Saleem Jhagra has censured the federal government for reduction in development funds of erstwhile Federally Administered Tribal Areas (Fata) and said allocation in federal budget for financial year 2022-23 for merged districts was insufficient, even highly difficult to meet the recurring expenditures through allocated amount in newly merged districts.

Speaking at a “post-budget” press conference here at the provincial cabinet room on Tuesday, the minister said the federal government has drastically cut down development expenditures of newly merged districts (NMDs) from Rs 54 billion to Rs 38 billion, which is sheer unjust and highly condemnable.

There was no moral justification with the federal government to cut down the development budget of the ex-Fata region, the minister asserted. He said it is highly unfortunate that the PSDP book was yet not provided to Khyber Pakhtunkhwa.

The minister criticised that measures of the present imported federal coalition government is completely incomprehensible, even, he said, the IMF is also astonished over initiatives of present rulers.

He revealed the incumbent central government had so far obtained a hefty loan of Rs 300 billion, while it is intending to secure further debts of Rs 500 billion.

He claimed the fiscal deficit had been reduced by 70 percent from 77 percent in the previous federal government.

Taimoor Jhagra claimed that provincial public representatives had played a vital role in reduction of development funds of merged districts. He said KP was provided less funds in development and current budget.

The expenditures of newly merged districts have exceeded Rs 59 billion in just eleven months, despite the fact that the federal government had allocated Rs 50 billion for the former Fata region in the fiscal budget, the minister said. He added that the budget allocated for the former Fata region was insufficient even to pay salaries.

Taimoor Jhagra asked the government to allocate Rs 150 billion funds for newly merged districts. Furthermore, he demanded funds for the ex-Fata region should be enhanced in next the National Finance Commission Award. He also asked the federal government to release net hydel profit (NHP) amounts on a monthly basis.

Touching upon the budgetary measures and allocations, Jhagra said the provincial government has made record allocation of Rs 418.2 billion under Annual Development Programme 2022-23, including Rs 319.2 billion for settled areas and Rs 99 billion for newly merged tribal districts.

He said Insaf Education Card programme worth Rs 1 billion would be introduced in the province that could ensure a poor student to study in leading institutions of the province. The KP budget is totally apolitical, the minister said.

Similarly, he informed medical colleges would be established in Dir, Mansehra and Buner under public-private partnership. He said sanction has been given for construction of DI Khan, Dir and Swat Motorway Phase-II.

A hefty amount of Rs 25 billion has been allocated for the next financial year to create job opportunities and overcome unemployment issues in the province, the minister said.

The minister said as many as 481 schemes would be completed in the outgoing fiscal year while 556 schemes would be completed in the upcoming financial year 2022-23.

To a question regarding the province becoming under high debts-trapped, Jhagra said that the loans burden on Khyber Pakhtunkhwa is around four to five percent, saying that loans were obtained on a requirement and needy basis. He said the provincial government has obtained loans for mega development projects.

He claimed the provincial revenue receipts have escalated at Rs 75 billion from previous Rs 30 billion during the last three years.

Replying to another question, the minister said that the provincial government has allocated a hefty amount for local governments in the next fiscal budget. He added that not a single government had spent money at union council level, but the present PTI government has spent funds at grassroots level.

Copyright Business Recorder, 2022

ISLAMABAD: Federal Board of Revenue (FBR) Chairman Asim Ahmad said Tuesday that the FBR is reviewing the tax relief of Rs 47 billion provided to the salaried class through the Finance Bill, 2022, keeping in view the fact that the government will not burden the salaried individuals.

At the conclusion of the Senate Standing Committee on Finance meeting at the Parliament House on Tuesday, the FBR chairman responded to various questions on the personal income tax reforms and relief to the salaried class.

Salaried class tax structure: govt in a fix

The FBR chairman said that we have no problem or issue in the taxation measures of Rs355 billion taken in the budget (2022-23) through the Finance Bill, 2022. However, there is only one issue of personal income tax where the government is committed not to burden the salaried class in the next fiscal year. There is a disagreement between the IMF and the government on the personal income tax rates.

Major relief has been provided for salaried individuals having a revenue impact of Rs47 billion. The limit for taxation of salary is enhanced to Rs1,200,000 from the current limit of Rs600,000 and the slabs have been reduced from 12 to seven. The maximum rate has been reduced from 35 per cent to 32.5 per cent. The relief has also been provided to business individuals and AOPs. The limit for taxation is enhanced to Rs600,000 from the current limit of Rs400,000.

When asked about the objections raised by the International Monetary Fund (IMF) on exemptions given in the budget (2022-23), the FBR chairman said that every proposed exemption has been reviewed by the IMF and the government has to give justification for each exemption. However, they agree to allow exemption in genuine cases. For example, sales tax exemption has been restored on imports by the UN diplomats/diplomatic missions and privileged persons. They have no objection on granting this exemption which was inadvertently withdrawn.

He said that at present, most of the people fall within the category of salary earning upto Rs0.2 million per month. The maximum salaried individuals fall within the slabs of monthly salary upto Rs0.2 million per month. If we calculate the revenue impact of higher-income earners covered under the upper-income tax slabs, the number of taxpayers in high slabs is so less that the doubling of the tax rates would not have the impact of the required amount needed from the salaried class. The base of the higher slabs is so narrow that it would not generate additional revenue even after a substantial increase in tax rates for the higher-income earners (above Rs0.2 million per month).

“We cannot impose ridiculously high tax rates like 75 percent instead of 35 percent on high-income earners, which are very few on the top. On the other hand, the base of the lower-income earner is very wide, having an impact on revenue,” Asim said.

Now, we are in a fix that the government does not want to burden the lower-income earners.

However, if we do not increase the taxes on the low-income earners our revenue impact would not go into positive i.e. from existing tax relief of Rs47 billion to revenue generation from the salaried class.

However, the government has to give tax relief to the lower-salaried class as the cost of living is so high including inflation. We have to give relief to the lower-salaried employees at any cost. Therefore, we are reviewing different slabs of the salaried class keeping in view the fact to ensure relief to the salaried individuals, Asim added.

Copyright Business Recorder, 2022

LAHORE: As a result of the deadlock between the opposition and treasury benches on the issue of the presence of the Punjab Chief Secretary and Inspector General of Punjab Police in the House, Governor Punjab Muhammad Baligh-ur-Rehman suspends the 40th session of the Punjab Assembly and convened the 41st session of the Punjab Assembly on Wednesday 3 pm at Aiwan e Iqbal.

The deadlock between the Punjab government led by Chief Minister Hamza Shehbaz and the Pakistan Tehreek-e-Insaf (PTI) supported by Punjab Assembly Speaker Pervaiz Elahi entered its second day on Tuesday after both sides failed to reach an agreement.

Earlier, the session of Punjab Assembly started after eight hours under the chairmanship of Speaker Chaudhry Pervaiz Elahi. After recitation of Holy Quran and Naat Sharif, Speaker Chaudhry Pervaiz Elahi invited Sardar Awais Leghari, Provincial Minister for Finance to present the budget.

Sardar Awais Laghari said that Governor Punjab has called off the session, therefore the proceedings of this session will be illegal and unconstitutional.

On this, Chaudhry Pervaiz Elahi said that the orders of the Governor have no constitutional status.

Later, the Speaker adjourned the sitting till June 15, 2022 at 1 pm.

A day earlier, the session was supposed to take up the budget for the next fiscal year, but was adjourned after PML-N did not agree to the demand made by the speaker and PTI for the presence of the Punjab Police chief and chief secretary in the house.

The PTI had wanted the IG and the secretary to explain the treatment meted out to PTI workers on May 25 during the long march towards Islamabad. PTI’s Dr Yasmin Rashid had said that her main concerns were about the chief secretary and the IGP. “We will not let the house run until they are called here,” she had said during the budget session.

Speaking to the media on the assembly premises, the chief minister Hamza Shahbaz said the government would present the budget come what may as he called out the speaker and PTI for allegedly disrupting the house proceedings for three months now. The CM said the government wanted to provide relief to 120 million people but the opposition wanted the IG and the chief secretary instead of the budget. CM restated that the government should be allowed to present the budget. They, rather, are demanding that IG police should be subpoenaed. I am sitting here and would wait today again; he added and commented that they are engaged in political manoeuvring. Havoc has been played with the constitution of the largest province of the country, remarked Hamza.

To another question, the CM lamented that the assembly session was summoned and then prorogued. It seems that it is some sort of monarchy, he argued and remarked that the Speaker Punjab assembly was acting like a monarch. Our ministers are making constant demands for the assembly session while they are preoccupied with the memory of the chief secretary and IG police, he said.

Hamza Shahbaz regretted that the media had been restricted in the Punjab assembly and contested who sent goons inside when the deputy speaker chaired the proceeding. It is not a matter of my personality or any sort of ego satisfaction; he added and regretted that the ego of a speaker and one sitting in the Bani Gala has no limits.

Senior Minister Punjab and parliamentary leader Pakistan Peoples Party Syed Hassan Murtaza said that speaker is bound to hold a budget session in accordance with the Constitution.

While responding, to the questions of the media outside the Punjab Assembly Hassan Murtaza said it was the opposition who created deadlock on the presentation of the budget in the House. The government allowed the opposition to speak at the request of the speaker.

“We are political people, the government does not want a deadlock, “ said Murtaza . We ask the opposition to sit with the government. We will talk to the opposition within the constitutional and legal limits. He also said government is moving forward with a prudent mindset.

He further said opposition is creating hurdles not in the way of government by stopping the presentation of the budget but in the way of millions of people of Punjab who will be deprived of provision of basic facilities like health, education and sanitation. He further said that people will be deprived of salaries if the budget is not presented.

The Punjab Assembly Secretariat stopped the journalists from entering the House. The journalists protested outside the Punjab Assembly against the assembly secretariat. The security of the Punjab Assembly also stopped the security of CM at the gate. PPP leader Ali Haider Gilani said that We will not join advisory committee unless journalists are allowed to enter assembly: PPP leader Ali Haider Gilani.

Meanwhile, according to the spokesperson of the Punjab Assembly there is no restriction on the coverage of journalists in the Punjab Assembly. Journalists are still covering the media camp in the Punjab Assembly.

Provincial Minister Sardar Awais Laghari said that Chief Secretary and IG will not come to the House. He said speaker Punjab Assembly Pervez Elahi wants to settle his personal score with IG and Chief Secretary. He questioned what has the IG and Chief Secretary got to do with the budget.

Law Minister Malik Ahmed Khan while talking to the media said that speaker is the custodian of the House. He should be impartial.

Copyright Business Recorder, 2022

ISLAMABAD: The Chairman, Federal Board of Revenue/Secretary Revenue Division has constituted two Anomaly Committees in order to identify and remove the technical, legal, and business-related anomalies in the Finance Bill, 2022. In this regard, the FBR has issued two notifications on Tuesday.

The anomaly committee (business) shall comprise of the following members: Chairman of the committee would be Zubair Motiwala; Co-Chairperson Suraiya Ahmed Butt and Member (Customs-Policy), FBR and Afaque Ahmad Qureshi, Member (IR -Policy), FBR.

Members of the committee are Irfan lqbal Sheikh, president, FPCCI; Mian Nauman Kabir, president, LCCI; Hasnain Khurshid Ahmad, president, Sarhad Chamber; Fida Hussain Dashti, president, Quetta Chamber; Muhammad Shakeel Munir, president, Islamabad Chamber of Commerce; Ehsan A Malik, CEO, Pakistan Business Council; Syed Anis Ahmed, president, American Business Council; Abdul Rahim Nasir, chairman APTMA; Khuram Mukhtar, patron-in-chief PETA; and Abdul Aleem, secretary-general OICCI.

The Terms of Reference (TOR) of the committee is to review the business-related anomalies identified and submitted and to advise the FBR on the removal of anomalies.

The Committee may co-opt member(s) with consensus, if required. Anomalies can be submitted on or before the close of office hours on June 20, 2022, to the Co-Chairperson, Anomaly Committee; in their offices at Room No 348 (Customs) and Room No 355 (IR), 31dFloor, FBR House, Islamabad. The Committee can also be reached at the following e-mails: [email protected] (IR related) [email protected] (Customs related).

Through another notification, the Anomaly Committee (Technical) would be headed by Ashfaq Tola, FCA FCMA. The Co-Chairperson of the committee are Suraiya Ahmed Butt, Member (Customs-Policy) and Afaque Ahmad Qureshi, Member (IR -Policy), FBR.

Committee Members included Asif Haroon, AF Fergusons & Co, Karachi; Abdul Qadir Memon, Patron Pakistan Tax Bar, Karachi; Muhammad Aurangzeb, Chairman, Pakistan Business Council, Karachi; Sadia Nazeer, FCA, Partner KPMG, Islamabad; Habib Fakhruddin CA, Rawalpindi; Saifullah, Partner Rafaqat Babar & Co Nice; President ICAP, Peshawar and Kemal Hassan Siddiqui, Balochistan Tax Bar, Quetta.

Terms of Reference (TOR) of the committee is to review the anomalies identified and submit; and to advise the FBR on the removal of anomalies submitted on or before the close of office hours on June 20, 2022 to the Co-Chairperson, Anomaly.

The committee may co-opt member(s) with consensus if required. Anomalies can be Committee; in their offices at Room No.348 (Customs) and Room No.355 (IR), 3rdFloor, FBR House, Islamabad.

The Committee can also be reached at the following e-mails: [email protected] (IR related) [email protected] (Customs related).

Copyright Business Recorder, 2022

LAHORE: While deadlock persists between the treasury and opposition benches over presentation of Punjab budget 2022-23, Punjab Chief Minister Hamza Shehbaz held the former Prime Minister and PTI Chairman Imran Khan as well as Punjab Assembly Speaker Chaudhry Pervaiz Elahi responsible for the deadlock, blaming the latter of violating the Constitution.

“We will utilize all legal options to secure our rights,” Hamza said while briefly talking to media on Tuesday.

Hamza maintained that Pervaiz Elahi cannot interfere in his mission of public service and announced that free medicines would be provided in BHUs and THQs hospitals from the 1st of July. Similarly, cancer-related medicines would also be provided free of cost, he added.

The CM stated that the government should be allowed to present the budget. “They (opposition), rather, are demanding that IG police should be subpoenaed. I am sitting here and would wait today again,” he added and commented that they are engaged in political maneuverings.

Answering a question, the CM lamented that the assembly session was summoned and then prorogued. It seems that it is some sort of monarchy, he said and remarked that the Speaker Punjab Assembly was acting like a monarch.

Hamza Shehbaz regretted that the media had been restricted in the Punjab Assembly and wondered who sent goons inside when the deputy speaker chaired the proceedings.

The session of Punjab Assembly called at 1:00 pm Tuesday for the presentation of the budget was delayed till filing of this report due to the obduracy of Speaker Pervaiz Elahi who wants both IG police and chief secretary to come to the Punjab Assembly and tender an apology for registering cases against the PTI and PML-Q activists and leaders, besides wanting from the administrative officers to quash cases against them. But the Punjab government has also become adamant and decided not to give in to the speaker’s demands.

Sources said the CM held a meeting wherein it was decided that neither the IG police nor the chief secretary would go to Punjab Assembly to tender their apology. Rather, the government would consult legal and constitutional experts to find a solution to this problem.

On the other hand, opposition leader in the Punjab Assembly Sibtain Khan wondered as how on earth Tarar could sit in the assembly when he was not an MPA. “The provincial government is to blame for the adjournment of session because it did not summon the officials to the House,” he added.

PTI’s MPA Mian Aslam Iqbal vowed that the opposition would not allow proceedings of the House to continue until the IGP and the chief secretary come to the assembly to offer an apology.

Copyright Business Recorder, 2022

EDITORIAL: The Khyber Pakhtunkhwa (KPK) budget 2022-23 was expected to emphasise the signature programmes launched by the then Prime Minister, Imran Khan, particularly the Sehat Sahulat Card (budgeted to receive 205.7 billion rupees next year against 142 billion rupees in the outgoing year — a rise of 45 percent reflecting the rising use of the card) and Ehsaas programme which never attained the level of a full-fledged programme on paper in the federal budget (its allocation remained subsumed in the Benazir Income Support Programme); however, the provincial budget unexpectedly devoted an entire section to the economic achievements of the federal government during the past three years and a quarter in the document titled Khuddaar KPK: A Citizen’s Guide Part 1.

While this simply reinforces Pakistan Tehreek-e-Insaf’s use of the province to spearhead its national political agenda yet what is significant is that the total outlay for 2022-23 is 1,332 billion rupees against 1,118.3 billion rupees in the outgoing year — a 19 percent rise against the federal budget’s envisaged rise of 10.4 percent, clearly indicating that savings is even less of a priority than in the federal government — a key requirement to contain inflation.

The largest budgeted increase is in salaries, 19 percent — from 374 billion rupees last year to 447.9 billion rupees this year — a raise higher than that proposed in the federal budget; however, sadly, the objective is undoubtedly the same: to gain support of the civilian administration through raising salaries with little if any concern over the impact of such a raise at this time on the Sensitive Price Index which is currently hovering at over 21 percent.

The federal budget has yet to be passed by parliament and amendments are expected though the opposition is expected to be muted with PTI non-attendance following its resignations. Be that as it may, it is fairly evident that the federal government will face an uphill task to ensure that its tax proposals are supported by the International Monetary Fund (IMF), with Finance Minister Miftah Ismail already acknowledging that there are a few thorny issues pertaining to the taxation proposals, particularly those taxes that contribute to the divisible pool that, in turn, are distributed between the federation and the provinces as per the National Finance Commission award.

Additionally, collections of over 600 billion rupees, more than 60 percent envisaged increase in FBR revenue collections for next fiscal year, are projected on the basis of 5 percent growth that is simply unrealistic especially if the Fund’s seventh review is to be successful with Ismail repeatedly stating that the IMF lending is critical to averting default. Whatever amount is collected by the federal government will, therefore, impact on provincial resources as the lion’s share of revenue of all provinces is from their share of the divisible pool.

KPK has budgeted its share from the divisible pool at 570.9 billion rupees for next year based on the federal government’s optimistic estimates of 3.974 trillion rupees, with one percent of the divisible pool for war on terror (budgeted at 68.6 billion rupees), and net hydel profit with arrears that remained pending even during the Khan administration due to lack of fiscal space amounting to 61.6 billion rupees. KPK’s own resources and non-tax revenue are budgeted at a mere 85 billion rupees for next year. Thus the claim of the KPK government that it will be a balanced budget will depend on the collections under the divisible pool but more importantly indicates its intent not to contribute to the federal government’s budgeted whopping 800 billion rupees provincial surplus.

In descending order of allocations for next year, the largest recipient would be elementary and secondary education at 227 billion rupees, followed by health at 205 billion rupees, with the third highest recipient being home department at 104 billion rupees. Agriculture is ninth in priority in terms of allocation at 29.4 billion rupees though it is more than double the budgeted amount of 13.2 billion rupees in the current year with energy and power next in line at 29.3 billion rupees.

The KPK government envisages allocation of 319.2 billion rupees for development of settled districts and 99 billion rupees for merged districts while current expenditure is projected at 789 billion rupees for settled and 124 billion rupees for merged districts for next year. In percentage terms current expenditure will account for 68 percent of total outlay while development expenditure would account for 31 percent. This compares extremely favourably with 91 percent for federal current expenditure; however, a more meaningful comparison would be with other provincial budgets rather than the federal budget which earmarks the bulk of its expenditure for interest payments and defence.

Copyright Business Recorder, 2022