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Finance Minister chaired the meeting of Monetary and Fiscal Policies Coordination Board

Monetary and Fiscal Policies Coordination Board met here Friday to review the current state of Pakistan’s economy. Finance Minister Asad Umar chaired the meeting.

The following areas were reviewed:(i) the fiscal policy;(ii) the external sector and (iii) the recent steps in monetary policy.

While reviewing fiscal policy, the Board noted that fiscal deficit for the first quarter of FY19 turned out to be 1.4 percent of GDP. The Board appreciated the authorities adjustment plan for fiscal consolidation. The impact of fiscal consolidation measures implemented in the recent months would be visible from the second quarter of the current financial year. This consolidation is an important element of the homegrown adjustment plan and will play an integral part for ensuring economic stability. The need for continued effort to ensure revenue generation and expenditure controls was emphasized in the meeting. As far as the financing of the fiscal deficit is concerned, the Board discussed the inflationary and monetary impact of reliance on SBP financing during the current financial year.  The fiscal authorities explained that the financing mix is expected to record a substantial improvement as most of the external financing would be realized from January, 2019 onwards, which will result in lesser reliance on banking sector borrowing.

Turning to the external sector the Coordination Board was apprised that current account is visibly responding to the measures taken since Jan 2018.  In the first four months, of current financial year, non-oil imports witnessed a decline of 4% compared to high growth of 25% over the same period last year.  Remittances have recorded a substantial growth in FY19, while exports have shown growth of 4%. On the exchange rate front, the Board discussed the recent volatility in the PKR parity. The Board is of the view that the present developments are mainly explained by market demand-supply gap of dollar liquidity on the one hand and more underlying structural impediments on the other. In principal the parity should be at their competitive-enhancing levels. Accordingly, after the latest adjustments, it is now more reflective of economy’s medium-term needs and market conditions. The Board also anticipates that the short-term conditions on the exchange rate front are likely to normalize. Particularly, availability of deferred oil facilities and the recent decline in the international oil prices is expected to reduce pressures in the Pakistan foreign exchange market in the near-term. Moreover, the bilateral flows would close the financing gap for FY19. These positive developments will build FX reserves in the coming months.

On recent changes in monetary policy, the Board was of the view that the stance is appropriate at current levels given the projections for inflation in FY19 and FY20. The real interest rates are significantly positive and would help manage aggregate demand and reduce output gap closer to sustainable levels. Going forward, the Board expects that the Monetary Policy Committee would continue to make data-driven decisions based on macroeconomic fundamentals.

Public Expenditure and Financial Accountability (PEFA) launching ceremony held

Public Expenditure and Financial Accountability (PEFA) launching ceremony was held here. PEFA, it may be added is a tool for assessing the status of public financial management. 

Mr. Kamran Ali Afzal, Additional Secretary, External Finance on the occasion warmly welcomed the World Bank (WB) and DFID team who graced the occasion. He said that Government recognizes the importance of sound financial management including budgets and expenditure and enjoys an enhanced level of responsibility for accountability. Therefore, PEFA assessment is very much in line with the reform agenda of government, and that the findings and recommendations coming out PEFA assessment will be received well. Ministry of Finance will consider recommendations for improvement of public financial management. Other Government functionaries that are assessed by PEFA will also be pleased being assessed by professionals on a worldwide accepted framework. Mr Afzal added that Mr. Javed Iqbal Khan, Joint Secretary Budget Implementation has been nominated as Lead Focal Person by Finance Ministry for coordination.

Mr. Shabih Ali Mohib, Program Leader World Bank, reciprocated the welcoming gesture which was followed by a detailed presentation by Mr. John Ogallo, senior financial management specialist. Mr. Ogallo provided an overview of the PEFA methodology and identified the period, Fiscal Years 2015/16 – 2017/18, which the report will cover. The PEFA is being led by the World Bank with support from the EU and DFID.  This will be the first PEFA conducted at the Federal level and in the Provinces of Punjab and Sindh since 2012 the report is scheduled to be completed during 2019. The assessment identifies strengths and weaknesses within PFM systems allowing for reform efforts to be better targeted.

Finance Minister chaired the meetings with SECP and SBP

Finance Minister Asad Umar here on Wednesday chaired focused meetings with SECP and SBP to review progress made by the regulators on FATF Action Plan.
 
The meeting was attended by Executive Directors from SBP and SECP, DG-FMU, Legal Adviser-FMU and other senior officials.

During the meeting, SBP and SECP gave a detailed presentation on the progress on actions taken by them towards implementation of FATF Action Plan. The Finance Minister desired ensure that the internal action plans with specific timelines on implementation of FATF Action Plan should be put in place immediately and shared with FMU so that all FATF Action Plan items are completed within the agreed time lines. 

The Finance Minister also asked them to not only complete actions due in January 2019 but also focus on actions due in May and September 2019 as they would be required to update FATF on work being done to meet those timelines.

Finance Minister chaired the meeting of Economic Coordination Committee of the Cabinet (ECC)

The meeting of the Economic Coordination Committee of the Cabinet was held here Tuesday. Finance Minister Asad Umar chaired the meeting. 

On a proposal of Ministry of Commerce, relating to export of sugar, the ECC approved waiving off of the condition related to start of crushing on 15th of November. The Committee observed that the matter relating to freight support etc for exports fall in the domain of the respective provincial governments. With regard to the outstanding claims for the previous years, the committee directed Finance Division to release the budgeted amounts.  

ECC allowed allocation of up to 30 MMCFD gas from Zafir field, distt Sanghar, to M/s Sui Southern Gas Company Ltd (SSGCL).

ECC also considered proposal from Ministry of Energy (Petroleum Division) for allocation of 66 MMCFD Mari Deep Gas to MPCL and approved the same. The Committee sought further proposals on the utilization of the gas for power generation or production of fertilizer.  
               
ECC recommended to the Cabinet a case for supplementary grant of Rs. 1.80 billion for agriculture tube well subsidy as proposed by Ministry of Energy (Power Division).

The ECC discussed a report submitted by Ministry of Industries & Production on measures to ensure availability of Urea fertilizer in the country and the possible impact on the price of urea owing to use of RLNG due to shortage of system gas in winter.

The Committee in the end expressed its deep appreciation for the Power Division for having initiated a  successful drive for reduction of losses  and improvement of recoveries.

KCCI delegation met with Finance Minister

Finance Minister, Asad Umar had a meeting with the delegation of Karachi Chamber of Commerce and Industries (KCCI) here on Tuesday. Federal Minister for Petroleum, Ghulam Sarwar Khan and Minister of state for Revenue, Hammad Azhar were also present on the occasion.

The delegation shared with the Minister their concern that supply of gas to different industries in the metropolis might suffer interruption as they had been served notices regarding gas load management for next three months. They also had discussion with the Finance Minister on their tax related issues.
Minister for Petroleum assured that the delegation’s concern on disruption of gas will be duly addressed. 

Petroleum Prices for the month of December 2018

The government has decided to reduce the prices of petroleum products by Rs.2 per litre, each for Petrol and Diesel. The prices of Kerosene and LDO will be reduced by Rs. 3 & Rs.5 per litre respectively. Prices for the month of December shall therefore be as under:

These prices shall be applicable from 1st of December 2018 to 31st December 2018.

It may be added that OGRA works out the petroleum prices for a month on the basis of the prices of cargoes purchased for that particular month. The prices for December 2018 are accordingly based on the purchases made during the period from 10 October to 12 November, 2018. The average price of these cargoes remained $76.68/BBL for Petrol and $86.61 for HSD.
 
The government has substantially reduced the taxes/levies on petroleum products during the period September- November, 2018. During the month of November sales tax on MS Petrol and HS Diesel was 4.5% and 12% respectively, compared to 15% and 27.5% in May 2018, which means a reduction of 10.5% and 15.5% respectively. Similarly petroleum levy on MS Petrol and HS Diesel which was Rs.10 and Rs.8 per liter in May has been reduced to Rs.6.15 and Rs.6.51 respectively.  

Finance Minister chaired the meeting of Economic Coordination Committee of the Cabinet (ECC)

Finance Minister Asad Umar chaired meeting of the Economic Coordination Committee of the Cabinet (ECC) here Friday.

ECC approved the proposal of Ministry of National Food Security and Research for provision of 40,000 metric tons of wheat to Afghanistan as a gift. 

ECC also considered and approved a proposal from the Finance Division for provision of funds amounting to US$ 82.6 million as grant to Pakistan Poverty Alleviation Fund (PPA) for disbursement to 320,000 BISP beneficiaries, helping them graduate out of poverty. It may be added that Pakistan Poverty Alleviation Fund (PPAF) had devised the “National Poverty Graduation Programme” (NPGP). The International Fund for Agricultural Development (IFAD) agreed to provide a loan amounting to US $82.6 million to Government of Pakistan for NPGP on concessional rates.  A Project Financing Agreement with IFAD in this regard was also signed. As per agreement, Government shall make the loan proceeds available as grant of PPAF for poverty graduation of BISP beneficiaries.

Finance Minister chaired the meeting of Monetary & Fiscal Policies Co-ordination Board

Finance Minister Asad Umar has said the Government is committed to improving the fundamentals of economy and achieving sustainable and balanced economic growth.

The Minister stated this while chairing meeting of the Monetary and Fiscal Policies Co-ordination Board here on Thursday.

Secretary Finance gave a detailed presentation to the meeting on the economic and fiscal situation. The meeting was informed that external balance has improved in the first four months of current fiscal year as current account contracted by 4.6 percent due to significant increase in worker’s remittances, containment in imports and increase in export growth. Fiscal consolidation remained a challenge during the first quarter as fiscal deficit increased to 1.4 percent as compared to 1.2 percent of the comparable period last year. FBR revenue continued to increase by 6.4 percent and if gains traction it may bridge up the fiscal deficit going forward. Headline inflation is increasing on the back of non food inflation above 8 percent, whereas, food inflation is rising moderately by 2.7 percent on account of smooth supply of commodities in the market and better price monitoring system.

The Secretary also briefed the meeting about the economic reforms which the Economic Advisory Council has approved. The meeting also discussed the export credit facility offered by Saudi Arabia envisaging the purchase of crude oil and or other petroleum product (s) of up to USD 3.24 billion per annum on a 12 month deferred payment basis.

Governor State Bank discussed monetary aggregates along with views on the economy. Broad money (M2) witnessed a rise of Rs.35 billion from July 2018 to 16th November 2018 as compared to decrease of Rs.67 billion in the same period last year which is entirely contributed by Net Domestic Assets (NDA) of the banking system as Net Foreign Assets (NFA) continued to contract. Despite rising interest rate overall private sector credit remained higher than last year. The government borrowed Rs.2,859 billion from SBP but on the other hand retired Rs.2,619 billion to scheduled banks. While, net government borrowing from the banking system reached Rs.186.5 billion compared to Rs.383.5 billion over the previous year. The private sector credit increased to Rs.304 billion during the period as compared to Rs.69 billion last year. Expansion is seen largely in working capital followed by fixed investments.

Giving his concluding remarks, Finance Minister said that the decline in LSM sector needed to be studied by disaggregating the data so that appropriate measures could be taken to address the same. He also directed Finance Division to earnestly complete integrated policy paper focusing on economic strategy over the medium term.

Finance Minister chaired the meeting of Economic Coordination Committee of the Cabinet (ECC)

Finance Minister Asad Umar chaired meeting of Economic Coordination Committee of the Cabinet (ECC) here on Tuesday.

ECC was given a presentation by Secretary Petroleum Division on Winter Gas Load Management Plan. ECC decided that there will be no gas load shedding this winter. ECC allowed SNGPL to utilize RLNG in the system for consumption by domestic and commercial consumers, to manage the load. The gas utilities will be allowed volumetric adjustment and financial impact on cost neutral basis in accordance with the ECC’s decision of 11th May 2018. The ECC also decided that the recent increase in gas prices will not be applicable for Roti Tandoors, and they will continue to pay their gas bills on the previously applicable rates. The decision has been taken in view of the concerns that the increase in gas prices was leading to increase in the prices of tandoori roti and naan. 

ECC also approved government guarantee to National Power Parks Management Company (Pvt) Ltd (NPPMCL) to raise loan of Rs. 38.00 billion from financial institutions to meet remaining cost of its two power plants.

Finance Minister chaired the meeting of Economic Coordination Committee of the Cabinet (ECC)

The meeting of the Economic Coordination Committee of the Cabinet (ECC) was held here Thursday. Finance Minister Asad Umar chaired the meeting.

ECC in consideration of the proposal from Ministry of Industries and Production approved a grant of Rs. 1,066.078 million for payment of outstanding dues (provident fund, gratuity and payroll dues) to families of deceased employees of Pakistan Steel Mills.

ECC discussed the proposal submitted by Ministry of Commerce & Textile to allow import of cotton from Afghanistan/Central Asian states via the land route through the Torkham Border. The Committee accorded approval for the import with the condition that all sanitary and phytosanitary regulations shall be abided. ECC also directed the relevant ministries to engage with the industry for establishment of a permanent quarantine facility for cotton imported through land route. 

Secretary Ministry of National Food Security shared with the meeting a report on value chain of sugar. The ECC took note of the issue of pending payments to sugarcane growers as well as difficulties faced by the millers in view of surplus stocks, possibility of their export and redressal of liquidity issues. The Committee directed Minister of National Food Security and Adviser Industries to hold meeting with the Pakistan Sugar Mills Association (PSMA), and resolve these issues.

ECC accorded approval for sale of 200,000 tons of wheat from the surplus stocks available with PASSCO to Poultry Association of Pakistan (PPA).

ECC also had deliberations on the proposed plan of Ministry of Energy for gas load management during winter season and decided to have further discussions in the matter at the next meeting to finalize the plan.

Finance Minister chaired the concluding session with IMF Mission

An IMF mission, led by Mr. Harald Finger, visited Pakistan from 7thto 20th November 2018.

During this period, extensive talks were held between key ministries of the Government of Pakistan, including the Ministries of Finance, Planning, Development & Reform, and Energy, the State Bank of Pakistan, and the IMF Mission. These discussions covered all sectors of the economy. Members of Parliament and provincial finance ministries also exchanged views with the Mission.

The Federal Minister for Finance, Mr. Asad Umar, chaired the concluding session with Mission today.
Substantive progress has been made by the Government of Pakistan and the IMF Mission towards developing a common understanding on the policy and structural reforms framework for the prospective IMF programme, including fiscal and monetary measures, corrective interventions for balance of payments sustainability, pro-poor spending, governance and development of a business-friendly environment.

The positive engagement with the IMF will continue over the coming weeks to finalise the programme with the Fund.

Finance Minister chaired a meeting of Economic Coordination Committee (ECC)

The meeting of Economic Coordination Committee of the Cabinet (ECC) was held here on Tuesday. Finance Minister Asad Umar Chaired the meeting.

ECC discussed the proposal submitted by the Ministry of National Food Security & Research regarding export of surplus wheat/products as requested by   Provincial Governments of Punjab and Sindh and PASSCO.

The Committee granted approval for export of 0.5 million tons of wheat by PASSCO and both provincial governments. It was decided that any financial support for freight etc. requested for the purpose will be provided by the respective provincial governments. Federal Government will pick up such costs in the case of PASSCO only.

Further, a committee comprising senior officials from Commerce, Finance and Food Security will review the situation in two week’s time and make recommendation for further exports, if required.

Finance Minister urged EAC sub-groups to expedite recommendations

Finance Minister, Mr. Asad Umar, chaired a meeting on Economic Advisory Council’s (EAC) Sub-Groups on “National Financial Inclusion Strategy (NFIS)” and “Fiscal Sector” here at the Ministry of Finance. Meeting was attended by all major stakeholders/ members of the sub-group from Ministry of Finance, State Bank of Pakistan, Federal Board of Revenue and Security and Exchange Commission of Pakistan.

Governor State Bank of Pakistan, Mr. Tariq Bajwa, presented National Financial Inclusion Strategy to improve quality and increase access to financial services in Pakistan. He outlined targets and necessitating policy actions to be taken at various levels in coming years to achieve the targets. Discussion revolved around fast-tracking the digitization of financial services to reach out larger number of consumers, small and medium business and newly emerging entrepreneurs throughout country. Finance Minister appreciated the Financial Inclusion Strategy and emphasized on diligently time-lining the goals, targets and actions to be taken, and cautioned against delaying the implementation process of the strategy.

Finance Minister met with the delegation of Pakistan Britain, Scotland Business Councils

Finance Minister, Asad Umar received a delegation of Pakistan Britain Business Council (PBBC) and its sister organization, Pakistan Scotland Business Council (PSBC) led by Mr. Julian Hamilton Barns and Mr. Rashid Iqbal here Friday.

The delegation briefed the Minister about the Councils’ plans for investment and financing different projects in Pakistan including health, financial sector and other areas. The delegation especially shared with the Minister the proposal regarding establishment of a network of hospitals across Pakistan aimed at providing quality healthcare to the people. The Council could muster financial support from Pakistani diaspora, international financiers, philanthropists and other financing institutions towards this end, the delegation said. The delegation also apprised the Minister about the Councils' interaction with the Pakistan diaspora in UK and in other countries and said they were especially keen to invest in Pakistan.

Finance Minister welcomed the initiative by the Councils and assured of all possible support from the government. He asked the delegation for a formal proposal in this regard which could serve as the basis for developing future cooperation. He said the present government highly appreciated such initiatives and had a resolve to facilitate international investors in every possible manner.

Meanwhile the Finance Minister also met a delegation of the FPCCI, KP led by Mr. Ghazanfar Bilour.

Finance Minister chaired a meeting of Executive Committee of the National Economic Council (ECNEC)

Finance Minister Asad Umar chaired meeting of the Executive Committee of the National Economic Council (ECNEC) here on Wednesday.

The meeting approved development projects in various areas of the country.

ECNEC discussed and accorded approval of the project for evacuation of power from hydro power projects of Suki Kinari, distt Mansehra in KP, Kohala distt. Muzaffarabad and Mahal, distt. Bagh in AJK at a cost of Rs.79,929.73 million. The main objective of the project is construction of 500 kV transmission network to provide interconnection facilities for evacuation of electricity from the above mentioned projects being constructed under CPEC. 

ECNEC discussed and approved Sind Solar Energy Project (SSEP) at a cost of Rs. 12,848.11 million. The project aims to support the scale up of solar power in Sindh province and increase access to electricity. The project will also improve energy security and fulfill Pakistan’s international commitments on climate change.

ECNEC also directed the Power Division to come up with a report covering all facets relating to power production, its effective evacuation/transmission and distribution. The report ECNEC observed would help set a direction for undertaking power projects in future.

The meeting approved rehabilitation project of Dargai hydroelectric power station, Malakand, KP at a cost Rs. 4,050.364 million. Completion of the project will help enhance the capacity of the power station to 22 MW.

The meeting considered proposal from the Ministry of Water Resources to include Tangir Hydropower in the Diamer Basha Dam project and approved the revised cost of the project at Rs. 479.686 billion.

The meeting discussed and approved Baluchistan Water Resource Development Project (Zhob and Mula river basins) at a cost of Rs. 16,453.40 million. The project will benefit districts of Muslim Bagh, Qila Saifullah, Zhob, Khuzdar, Jhal Magsi and part of Kalat in the Baluchistan province.

Finance Minister held a meeting with the visiting IMF mission

The Finance Minister Asad Umar held a meeting with the visiting IMF mission led by Mr. Harald Finger here Tuesday. 

The Mission leader shared his initial assessment with the Finance Minister on various sectors of the economy, following the delegation's interaction with officials of relevant ministries and entities.
 
The Finance Minister shared with the delegation, PTI government’s vision on economy. He referred to the corrective measures being taken to remove imbalances in the economy and said that the new government had come to power with an agenda of wide ranging reforms. He said that the Government has a strong resolve for implementing deep structural and institutional reforms. It is committed to safeguarding the poor and vulnerable segments of the society and shall  invest more in social protection, human development and creating employment opportunities, The Minister added. Along-with structural and governance reforms, revival of domestic industry and export sector are high priorities of the Government. He said Pakistan looked forward to receiving IMF support for government’s efforts aimed at achieving an economic turnaround.

The Mission will continue its discussions with the relevant authorities during the next several days.

Finance Minister chaired a meeting of ECC

Finance Minister Asad Umar chaired meeting of the Economic Coordination Committee of the Cabinet here Monday.

 The Secretary Petroleum Division briefed the ECC about the gas supply situation on SSGCL network. The ECC was informed that the supply of gas to zero rated industry (process + captive)under SSGCL system, covering Sindh and Baluchistan provinces would continue during the winter season, in accordance with recently approved gas supply priority for this sector. The ECC directed the SSGCL management to withdraw the gas load management notices issued to these industries. Likewise there would be no gas load management for domestic consumers.      

On another proposal of the Ministry of Energy (Petroleum Division), the ECC approved provision of 12 MMCFD gas to SNGPL from Dhok Hussain gas field and also accorded approval for provision of 10 MMCFD gas to SSGCL from Bitrism gas field. 

The ECC considered and approved the proposal of the Ministry of Energy (Power Division), for raising fresh financing of Rs. 35.806 billion through a syndicate of banks for PHPL. 

Chairman PIAC briefed the meeting about current operational and financial position of the organisation. The ECC directed the management to improve the business model of the company and to devise a strategic plan for solution to its financial and administrative problems on long term basis. The Committee approved the proposal for issuance of government guarantees of raising Rs. 17.022 billion for the immediate requirements of PIAC. 

Finance Minister chaired a meeting of ECC

Finance Minister Asad Umar chaired meeting of the Economic Coordination Committee of the Cabinet (ECC) here Wednesday.

The ECC considered the proposals of Ministry of National Food Security & Research regarding the support /procurement price of wheat for the crop 2018-19 and decided to maintain the wheat support price at the current level of Rs.1300/- per 40 KG. It was noted that the wheat prices in the international market were considerably lower and the government of Pakistan was incurring a huge expenditure in the wheat procurement process, to protect the interests of the farmers.   

The ECC approved the proposal of the Privatization Division for disbursement of Rs. 367 million as one month’s salary (September 2018) to the employees of Pakistan Steel Mills (PSM). The ECC also directed the Ministry of Industries to take immediate action for disbursement of outstanding dues to widows of PSM's deceased employees which have been pending for the last almost four years.  ECC also directed that since PSM had been excluded from the privatization list, the Ministry of Industries and Production should on priority, submit a detailed proposal to the ECC for PSM's operationalization. 

On another proposal from the Ministry of National Food Security, the ECC allowed import of 50,000 tons of urea fertilizer to meet requirements of farmers in Rabi season 2018-19. The Committee also authrorized the Advisor to the Prime Minister on Commerce & Industries to allow import of an additional quantity of 50,000 tons, if required. Further, the ECC also directed that fertilizer plants may be kept fully operational for whole of Rabi season for adequate production of urea and prevent its shortage. The ECC maintained that no undue increase in prices of urea will be tolerated on the pretext of increase in gas prices.

ECC also approved proposal of the Ministry of Food Security, for enhancing Pakistan’s share of wheat for the SAARC Food Bank Reserve from 40,000 tons to 80,000 tons, adjusting it in the existing quantum of one million metric tons of national strategic reserves assigned to PASSCO. 
         
 The Chairman FBR briefed the meeting on  tax collection from the sugar industry. He suggested that a revised mechanism be put in place to ensure that the full amount of due taxes are recovered from the industry. The ECC directed FBR to place the matter before the Cabinet after consulting the stakeholders within one week.

The ECC directed the Power Division to actively engage with companies / entities concerned to facilitate clearance of PSO’s outstanding receivables (over Rs. 300 billion) as early as possible to guard against any risk of disruption in supply chain of petroleum products and energy supply.

Pakistan Prime Minister's visit to China from 2nd to 5th November, 2018

Pakistan Prime Minister’s visit to China from 2nd to 5th November, 2018 has moved the overall economic relationship between the two friendly countries to the next level. During the visit several avenues of mutually beneficial collaboration were identified and a number of Memoranda of Understanding (MOU) were signed between the two sides in the sphere of economic cooperation. These included agreements in the area of socio-economic development, poverty alleviation, agriculture, economic and technical cooperation, forestry, earth sciences, higher education and technology.

The two sides noted with satisfaction that CPEC’s first stage, which comprised of infrastructure and energy sector improvements, has almost been completed. It was decided that the next stage of CPEC will focus on industrial expansion, agricultural revitalization and trade integration of the two economies. This phase will help the Government of Pakistan in achieving its objectives of job creation and export growth.

The two sides also held discussions on immediate market access for Pakistan’s exports as well as balance of payments support. The top Chinese leadership expressed their strong support and a Task Force was established by both sides to discuss the matters further. In this connection, a senior level delegation comprising of Federal Secretaries of Finance, Foreign Affairs, Planning & Development and Commerce along with the Governor, State Bank of Pakistan will undertake a visit to China during the current week to work out the modalities with the Chinese authorities in their respective areas.

Petroleum Prices for the month of November 2018

The Government has decided to absorb the substantial impact of increase in the prices of petroleum products and only partially pass on the increase to the consumers for the month of November. The decision has been taken to minimize the burden on the public at large.
         
Based on the international prices, the Oil and Gas Regulatory Authority (OGRA), had worked out an increase of Rs. 9.02 per litre in the price of MS (Petrol). However, an increase of Rs. 5.0 only has been allowed by the Government. Likewise as against the recommended increase of Rs. 13.22 per liter in the price of High Speed Diesel (HSD), an increase of Rs. 6.37 has been approved.  For Kerosene Oil (SKO) the recommended increase was Rs 6.47 per litre but the Government allowed an increase of Rs.3.0 per litre only. As for Light Diesel Oil (LDO), the recommended increase of Rs.6.48 has been approved as the tax/levy on this product is already quite negligible.

Finance Minister chaired the meeting of Fiscal Coordination Committee (FCC)

Finance Minister Asad Umar chaired the meeting of Fiscal Coordination Committee (FCC) here Wednesday.

Chief Minister of Sindh and Finance Ministers/senior officials of Punjab, KP and Baluchistan attended the meeting.

The meeting reviewed the bi-annual implementation of the NFC Award for the period July-December, 2016, January-June, 2017 and July-December, 2017. The reports were approved for presentation to the Parliament and Provincial Assemblies.

The meeting was briefed by the Ministry of Finance regarding the fiscal consolidation program of the Federal Government. Provincial Finance Ministers assured the Federal Government of their full support for the fiscal consolidation efforts as it was need of the hour. Governor State Bank was assigned the task to chalk-out a simplified procedure in this regard.

Matters relating to provincial surpluses were also discussed. The provincial governments expressed their support and cooperation in this realm.

The meeting also reviewed the Federal Government Public Financial Management (PFM)Program which was being run with the help of World Bank. It was agreed to constitute a Sub-Committee and Technical Committees to review various actionable items in the PFM Program. It was agreed that provincial governments will provide names of their representatives for the Sub-Committee as well as Technical Committees.

Finance Minister chaired the meeting of Cabinet Committee on Privatization (CCOP)

Finance Minister Asad Umar chaired meeting of the Cabinet Committee on Privatization (CCOP) here Wednesday.

The Secretary Privatization Commission made a detailed presentation to the Committee on the Privatization Program pursued by the government over the last two decades. The Committee discussed the objectives and rationale of the Privatization Program. It was noted that only one entity was privatized during the last five years, apart from divestment of shares in a few already privatized entities.  

The Committee gave the go-ahead to Privatization Division to undertake the process for privatization of newly established 1233 MW Balloki Power Plant and the 1230 MW Haveli Bahadur Power Plant. 

The CCOP also approved the proposal for privatization of the following entities: 

(i)              SME Bank Ltd
(ii)             First Women Bank Ltd
(iii)            Jinnah Convention Centre, Islamabad
(iv)            Lakhra Coal Mines (now Lakhra Coal Development Company)
(v)             Services International Hotel, Lahore

The Committee noted that the listing of a large number of entities on the privatization list for more than a decade had been detrimental to their operations as these were neither privatised nor any serious effort was undertaken to revitalize them. After detailed deliberations, it was decided to delist Pakistan Steel Mills, PIA, Pakistan Railways, Utility Stores Corporation, NHA and CAA from the Privatization list.  Ministry of Industries was directed to put up an action plan for operationalization of Pakistan Steel Mills within 45 days. Similar instructions for improvement and revitalization of other entities were given to the relevant ministries. In the case of CAA it was noted that the Authority performed a regulatory function and could not be privatized. 

The Committee also directed the Ministry of Industries to carry out a detailed review of all the entities in its purview, and make recommendations for their revival or privatization. Ministry of Commerce was similarly directed to review the insurance/ reinsurance sector and make recommendations. 

In the case of gas sector utilities the CCOP decided that privatization of these entities should could not be undertaken before putting in place a regulatory regime to create competitive market place. The Committee directed the Ministry of Petroleum to take necessary action in that regard. 

Regarding financial institutions it was decided to delist National Bank of Pakistan. Delisting of IDBP was also approved as the process for its winding up was already underway. In case of HBFC and NITL, Ministry of Finance was directed to submit recommendations for their retention or removal from the privatization list.

The Committee also decided not to privatize the Printing Corporattion of Pakistan and Trading Corporation of Pakistan. However the relevant ministries were directed to submit proposals for improvement in their working along with plan for disposal of their non-essential fixed assets. 

The Committee also directed the Privatization Commission to ensure complete transparency in all its transactions. 

The Finance Minister maintained that the process of divestment was meant to encourage and attract private sector partnership to turn around ailing PSEs by injecting capital, modernizing through technological upgradation besides introducing best corporate practices.

Appointment of Chairperson, BISP

The Federal Government had invited Dr. Sania Nishtar, Pakistan’s internationally acclaimed global health expert, to chair the Board of the Benazir Income Support Program (BISP). Following her acceptance, the Government has made the appointment.

Dr. Nishtar is a well-respected apolitical professional, civil society leader and former cabinet minister. She is also a widely published scholar in the field of public healthcare systems and reform.

Poverty alleviation and provision of social protection to marginalised groups, especially in the less developed areas of the country, is amongst the highest priorities of the Government. Dr. Nishtar’s appointment, in fact, reflects the Government’s commitment to achieve this policy objective by depoliticising BISP and providing it professional leadership.

BISP has recently outlined its plans for a comprehensive social protection strategy aimed at protecting the poorest of the poor from economic shocks. Under Dr. Nishtar’s stewardship, BISP is expected to further deepen its interventions and also make them more transparent through innovative targeting approaches for the most disadvantaged segments of society.

Meeting reviewed progress on FATF Action Plan, APG assessment

Finance Minister, Asad Umar chaired a meeting here Saturday to review progress on FATF Action Plan and APG assessment. 

Director General Financial Monitoring Unit (FMU) briefed the Minister about the actions taken so far on both FATF Action plan and APG assessment.

The Minister emphasized the need to enhance level of institutional coordination to ensure timely accomplishment of FATF action plan. He also desired appropriate and complete responses to APG's follow-up queries. Further it was agreed to develop an effective monitoring mechanism to ensure that all concerned stakeholders complete the assigned tasks within delegated timelines. 

The Minister directed that all stakeholders may be advised to develop internal actions plans which shall be monitored on a fortnightly basis.

Senior officials of the Ministry of Finance and other relevant stakeholders attended the meeting.

Finance Minister chaired a meeting of ECC

The ECC in its meeting chaired by Finance Minister, Asad Umar on Monday considered the proposal for electricity tariff rationalization, submitted by the Ministry of Power and directed the concerned officials to submit a detailed plan for improvements in the power sector, especially measures to increase recoveries and reduction of losses, before the proposed tariff rationalization plan could be approved. The ECC would meet again on Wednesday, to consider the above mentioned plan and tariff rationalization proposals. 

The Auditor General, shared with the ECC a report on audit findings pertaining to financial and operational issues in the four Power Distribution Companies i.e. HESCO, PESCO, QESCO and SEPCO in the years 2016-17 and 2017-18. The report highlighted significant areas of the distribution system responsible for line and commercial losses. The  chair directed Ministry of Power to take remedial measures on the issues raised in the report.

Finance Division implemented E-Office program

In order to ensure efficiency and improved performance by officers at all levels, Finance Division has implemented E-Office program in line with government’s priorities and policies. There are nearly 250 users in various wings for the E-office suite.

Mr. Arif Ahmad Khan, Secretary Finance inaugurated the e-office system in Ministry of Finance on Wednesday. Addressing senior and middle management level officers on the occasion, he called upon them to master e-office skills and benefit from the automated system.  He also stressed complete digitization of records on priority basis. He added that implementation of the program shall facilitate institutional reforms and help improve performance.

He appreciated the contribution of the National Information Technology Board (NITB) and the Finance Ministry’s team led by Mr. Javed Iqbal Khan, Joint Secretary (BI) for taking on the challenge of training a large number of officials in a short span of time. He hoped that the implementation of the E-office program at Finance Division will serve as a good example for other divisions to follow.

Special Secretary Finance chaired the meeting of National Price Monitoring Committee

The meeting of National Price Monitoring Committee was held on Wednesday at the Finance Division. Special Secretary Finance chaired the meeting.

The chairman informed the forum that there is lot of flux that characterizes the world economy at present, emerging markets are facing uncertainty. Their currencies have devalued significantly. The Federal Reserve is raising interest rate. After seeing a decade long zero rate it has surged 2.5 percent which is pushing dollar relative to other currencies. Oil prices have crossed $85 barrel and are estimated to hit $90.The rising inflation is a challenge. He urged the provincial governments that they should adhere to strict price monitoring and remain vigilant that no supply disruption of commodities in the markets takes place.

The main reason for the rise is increase in international crude oil prices. A combination of factors such as strong domestic demand, which is also visible from pressure on external and fiscal side, possible lagged impact of recent upward adjustment in gas prices, exchange rate depreciation  are contributing to recent pickup in inflation.

The meeting was informed that CPI increased by 5.60 percent during Jul-September FY 2019 compared to 3.39 percent of the same period last year.The Core inflation increased by 8.0 percent in September 2018 as compared to 5.4 percent in the comparable month of last year. The trend is alarming and signals of rising inflation in coming months.

The committee observed the rising SPI trend over the last six weeks. The Weekly SPI which monitors the price movement of 53 essential items recorded an increase of 3.65 percent on 11th October, 2018. The significant impact came from increase in gas prices by 15.45 percent over previous week.

The meeting also reviewed the prices of essential items in sasta bazaars and open markets and noted that the prices are significantly lower in sasta bazaars as compared to open markets.

The Chair emphasized that in case if the provincial governments and other stakeholders see any shortage of essential consumer items they should immediately report to the NPMC committee so that the federal government takes appropriate measures. He also asked the Competition Commission of Pakistan to remain vigilant that no cartelization takes place.

In view of difficult times ahead the meeting decided as under:-

• The Provincial Governments will fully activate price monitoring and control mechanism at district level and below to ensure price stability.
• The Provincial Governments and Federal Government will ensure adequate supply of commodities to avoid supply disruption and consequent price hike.
• The District Government will launch a campaign as and when necessary to stop hoarding of commodities for price manipulation. 
• In case of any expected shortfall in production of agriculture commodities, the relevant forum will be intimated for taking necessary action.
• The provinces should focus on oilseed crops and pulses cultivation to reduce the import bill.
  It was also emphasized that Provincial Governments and ICT administration to extend the coverage of sasta/itwar bazaars so that common man may get the commodities at reasonable price.

Finance Minister chaired a meeting of ECC

Finance Minister, Asad Umar chaired meeting of the Economic Coordination Committee of the Cabinet (ECC) here Tuesday.

The ECC approved mechanism to ensure enhanced supply of domestic gas to the five zero rated sectors of the industry. It was decided that these sectors would be given priority in allocation of gas, at par with the power sector. These industries would be supplied RLNG during the three winter months when the gas demand of domestic sector would be at its peak. During the remaining months (March-November), these industries would be supplied domestic gas & RLNG on a 50:50 basis.

The meeting was also given a briefing on the LNG terminals’ agreements signed during the previous government. The ECC decided that facts ascertained after discussion will be shared with the federal cabinet in its next meeting.

ECC lauded provincial governments in KP and Punjab on presenting very prudent and forward looking budgets.

Finance Minister held a number of meetings on the sidelines of the World Bank/IMF Group Annual meetings in Bali, Indonesia

Finance Minister, Asad Umar held a number of meetings on the sidelines of the World Bank/IMF Group Annual meetings in Bali, Indonesia on Wednesday.

Finance Minister met with his Indonesian counterpart Sri Mulyani Indrawati and discussed matters pertaining to expansion of bilateral cooperation between the two countries.

Finance Minister Umar emphasized expanding Pak-Indonesia trade relations. The Minister in this regard called upon the Indonesian side to expedite the process of ratification of the additional tariff lines granted to Pakistan after comprehensive review of the PTA in 2017.

Congratulating the Finance Minister on assuming the office after recent elections in Pakistan, Sri Mulyani Indrawati reaffirmed Indonesia’s desire to expand bilateral relations and assured her support to address the points raised by the Pakistan side.

Finance Minister, Asad Umar later had a meeting with the President of World Bank, Dr. Jim Yong Kim. During the meeting the current level of Pak-World Bank cooperation was reviewed. The Finance Minister shared with the World Bank leader, the vision of the new government and its priorities. 

The Minister also had meetings with senior officials of Multilateral Investment Guarantee Agency (MIGA) and OECD. 

Government has decided to approach the IMF for stabilisation and an economic recovery program

Immediately upon assuming office, the present Government had expressed serious concerns on the dire economic situation of the country and had committed to undertake a quick evaluation of all possible options. The Government inherited 6.6% of fiscal deficit, more than a trillion Rupees of unaccounted for losses in the energy sector and an unprecedented and debilitating current account deficit running at $2 billion a month. To correct the underlying imbalances, fiscal and monetary actions needed to be undertaken without delay. In this regard, the Finance supplementary (Amendment) Act, 2018 by the government and the policy rate increases by the State Bank of Pakistan are actions taken to stabilise the macroeconomic situation. In addition, regulatory duties on non-essential imports have had to be introduced to curb the unnecessary growth in imports.

After taking into account the current situation and consultation with the leading economists, the government has decided to approach the IMF for stabilisation and an economic recovery program. It should be noted that the government has engaged with the friendly countries in the lead up to this decision and this engagement will continue.

IMF delegation's visit

An IMF mission led by Mr. Harald Finger visited Pakistan from September 27th, to October 4th, 2018. The Mission met key stakeholders within the Government of Pakistan and exchanged views on all sectors of economy. Upon conclusion of its visit, the Mission held a wrap up meeting with the Finance Minister and his team, sharing its initial assessment of the economy.

The Mission in its evaluation has highlighted the imminent challenges facing Pakistan's economy including fiscal deficit, current account deficit, low level of reserves, accumulation of losses in public sector enterprises, non-execution of structural reforms, weakening of institutions and lack of domestic resource mobilization. Corrective measures recently taken by the Government of Pakistan in the Mission's view are steps in the right direction. The visiting team was of the view that further actions are required to be undertaken to correct imbalances in the economy and put it on a path of sustainable growth.

The Government of Pakistan largely shares this assessment of the economy and is committed to take further corrective measures to restore stability and inclusive growth. As also acknowledged by the Mission, the Government has inherited a fragile economy since critical economic decisions were delayed by the previous government in an election year. Prompt decisions on monetary, exchange rate and fiscal policies could have averted the economic downturn that Pakistan is facing today.

Going forward the Government of Pakistan is committed to take decisive corrective adjustments to restore the economy on a path of stability and growth. The Government is of the view that fiscal and price adjustments alone are not sufficient, and that unless the much delayed deep structural and institutional reforms are implemented with firm and unflinching resolve, the entrenched imbalances plaguing the economy will keep resurfacing.

Finance Ministry seeks early nominations of NFC members from provinces

The Finance Ministry has called upon provincial governments to reconfirm their nominations of non-statutory members for National Finance Commission as early as possible.

It may be recalled that Finance Minister Asad Umar had addressed letters to the provincial Chief Ministers on September 3, 2018 asking them to either re-confirm the nominations made by the previous governments or make fresh nominations so that the process for reconstitution of 9th NFC could be completed. The Ministry of Finance has now reminded the provincial finance secretaries to make the requisite nominations, as so far none of the provincial governments have shared the names of their respective non-statutory members. 

Finance Minister met with Vice President, Asian Development Bank (ADB)

Finance Minister, Asad Umar received the visiting Vice President, Asian Development Bank (ADB), Wencai Zhang for a meeting here Thursday.

They had a brief review of the ongoing and prospective ADB assisted projects in Pakistan.

The Finance Minister on the occasion said that the present Government has embarked upon a journey of structural reforms with particular emphasis on the energy structure. He spelled out the priority areas of the PTI Government which include job creation, competitiveness of the export sector through industrial development, skill  development and promotion of the SME and IT sectors. He also emphasized development of the tourism and hospitality sectors in Pakistan. He welcomed offer made by the ADB to support capacity development in various govt. institutions including Ministry of Finance through technical assistance. 

Mr. Wencai Chang said that ADB and Pakistan have together successfully met many development challenges. ADB, he said is committed to expanding this partnership to increase prosperity of the people of Pakistan. He assured the Minister of the support from the Bank in the priority sectors as identified by the present government.

Finance Minister chaired a meeting of Economic Coordination Committee of the Cabinet

At the outset, the consideration of proposal regarding tariff rationalization for power sector was deferred on the request from the Finance and Power Divisions who asked for further time to deliberate the proposed revisions.

ECC approved, after detailed discussion, the proposal from the Commerce Division for export of one million metric ton (1-MMT) surplus sugar. No freight or financial support will be provided to millers/exporters by the Federal/Provincial Governments in this regard. Only those Sugar Mills will be allowed to export sugar which have paid arrears to farmers for all the crops up to 2017-18. Moreover an inter-ministerial committee will have fortnightly meetings to review sugar stock, export and price situation. 

On another proposal of Ministry of Commerce, the ECC accorded approval for revision of cess rates of tobacco for the year 2018-19 as determined by the Pakistan Tobacco Board. It may be added that prices of various types of tobacco are fixed every year and cess rates are also revised. 

In consideration of proposal submitted by the Ministry of Privatization, ECC approved disbursement of Rs. 375 million on account of net salary for the employees of Pakistan Steel Mill for the month of August 2018.

ECC directed immediate formation of special committee comprising representatives from Finance, Power Division, Auditor General of Pakistan, Ministry of Petroleum, FBR to address various issues relating to transfer of shares of K-Electric. It may be mentioned ECC earlier on 3rd September had directed Privatization Division to deliberate upon the issues relating to the sale of K-Electric in consultation with Petroleum and Power Divisions. In order to further facilitate resolution of various issues, formation of the special committee has now been ordered.

ECC was given a detailed briefing by Ministry of Petroleum relating to the LNG Terminals. The Committee directed Ministry of Law to examine the legal agreements relating to the terminals to see whether the government could revisit the terms and conditions contained therein.
   
ECC taking notice of the sudden hike in cement price directed the Adviser on Industries to have meeting with representatives of the industry, apprise the Committee of the causes of price increase and also suggest possible remedies.

ECC also approved proposal from the Ministry of Defence Production for a Sovereign Guarantee to back the export of JF-17 Thunder Aircrafts by PAC Kamra.

Petroleum Prices for the month of October 2018

OGRA has worked out the prices of Petroleum products for the month of October, 2018 and has recommended the following increase in prices, considering the increase in global oil prices:

Pak-Kuwait Joint Ministerial Commission meeting concluded

The 2-day Pakistan-Kuwait Joint Ministerial Commission meeting concluded here on Friday. Finance Minister, Mr. Asad Umar, and Minister of Commerce & Industry of the State of Kuwait, H.E. Khaled Nasser Abdullah Al-Roudan co-chaired the meeting.

During the two days interaction there was general consensus to further strengthen the bilateral relations between the two countries especially in field of science & technology, business & finance and other potential sector of economy. Pakistan side emphasized the need for utilizing the highly capable human resource of the country that can contribute towards the growth and development of Kuwait. It was mutually agreed that both sides will facilitate frequent and unhindered movement of business community and labour force. Pakistan also expressed its desire to benefit from the extensive experience of Kuwait in the field of oil and gas exploration.

Both sides agreed that the fifth meeting of Pakistan-Kuwait Joint Ministerial Commission will be held at Kuwait in 2020.

Earlier Thursday at the Plenary Session both co-chairs, highlighted significance of Pak-Kuwait cordial political and economic relations. Minister Asad Umar expressed Pakistan’s desire to enhance economic and commercial cooperation with Kuwait for mutual benefit of both the countries. He invited Kuwaiti businessmen to invest in agriculture farmland, milk and food processing plants in Pakistan, for export of agricultural commodities of desired quality to Kuwait and other countries. He said that Kuwaiti investors may avail investment opportunities in Special Economic Zones of Pakistan in areas like automotive, food processing and textile as well as in oil & gas exploration. His Kuwaiti counterpart said that economic relation between the two countries would be further strengthened for the mutual benefits of both countries and their people.

4th Session of Pak-Kuwait Joint Ministerial Commission

Plenary Session of Pakistan-Kuwait Joint Ministerial Commission (JMC) was held here today. Federal Minister for Finance, Revenue and Economic Affairs, Mr. Asad Umar, and Minister of Commerce & Industry of the State of Kuwait, H.E. Khaled Nasser Abdullah Al-Roudan co-chaired the Session.
 
Speaking at the inaugural session, the Finance Minister welcomed the Kuwaiti delegation and said that Kuwait and Pakistan have cordial political and economic relations which are rooted in common bonds of religion and culture. He said that Pakistan desired to enhance economic and commercial cooperation with Kuwait for mutual benefit of both the countries. He invited Kuwaiti businessmen to invest in agriculture farmland, milk and food processing plants in Pakistan, for export of agricultural commodities of desired quality to Kuwait and other countries. He said that Kuwaiti investors may take benefit of attractive investment opportunities in Special Economic Zones of Pakistan in areas like automotive, food processing and textile as well as in oil & gas exploration. He hoped that businessmen of both countries will endeavour for further enhancing bilateral trade to its true potential.

The Kuwaiti Minister for Commerce and Industry expressed that economic relation between the two countries need further strengthening for the mutual benefits of both countries and their people.

CEOs of Islamic Banking Institutions called on Finance Minister

A delegation of Chief Executive Officers of Islamic Banking Institutions called on Federal Minister for Finance, Revenue and Economic Affairs, Mr. Asad Umar here at the Ministry of Finance. Secretary Ministry of Finance Mr. Arif Ahmed Khan was also present on the occasion.

During the meeting, President Meezan Bank Irfan Siddique gave a detailed presentation on Islamic Banking sector in Pakistan.

He said that there was a great demand for Islamic banking as a large segment of population wanted to avail Islamic Banking services. He said that the industry which was set up in Pakistan in 2005 had witnessed a robust growth of 35 percent. The presentation also highlighted the obstacles faced by Islamic Banking institution in its future growth.

Finance Minister said the government was committed to promote Islamic Banking sector in the country and would help in resolving the issues faced by the industry. He said level playing field would be given to the Islamic Banking along with the conventional banking. He asked the Islamic Banking to come up with innovative products through which they could participate in sectors which were facing liquidity problems.

Finance Minister held a meeting with a Saudi delegation

Finance Minister Mr. Asad Umar held a meeting with a Saudi delegation led by H.E. Ahmad Agil F.Al-Khateeb, Chairman, Saudi Fund for Development (SFD) and Adviser to the Crown Prince, at Ministry of Finance today.  Mr. Al-Khateeb was heading a six member Saudi delegation that included senior officials of SFD. The Ambassador of Saudi Arabia to Pakistan, H.E. Nawaf Saeed Al-Malkiy was also present during the meeting.

Finance Minister discussed with the delegation matters relating to strengthening bilateral economic ties between the two brotherly countries.  The ongoing and pipeline projects of Saudi Fund for Development also came under discussion with the view to accelerate the pace of their implementation. Finance Minister appreciated the role of Saudi Development Fund as a development partner of the Government of Pakistan.

The two sides also signed three MoUs for grant projects in Azad Jammu and Kashmir and Khyber Pakhtunkhwa for the health and education sectors. Secretary Economic Affairs Division and Chief Executive Officer Saudi Fund for Development signed on behalf of their respective governments.

ECC defers decision to increase electricity tariff

The Federal Minister for Finance, Revenue and Economic Affairs chaired the meeting of the Economic Coordination Committee of the Cabinet here at the Cabinet Division.

On the proposal moved by the Ministry of Energy for the “Tariff Rationalization for Power Sector” ECC directed NEPRA and Power Division to prepare a comprehensive plan for improvement in service delivery in the power sector, reduction in transmission and distribution losses and maximizing recovery. The Committee also directed power Division to ensure that while preparing the plan for any increase in power tariff; it should be ensured that the poor and lower end consumers are not unnecessarily burdened. The consideration of Ministry of Power’s proposal regarding notification of NEPRA determined tariff was pended till finalization of the aforesaid plan.

Key Points of the Budget

• Rs. 92 billion will be recovered through the use of modern technology and not increasing the taxes on individuals
• Non-filers can buy property now but on a higher (registration ) rate
• 20% duty on 1800cc cars
• Ratio of income tax maintained on salaried persons getting up to Rs.200,000 per month
• For income more than 2400000, 29% highest tax rate for non-salaried and 25% for salaried
• For PM, Ministers and Governors, exemptions from tax ( on housing allowance, Conveyance and some other allowances ) withdrawn
• CPEC will be the government’s priority
• 50 billion for the development of infrastructure of Karachi (public private partnership projects)
• Total development funding 725 billion in 2018
• Petroleum development levy which was increased from Rs189 billion to Rs300 billion,  will be capped at 189 billion, on the earlier level
• 8276 houses to be built for the laborers, 4.5 billion allocated
• Fiscal adjustment made @2.1%
• Total revenue target of FBR 4390 billion (Hammad Azhar Mos Revenue)
• Super tax maintained
• Tax on cigarettes increased from Rs. 1 to Rs10 per pack
• Withholding tax on banking transactions for non-filers to be maintained
• Sehat card to be issued soon in Islamabad and Punjab.

Delegation of All Pakistan Exchange Association met with Finance Minister

A delegation of All Pakistan Exchange Association, led by Mr.Allauddin Sheikh called on the Federal Minister for Finance, Revenue and Economic Affairs Asad Umar here on Tuesday.

The delegation apprised the Minister of the services being offered by its members to the Pakistanis. The delegation also shared with the Minister the issues they had been facing due to smuggling of foreign exchange through various means. The members of the delegation also informed the Minister regarding the Regulatory requirements that were hindering the growth of this important sector.

The delegation also shared their proposals for stopping the illegal export of US dollars from different channels and suggested measures to control under invoicing of imports.

The Finance Minister thanked the delegation for its valuable suggestions and assured them of his full cooperation in solving their genuine issues. He said that this service sector could also help in controlling Hundi and Hawala thereby ensuring remittance of foreign exchange through legal channels.

OICCI delegation called on Finance Minister

A delegation of Overseas Investors Chamber of Commerce & Industry (OICCI) led by Mr. Irfan Wahab khan, President OICCI, called on the Federal Minister for Finance, Revenue and Economic Affairs, Asad Umar this morning.

The delegation greeted the Finance Minister on taking charge of his new responsibilities. The Minister welcomed the delegation and acknowledged the importance of the corporate sector in the development of Pakistan.

President OICCI apprised the Minister that OICCI wanted to share their vision of future development of the country and how the overseas investors could become the drivers of change in the journey. The delegation shared its ideas and proposals to build the investors’ confidence both local and foreign for bringing in more investment to Pakistan.

The Finance Minister appreciated the efforts of the OICCI in assisting the government in the matters of policy formulation that could help attract further investment. The Minister said that the Government is firm on its commitment to address the key structural issues of Pakistan’s economy. The Minister said that the government is holding consultation for setting up the Business Advisory Council to establish a liaison between government and business community to make Pakistan the regional hub for investors. The Minister said that it is his vision to introduce latest technology in tax system to reduce hassle and bring in more transparency to the system.

The Minister also said that the government wants to address the issues of twin deficits on a long term basis and he believes that the key to the problem lies in promoting manufacturing industry and creating jobs for the youth of the country and this is the area where Overseas Chamber could assist and lead the way.

The Finance Minister said that the Government would soon introduce necessary changes in the Finance Act 2018 to make it more relevant to the current economic state of the country and reflective of the progressive vision of the new Government.

Finance Minister chaired a meeting on the issues relating to fertilizer production

The Federal Minister for Finance, Asad Umar along with Mr. Abdul Razak Dawood chaired a meeting here at the Finance Division on the issue relating to fertilizer production and its continued availability in the market in sufficient quantities.

Finance Minister chaired a meeting of National Executive Committee (NEC)

Finance Minister, Mr. Asad Umar chaired meeting of National Executive Committee (NEC). The NEC is high level body established to oversee both policy and implementation matters of the Anti-Money Laundering and Counter Financing of Terrorism regime. The purpose of the meeting was to discuss and review progress in AML/CFT areas of the relevant stakeholders especially implementation status of FATF Action Plan. Different stakeholders presented progress in their respective areas on Action Plan and other AML/CFT areas. During discussion, the Finance Minister emphasized to put more efforts to meet the compliance of AML/CFT regime with international standards. The Finance Minister was of the view that the Action Plan may be seen as an opportunity rather than a challenge and this Action Plan will set directions for a robust AML/CFT regime in Pakistan as per international standards. The Minister emphasized the need to work hard and achieve the desired action well before the agreed time lines as it is in the interest of the country.

APTMA delegation called on Finance Minister

A delegation of APTMA led by Mr. Aamir Fayyaz Sheikh, called on the Federal Minister for Finance, Revenue and Economic Affairs, Asad Umar. Mr. Abdul Razak Dawood, the Advisor to Prime Minister on Textile, Commerce, Industry and Production, and Investment was also present on the occasion.

The delegation congratulated the Finance Minister on assuming charge of the Ministry of Finance and said that the Industry hopes that the new government will take decisions in the interest of the Industrial sector after incorporating the feedback from the respective sectors.

The Finance Minister told the delegation that it is his foremost priority to support in any way possible the export oriented sectors of the industry and in this regard all possible cooperation will be provided from the Government.

APTMA discussed various issues regarding gas and electricity pricing, proposed withdrawal of customs duty and sales tax on import of raw materials, sales tax refunds, extension of duty drawback scheme for 5 years and maintaining market based exchange rate.

Three member delegation of the China Three Gorges South Asia investment Limited called on the Finance Minister

A three member delegation of the China Three Gorges South Asia investment Limited led by their President and CEO, Mr. Qin Goubin called on the Federal Minister for Finance, Revenue and Economic Affairs Asad Umar this afternoon.

Mr. Goubin congratulated the Finance Minister on assuming office and expressed hopes that the cooperation between Pakistan and the Chinese Energy producer will further strengthen during the term of the new government.

Mr. Goubin briefed the Minister that their Company has been working on Wind and Solar energy generation for many years. In Pakistan it is working on Karot hydropower station in the Kashmir region in cooperation with IFC.

The Minister appreciated the work being done by the company in renewable energy and said that keeping in view the impact on environment and its low cost, the new government wishes to promote clean and renewable sources of energy.

Federal Govt to Notify 9th NFC soon

The Federal Minister for Finance, Revenue and Economic Affairs Asad Umar has written letters to all Provincial Chief Ministers for the reconstitution of the 9th National Finance Commission (NFC). The NFC is required to be set up at intervals not exceeding five years as required under clause (1) of the Article 160 of the constitution. The Federal Finance Minister and the Finance Ministers of the Provinces are the statutory members of NFC. It is customary to include one non-statutory member from each province.

Letters have accordingly been dispatched to Sardar Usman Ahmad Buzdar Chief Minister Punjab, Syed Murad Ali Shah Chief Minister Sindh, Mahmood Khan Chief Minister Khyber Pakhtunkhua and to Jam Kamal Khan Chief Minister Balochistan. The letters state that after general elections 2018, new governments are in place both at the Federal and Provincial levels, necessitating re-confirmation of non-statutory members from the provinces.

The Finance Minister has asked the Provincial Chief Ministers to either reconfirm the earlier nominated members or intimate the change in the nomination to enable the Federal Government to notify the 9th NFC and start deliberations of the Commission.

Finance Minister chaired the meeting of the Economic Coordination Committee of the Cabinet (ECC)

Federal Minister for Finance, Revenue and Economic Affairs Asad Umar chaired the meeting of the Economic Coordination Committee of the Cabinet (ECC) this morning at the Cabinet Division.

The meeting received a presentation on the issue of circular debt that has accumulated over the years to a hefty sum of Rs.1188 billion. The Committee was briefed on the impact of Industrial Support Package, Azad Jammu Kashmir subsidized units, Balochistan agricultural tubewells, FATA receivables, and the impact of existing time lag on tariff determination mechanism of NEPRA.

The ECC observed that the PML-N government had taken the decision to discontinue the provision of subsidized power supply to AJK in budget 2018 and the previous government had also decided to discontinue the industrial Support package. The Committee decided to bring the facts to the attention of the Federal Cabinet.

On the issue of recoveries, it was decided that meters of those persons, Departments and Ministries or any private entity will be disconnected if they fail to pay their bills for consecutive three months. On the payment of their bills they will be provided prepaid meters Chairman ECC directed the Power Division to take strict legal action against those officials and individual who are involved in power theft and to not show any leniency on the issue.

The ECC also decided that to cope up with the issue of urea fertilizer shortage in the country, three urea manufacturing plants that are  presently in-operational will be supplied RLNG  for a period of four months starting from September with 50% cost of RLNG being picked up by the government and the balance 50% by the respective manufacturing units. These Plants will utilize their full potential and the decision to import fertilizer will be taken after taking into account their production capacity.

The ECC directed Ministry of Industries and Production to:

(i)        workout figures/data about actual production  and consumption of the urea during 2017-18 and the estimates for 2018-19, in consultation with Ministry of National Food Security & Research and submit a report thereof to the ECC in its next meeting.  In case of any  shortfall in consumption of urea, the reasons may also be identified in the report,

(ii)       facilitate the operationalization of  three closed fertilizer plants i.e. Fatimafert, Agritech and Pakarab (in case of the latter only to the extent of urea production amounting to 8000 tons per month) on 100% RLNG for urea production for four months (September - December 2018),

(iii)      workout total subsidy impact on running of all three plants i.e. Fatimafert, Agritech and Pakarab on 100% RLNG with 50% of subsidy being borne by the Government while remaining 50% being picked up by the respective fertilizer plants; and

(iv)      workout the windfall gains reaped by the fertilizer industry, in light of the net Variable Contribution Magins, as a result of charging higher rates as well as exports during 2017-18 and 2018-19.  The windfall gains may be adjusted against the subsidy outstanding in favour of fertilizer industry, under the fertilizer subsidy schemes which were in vogue during the preceding 03 financial years.

On the presentation of the Special Audit Report on payment of Circular Debt of Rs. 480 billion by the Department of Auditor General of Pakistan, the ECC directed to hold an Operational and Financial Audit of DISCOs. It was decided that the Auditor General of Pakistan will complete the Audit of 4 highest loss making Discos in one month’s time and the audit of the entire sector will be completed in two month’s time after the approval from Cabinet.

The ECC also considered the Update on the issue of sale of K-Electric and issued directions to the Departments concerned to formulate their recommendations for CCOP.

Petroleum Prices for September 2018

On the Recommendations of Oil & Gas Regulatory Authority (OGRA), the Prime Minister of Pakistan has approved the following changes in the prices of petroleum products.

Foreign Minister of Iran called on the Finance Minister

The Foreign Minister of Iran Mr. Jawad Zarif called on the Federal Minister for Finance, Revenue and Economic Affairs Asad Umar this afternoon.

The Minister greeted the guest and extended his warm wishes for the people of Iran and said that he hopes that the relations between the two Islamic and brotherly countries will strengthen further and there will be more chances for trade and energy cooperation between the two countries.

The Iranian Minister extended his felicitations to the Minister on assuming his new responsibilities and conveyed the best wishes for the new government. The Iranian Foreign Minister appreciated the warm welcome given to him by the Pakistani Government.

The Finance Minister thanked the Iranian Minister and stated that the Ministry of Finance will continue to support his efforts for further strengthening of brotherly relations between the two countries.

Japanese State Minister for Foreign Affairs Mr. Kazuyuki Nakane met with Finance Minister

The Japanese State Minister for Foreign Affairs Mr. Kazuyuki Nakane conveyed his best wishes to the incumbent Finance Minister Asad Umar on assuming charge as the new Finance Minister of the country before witnessing the signing two agreements for Installation of Weather Surveillance Radar in Multan City and Human Resource Development Scholarship. It may be mentioned that Government of Japan has extended grant assistance worth Japanese Yen 2,370 Million (approx. equivalent to US$ 21.36 Million) to the Government of Pakistan for the two projects titled (i) Installation of Weather Surveillance Radar in Multan City and (ii) Human Resource Development Scholarship.

The Finance Minister welcomed Mr. Nakane and said that the new government wishes to strengthen its economic ties with the Japanese Government for achieving full bilateral business potential.
The Japanese Minister said that Pakistan and Japan have diplomatic relations since 1952 and we wish to further strengthen the relations in future. The Japanese Foreign Minister said that with the NAYA PAKISTAN there should also be “Naya Japan Pakistan” stressing on the need to further improve trade relations between the two countries.

Installation of surveillance weather radar will enhance Pakistan’s Meteorological Department (PMD)’s capabilities in meteorological observation, weather forecasting and dissemination of warnings through the installation of a sophisticated radar system. This will contribute to the mitigation of damages caused by natural disasters and reduce extensive damages to agricultural products and transportation.

Human Resource Development Scholarships will strengthen the government’s administrative capacities in by providing opportunities to the young capable government officials to obtain master’s degree and then play leadership role in contributing to the socio-economic development of the country.

The Finance Minister acknowledged the support of Japan for extending economic and technical assistance to Pakistan in the sectors of energy, road infrastructure, industries, agriculture, water, health, education and security. He also said that Pakistan will welcome the Japanese investment through joint ventures between the private sectors of the two countries.

Finance Minister chaired a meeting of Economic Coordination Committee (ECC)

The Meeting of the Economic Coordination Committee of the Cabinet (ECC) was held under the chairmanship of Asad Umar Federal Minister for Finance, Revenue, and Economic Affairs today at the Prime Minister’s Secretariat.

Chairman ECC expressed displeasure on the issue of Fertilizer pricing and its export, taken by the previous government which was totally against the interests of the farmer community. He said that the interest of the poor farmer should be the supreme motivation for taking such decisions. The ECC was informed that the total requirement of fertilizer for the country for this sowing season would be around 600,000 tons. The ECC directed that a committee will be formed under the chairmanship of Advisor Industry and Production Mr.Abdul Razak Dawood to hold discussions with the local fertilizer industry to ascertain the total domestic production. The committee will present its recommendations in next ECC meeting following which the decision will be made regarding import of urea.

Ministry of Energy, Power Division gave a detailed presentation on the amount of piled up Circular Debt. According to the data compiled up to 31st July 2018 by the Ministry, It was brought to the notice of the ECC, that the amount of Circular debt is standing at Rs.596 billion with an increase of Rs. 30 billion in the last month (i.e. July), another Rs. 582 billion are parked with the Power Holding companies under the STFF arrangements. The total liability currently stands at Rs.1188 billion. The ECC identified the 5-6 key areas that accounted for the pile up of these liabilities and formed different committees to work upon the reasons and formulate their suggestions to be presented in the next ECC meeting that is to be scheduled in the next week. ECC will later present its suggestions to the Cabinet for the approval and decision on the future course of action. Chairman ECC stated that all facts will be shared with the public to make decision making a transparent and inclusive exercise.

The summary for Pakistan State Oil Financial health and Liquidity position was deferred as the issue is closely linked with Circular Debt therefore the matter would be considered subsequently.

Finance Minister met with South Asia Regional Vice President of World Bank

Mr. Asad Umar, Minister for Finance, Revenue and Economic Affairs met with South Asia Regional Vice President of World Bank, Mr. Hartwig Schafer at Ministry of Finance today.  The Finance Minister welcomed the Vice President and stated that World Bank had been long standing development partner of Pakistan and had offered significant support to the Government over the years.

The Vice President stated that his Bank will continue to extend support to Government of Pakistan for implementation of the agenda for economic growth and social development being pursued by the new government. He outlined that achievement of economic stabilization is an important objective for government. The Vice President also emphasized the importance of Human Capital Development, Macroeconomic Stabilization and Inclusive Growth for Pakistan; and reaffirmed World Bank’s support to Pakistan in these areas.

The Minister for Finance, Revenue and Economic Affairs informed the visiting Vice President of World Bank that the government will take all the requisite measures to implement the economic reform agenda to help put the economy back on track. Finance Minister also shared with the Vice President that the new government desires to enhance the role of private sector and for that private sector will be encouraged to take lead in the economic development of the country. 

The meeting was also attended by Secretary Finance and Joint Secretary (WB), Economic Affairs Division.

Ambassador of People’s Republic of China called on the Finance Minister

Mr. Yao Jing Ambassador of People’s Republic of China called on the Federal Minister for Finance, Revenue, and Economic Affairs Asad Umar here at the Finance Division.

The Minister greeted the guest and extended his best wishes for the People’s Republic of China. The Ambassador extended his felicitations to the Minister on assuming his new responsibilities and expressed his good wishes for the new government. The Ambassador said that he looked forward working closely with the Ministry of Finance with a view to further increasing the economic cooperation between the two countries.

The Minister thanked the Ambassador and expressed his desire to further enhance bilateral cooperation in various fields, referring to CPEC the Minister said that the corridor will play an important role in taking Pakistan’s economy forward as well as cementing the bilateral relationship. He assured the ambassador of his full support for the assistance in that regard.

Saudi Ambassador to Pakistan called on the Finance Minister

Mr. Nawaf Bin Said Al Malki, the Saudi Ambassador to Pakistan called on the Federal Minister for Finance, Revenue, and Economic Affairs Asad Umar here at the Finance Division.

The Minister greeted the guest and extended his warm wishes for the people of Saudi Arabia. The Ambassador extended his felicitations to the Minister on assuming his new responsibilities and conveyed the best wishes and full support from King Salman bin Abdulaziz Al Saud . The Ambassador said that the bilateral relations between the countries are rooted in history and will further strengthen in future.

The Minister thanked the Ambassador and stated that the Ministry of Finance will continue to support his efforts for further strengthening of brotherly relations between the two countries.

Finance Minister chaired a meeting to review the working of Economic Affairs Division

The Federal Minister for Finance, Revenue and Economic Affairs Asad Umar chaired a meeting here to review the working of the Economic Affairs Division, today.

The Minister was given detailed briefing on various aspects of economic cooperation with various bilateral and multilateral development partners. The briefing included financial progress of different foreign funded projects as well as certain aspects of potential projects to be included in the pipeline in future.

Visit of Asia Pacific Group (APG) delegation to Pakistan

A team of Asia Pacific Group (APG) Secretariat and International Assessors visited Pakistan from 13-17 August 2018 in connection with mutual evaluation of the country’s Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) regime.

The visiting APG delegation called on the Caretaker Finance Minister, Dr. Shamshad Akhtar today and had discussion with her about the purpose of their visit, issues in compliance of policy actions and the schedule of further activities concerning the mutual evaluation. The Minister welcomed the delegation and expressed Pakistan’s commitment and full cooperation to work with APG and FATF, and to provide necessary support to the delegation to complete its task of mutual evaluation. The Minister gave a strong sense that the concerned authorities would be able to complete their respective tasks as early as possible. The Finance Minister urged the APG delegation to be flexible and practical in their deadlines and allow full opportunity to the authorities to provide necessary materials and reports to APG. The Minister particularly highlighted the transition of government as a consequence of the General Elections 2018 in the country and maintained that the incoming government would need further time to gear itself with the requirements of mutual evaluation and related matters.

Earlier the APG delegation met with the operational teams of different Ministries, organizations and authorities concerned with AML/CFT, including Ministries of Finance, Interior, Foreign Affairs and Law & Justice, State Bank of Pakistan, Securities and Exchange Commission of Pakistan, CDNS, NACTA, FIA, FBR-Customs, FBR-IRS, NAB, ANF, Provincial CTDs, and FMU.

The meetings enhanced the understanding of the APG delegation on Pakistan’s technical compliance with 40 FATF standards and provided necessary information and clarity in this regard. The APG delegation explained the assessment methodology of FATF, its provisional analysis of Pakistan’s compliance and highlighted the need to provide all relevant materials in support of the compliance position given by Pakistan. The authorities made out a strong case of technical compliance and highlighted various legislative, administrative and regulatory instruments in support of their position. The APG delegation acknowledged Pakistan’s position and advised the authorities to share final reports on technical compliance and effectiveness of implementation with APG by the end of August 2018. The APG delegation further explained the schedule of activities in connection with the mutual evaluation process.

The APG delegation appreciated the coordination and facilitation extended by the Government of Pakistan and all the authorities that remained available during the pre on-site visit to explain Pakistan’s technical compliance with FATF standards. The APG delegation appreciated the clarifications provided by the Pakistani authorities, which helps delegation in better understanding Pakistan’s AML/CFT regime. The delegation hoped that all the preparatory work would be completed before the final on-site meeting in October, 2018.

Finance Minister chaired a meeting of National Executive Committee

Finance Minister, Dr. Shamshad Akhtar chaired meeting of National Executive Committee (NEC) here. 

NEC is high level body established to oversee both policy and implementation matters of the Anti-Money Laundering and Counter Financing of Terrorism regime.
          
The meeting, among others, was attended by Minister Interior and Minister of Law, Governor State Bank of Pakistan, Secretary Foreign Affairs and senior officials of FMU, NACTA, FIA, FBR, SECP and  other departments and institutions concerned.
           
The meeting took stock of the  progress made to strengthen the institutional framework and coordination for the implementation of the FATF Action Plan.  Most principal agencies reported having set up focal points and dedicated units to pursue effective implementation.   Senior officials from various departments concerned briefed the meeting on progress regarding their respective spheres of work and there was an agreement that all agencies will coordinated to fast track work on FATF Policy Action Plan to ensure effective compliance with the  action plan.   In line with its mandate, the Financial Monitoring Unit (FMU) will coordinate the review and prepare a consolidated progress report for final submission to the Asia-Pacific Joint Group by middle of August 2018.
          
The meeting agreed on key steps to be taken to 

(i) strengthen the Federal-Provincial Coordination to ensure effective coordination among the law enforcing agencies and the concerned provincial departments; (ii) formation of a review group to finalize the critical components of the national risk assessment; (iii)  launch work on the mutual evaluation  by APG soon. and (iv) stregnthen FMU to ensure it is able to coordinate overall AML/CFT work and offer the required advisory support to all agencies.  NEC reviewed preparations for the APG and other assessors forthcoming visit to Pakistan from by second week of August, 2018 and the preparations for the 2nd  meeting of the Asia-Pacific joint group and Pakistan  scheduled to be held in mid-September 2018  which will examine progress in different areas of  the FATF Action Plan.  APG and the assessors will meet various AML/CFT stakeholders to discuss Technical compliance (TCQ) report and additionally the Effectiveness report submitted by Pakistan and ML/TF risks in Pakistan. The visit will serve as an opportunity to develop understanding among domestic authorities on the mutual evaluation procedures and assessment methodology.

Prices of Petroleum Products to remain unchanged

The Government has decided to maintain the prices of petroleum products at the existing level during the month of August 2018.

Despite price increase recommended by OGRA due to price hike in international market, the Government has decided to keep the rates of petroleum products unchanged. Tax/duty adjustments have been made accordingly.

Finance Minister has expressed profound grief and sorrow over the sad demise of Abdul Ghafoor Mirza, former Federal Secretary Finance

Finance Minister, Dr. Shahmshad Akhtar has expressed profound grief and sorrow over the sad demise of Abdul Ghafoor Mirza, former Federal Secretary Finance.

In her condolence message, the Minister prayed that may Allah Almighty grant eternal peace to the departed soul and fortitude to the bereaved family to bear this loss with equanimity.

PBC delegation met with Finance Minister

A delegation of the Pakistan Business Council (PBC) led by Ehsan Malik and Bashir Ali Mohammad met Finance Minister, Dr. Shamshad Akhtar here Thursday.   The meeting was attended by secretaries of the Ministry of Finance, Ministry of Planning, Development and Reform, the Ministry of Energy and Chairperson Federal Board of Revenue and additional secretary of the Ministry of Commerce.

The CEO, PBC made a comprehensive presentation of the issues facing corporate sector and shared proposals on strengthening the overall business environment and steps that could help boost different sectors of the economy.  Concern was expressed regarding the trend towards deindustrialization in the country as Pakistan industry lacked competitiveness given the high cost of power and gas and faces difficult business environment because of distortions in incentive framework and inconsistencies of policy regime.  The PBC delegation advocated for provision of energy at competitive costs and addressing in a more holistic manner, the inefficiencies of DISCOs including their eventual privatization that have resulted in high cost of power to industry.  At the same time PBC emphasized broadening of tax base, reduction in indirect taxes and cascading duty structure. The delegates called for reduction and simplification and reduction in the number of taxes through unification of multiple taxes and reduction in tax rates to strengthen taxcompliance. The delegation also laid emphasis on provision of level playing field with the informal sector, with focus on steps for ease of doing business that would ultimately revitalize growth of industry and thus generate jobs, exports and revenues for the national exchequer to invest in social development. The delegation observed that there was a need to effectively tap the potential in the country’s housing sector as it could help generate a large number ofjob opportunities annually.   PBC called for establishment of a a High level Council including political leaderships as well as independent and corporate experts tasked to develop deeper structural reforms and achieve broader acceptability and consensus from various quarters concerned.

Tax Amnesty Schemes

The Ministry of Finance assures all applicants making declarations under the Tax Amnesty Scheme that the information provided by them shall remain strictly confidential and the guarantees provided under the scheme shall be abided in letter and spirit.

Tax Amnesty Schemes - 2018

Government of Pakistan announced two tax amnesty schemes, namely, Foreign Assets (Declaration and Repatriation) Ordinance, 2018 for undisclosed foreign assets and Voluntary Declaration of Domestic Assets Ordinance, 2018 for undisclosed income and domestic assets. However as required by the Constitution, both Ordinances were placed before the Parliament and through Finance Act 2018, these became Voluntary Declaration of Domestic Assets Act, 2018 for undisclosed income and domestic assets and Foreign Assets (Declaration and Repatriation) Act, 2018 for undisclosed foreign assets. These Acts were further amended through Presidential Ordinances on June 30th, 2018.

The original closing date for filing declarations under the amnesty scheme was June 30th, 2018. It has been extended till July 31st, 2018 on account of representations from trade bodies, professional associations and general public due to short operational period after clearing legal and procedural challenges and problems faced by declarants in the payment of tax on foreign assets and repatriation of liquid assets. The Presidential Ordinances dated June 30th, 2018 amended the amnesty acts to extend the applicability date of the schemes and to include explanations on ambiguities such as exchange rate. The amendment Ordinances have also provided for revision of declarations.

Public response to the schemes has been positive. So far, 55,225 declarations have been filed in which declared value of foreign assets is around Rs. 577 billion and that of domestic assets is around Rs.1,192 billion. Declarants have paid around Rs. 97 billion out of which around Rs. 36 billion have been collected on foreign assets and 61 billion on domestic assets. In addition, $ 40 million has been repatriated. This response to the amnesty schemes has been unprecedented.

Amnesty scheme for foreign assets applies to both liquid and immovable assets such as bank accounts, shares and mortgaged properties. Tax rates range from 2% to 5%, depending on the type of asset. Special tax rate of 2% is applicable to liquid assets which are repatriated into Pakistan. The amnesty scheme for domestic assets covers all types of assets and income, with tax rates of 2% and 5%. To protect declarants from any harassment, both schemes under Voluntary Declaration of Domestic Assets Act, 2018 and Foreign Assets (Declaration and Repatriation) Act, 2018 promulgated on 8th April 2018 which eventually was made part of Finance Act 2018 to ensure complete confidentiality of declarant’s information. Moreover, such information cannot be used as evidence against declarants under any other law.

Finance Minister is closely monitoring the operation of the amnesty schemes and constantly advising both the FBR and SBP for improving payment procedures and ensuring effective facilitation. As per directions of the Finance Minister, FBR has set-up help lines, which operate 24/7 with dedicated telephone lines and e-mails for quick response to queries. FAQs, online user guide and all relevant documents have been published on FBR’s website (www.fbr.gov.pk) which are periodically updated on the basis of queries raised by intermediaries and declarants. Frequent interaction withprivate sector including accounting professionals and tax practitioner bodies have been helpful.  Similar arrangements have been put in place in SBP.

The online user guide provides step by step information regarding registration under the amnesty schemes, procedure for payment of tax and submission of declarations. Officers well versed with the features of the amnesty schemes have been assigned the task of responding to queries. There is also a fully functional IT support team which regularly monitors online IT system.

For payment of tax on foreign assets, State Bank of Pakistan has devised a procedure, whereby tax in USD is deposited into SBP’s account through wire transfer. Government has issued Government of Pakistan’s US Dollar Denominated Amnesty Rules, 2018, whereby SBP has been authorized to issue these bonds having a maturity period of five years and annual profit of 3% to be paid semi-annually. According to the rules, citizens of Pakistan can invest in these bonds out of remittances declared under the foreign amnesty or through encashment of foreign currency accounts held in Pakistan.

The low rates of the Amnesty Schemes ranging between 2% - 5% and is a major incentive for declaring undeclared assets and income. Pakistan has also become a signatory to the OECD Multilateral Convention which will provide access to information about offshore financial accounts of Pakistani residents from September 2018. This will enhance the capacity of FBR due to access to offshore financial accounts of Pakistani residents held in the signatory countries. Necessary amendments have also been made in the Protection of Economic Reform (PERA) Act, 1992, to regulate FX movements and bring it in line with Income Tax Ordinance, 2001. Moreover, amendments have been made in the Income Tax Ordinance, 2001, whereby FBR may inquire about the source of foreign remittance above Rs.10 million and limitation of five years to probe foreign assets and income has been removed.

Finance Minister chaired a meeting on measures against cross border illegal transportation of currency

Finance Minister, Dr. Shamshad Akhtar here Tuesday chaired a meeting to discuss measures against cross border illegal transportation /smuggling of currency.

The Minister at the outset of the meeting said that as part of steps to check terror financing and menace of money laundering we need to put in collective efforts to check currency smuggling through our borders to control terrorism and other criminal activities.

The Minister highlighted the areas for immediate focus to check cross border illegal transportation of currency. She said it is important that authorities properly identify and understand the nature of risks of cash couriers that are being used for Terror financing. She said there is need for further strengthening the currency/ Bearer Instruments declaration/seizure regime at all ports of entry by applying effective, proportionate and dissuasive sanctions when there are instances of false declaration/failure to declare and currency smuggling. Dr. Shamshad stressed effective implementation of the integrated database for monitoring and enforcing SBP's currency regulation regime at all ports of entry. She said it is important that authorities at the border points should enhance the coordination and cooperation by sharing information on currency smuggling. Customs and other agencies need to work together to improve border controls. Effective internal co-operation is essential in order to effectively control the problem, the Minister added.

The meeting expressed consensus on physical and technological up-gradation of systems, in line with international standards, at all ports and other check points along the borders. The meeting observed that legal provisions to check currency smuggling and bring to book those involved in this crime were in place. However, effective implementation and further consolidation in this area should be enhanced.  The meeting also emphasized close coordination among agencies/institutions concerned at airports and border check points for effective control of currency smuggling. There was also emphasis on ensuring currency declarations by passengers on all incoming and outbound flights besides scanning of passengers’ belongings.

Finance Minister welcomed the suggestions made by the participants and said their speedy implementation was the requirement. She directed FBR for immediate assessment of the legal regulatory deficiencies as well as tools, instruments and equipment required to put in place checks and controls at ports, entry/exit points to curb illegal currency transportation/smuggling. She said checking currency smuggling would ultimately help the cause of curbing terror financing and money laundering.

Finance Minister met with Alice G. Wells, US Principal Deputy Assistant Secretary of State

Finance Minister, Dr. Shamshad Akhtar received US Principal Deputy Assistant Secretary of State for South and Central Asia, Alice G. Wells for a meeting here on Tuesday.

They discussed the current state of Pak-US relations with particular focus on economic cooperation. The overall security situation in the region also came under discussion.

Finance Minister said that such bilateral visits enhance understanding of each other’s point of view on important issues. She also apprised Ms Wells about the current state of economy and said it was poised to move forward on the path of growth despite difficulties.

Ms Alice Wells said that Pak -US relationship is important and the US would like to carry it forward.

The Minister on the occasion also briefed Alice Wells about Pakistan’s participation in the recently concluded FATF meeting at Paris, France. She said Pakistan has reiterated its strong commitment to take every possible step to root out the menace of terror financing and money laundering. Ms Wells appreciated Pakistan’s stance on FATF issues.

FATF Plenary meetings were held in OECD, Paris from 24th to 29th June 2018

FATF Plenary meetings were held in OECD, Paris from 24th  to 29th June 2018 to discuss issues relating to security and integrity of the global financial systems. The meetings were attended by delegates from several countries  as well as the UN, IMF, World Bank and other multilateral institutions.

Pakistan delegation was led by Finance Minister, Dr. Shamshad Akhtar  along with officials from Ministry of Finance, Ministry of Foreign Affairs, State Bank of Pakistan and Financial Monitoring Unit. On the sidelines of FATF and ICRG meetings, the Pakistani delegation held bi-lateral meetings with several FATF members to ensure their support for Pakistan in the FATF process. FATF members were informed that the Government of Pakistan already sent its commitment letter to the FATF Presdient on the Policy Action Plan on 22 June 2018.   

A special intervention to FATF/ICRG was made by Dr. Shamshad Akhtar. She emphasised that Pakistan was steadfast in upgrading the AML/CFT standards and ensuring their enforcement. She reiterated the Government of Pakistan’s strong resolve to strengthen its counter measures against terrorism and terrorism financing, and to implement the Action Plan by adopting a “whole-of-government” approach. This opportunity was instrumental in ensuring Pakistan’s commitment to the world for compliance of international standards and increasing effectiveness of regulatory and enforcement regimes for its own benefit.

Extensive preparation in consultations with all the concerned authorities and inititating some actions prior to the Paris meetings was helpful in strengthening Pakistan’s case. The FATF/ICRG group supported  Pakistan’s proposition on keeping the timeframe realistic for implementation of policy actions.

Further to the decision already made at the FATF Plenary held in February 2018, the FATF Plenary of June 2018 approved the Action Plan for Pakistan and placed Pakistan on its Public Statement in the Ongoing Compliance section.

Pakistan, OECD to strengthen cooperation in various areas including tax related matters

Pakistan and Organization for Economic Cooperation and Development (OECD) would further strengthen their cooperation in various areas including tax related matters and sharing of experiences in social and economic development. The OECD will extend technical assistance to Pakistan in its efforts for undertaking broad based tax reforms.

These views were expressed during the bilateral meeting between Finance Minister Dr. Shamshad Akhtar and OECD Secretary General, Angel Gurria at the OECD Headquarters in Paris.

Both sides expressed satisfaction over the ongoing cooperation between Pakistan and the OECD. Pakistan signed the OECD Convention on Mutual Administrative Assistance in Tax Matters in September 2016, and Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Sharing (BEPS) as well as Multilateral Competent Authority Agreement on Automatic Exchange of Financial Accounts (MCAA) in June 2017. Pakistan has previously been participating in various OECD Global Fora meetings.

The Secretary General invited Pakistan to further enhance its engagement with the OECD by participating in its various programmes including the Initiative on Global Value Chains, inclusive growth framework, detection of foreign bribery and revenue statistics. Minster for Finance & Revenue discussed support to conduct an in-depth review of Pakistan’s tax policy to support its reform effort as well as technical assistance through Tax Inspectors Without Borders Program. The Secretary General asked the OECD team to follow up on the request on an urgent basis. 

Moody's Investor Service reaffirms Pakistan's ratings

Moody’s Investor Service, on June 20, 2018 reaffirmed Pakistan’s local and foreign currency long-term issuer and unsecured debt ratings as B3. While reaffirming the credit rating, Moody’s has appreciated Pakistan’s robust growth potential, supported by ongoing improvements in energy supply and infrastructure which have the potential to raise economic competitiveness over time. The outlook has, however, been changed to Negative on account of factors which may impact the external account situation.

The Government is fully aware of the challenges facing its external account and short to medium term remedial measures are already being put in place. To curtail aggregate demand, interest rate has been enhanced by 75 basis points since January 2018. The added exchange rate flexibility is expected to contribute towards containing the current account deficit.As exports pick up, 13.3 percent increase in July-April period, and CPEC related imports peak out, the current account deficit is expected to peak this year and decline in the coming years.FDI and remittances have also rebounded with an increase of 2.5 percent and 3.9 percent respectively during current financial year.The Government has also successfully decelerated the import bill through imposition of regulatory duties on non-essential and luxury items. Following clearance from the Supreme Court of Pakistan, the recently announced Amnesty Scheme is also expected to bring additional inflows. The country has sufficient foreign exchange reserves to meet its obligations on account of external debt repayments.

The Government is fully committed to maintain sound policies with the aim of sustaining macroeconomic stability and accelerating economic growth. The growth trajectory achieved over recent years is testimony to the success of the Government’s reforms agenda. Heavy investments in the energy and infrastructure sectors under the China Pakistan Economic Corridor (CPEC), keeping inflationary pressure to levels below 4 percent, achieving fiscal discipline and introducing greater transparency are some of the highlights of the recent past.

Finance Minister chaired a high level meeting at FBR

Finance Minister, Dr. Shamshad Akhtar chaired a high level meeting at the Federal Board of Revenue (FBR) here on Tuesday.

During the meeting Chairman FBR briefed the Minister about the progress of the Tax Amnesty Scheme and the current state of revenue generation. He said that moral suasion has been the hallmark of FBR’s drive to encourage people to declare their assets at home and abroad and contribute to the national exchequer. He said overall there has been positive response to the amnesty scheme and it would have significant bearing on revenue generation. The Chairman shared with the Minister details about the task carried out by the Tax Reforms Committee over a period of time, making recommendations and proposals for reformation of the tax regime. He also apprised her about the working of the High Powered Implementation Committee which has seen to it that recommendations for tax reforms are prioritized in terms of their utility and implemented in letter and spirit.

Finance Minister, while reiterating that the date for the amnesty scheme would not be extended, urged senior FBR officials to keep up efforts for best possible results under the scheme. She also emphasized effectively utilizing public liaison/advertisement campaign during remainder of the scheme’s validity period to take the scheme to a meaningful and conclusive end.

The Minister also on this occasion called upon FBR to come up with measures, particularly those for simplification of filing of returns and automation that can help enhance revenue generation. She also highlighted the need for installation of quality scanners at all the ports, completely replacing physical checking for Customs clearance, a step that she said would help boost revenue.

Petroleum Prices for the month of June 2018

Click here for Petroleum Prices for the Month of June 2018

Mr.Patchamuthu Illangovan, Country Director World Bank called on the Finance Minister

Mr.Patchamuthu Illangovan, Country Director World Bank called on the Minister for Finance, Revenue, Economic Affairs, Statistics and Planning Development and Reforms Dr. Shamshad Akhtar on Thursday.

Mr. Illangovan felicitated the Finance Minister on assuming her new responsibilities and assured of all possible cooperation from the bank in important development projects.

Finance Minister thanked Mr. Illangovan for his best wishes and said that with the valuable support from our development partners our journey for the development of the country will continue in future.

Finance Minister Dr. Shamshad Akhtar chaired a meeting to review the performance of FBR

Dr. Shamshad Akhtar , the Minister for Finance, Revenue, Economic Affairs, Statistics and Planning and Development chaired a meeting here on Wednesday to review the performance of the Federal Board of Revenue in the current financial Year (2017-2018).

Chairman FBR, Mr. Tariq Mehmood Pasha, felicitated the Minister on assuming her new responsibilities and gave a detailed presentation on the measures so far being taken by the Federal Board of Revenue to achieve the tax collection targets, the major steps taken by FBR to facilitate the tax payers and the key achievements of FBR during the last five year’s period.

The Chairman briefed the Minister that the tax to GDP ratio has increased from 8.7% in 2012-13 to 12.4% of GDP in 2017-18. He told that the number of tax return filers have almost doubled to 1.4 million till 2017-18 and worth Rs.300 billion of SROs have been eliminated as a major reform to broaden the tax system. He also said that for the facilitation of the tax payers their CNIC has been adopted as the National Tax Number and the number of tax slabs have been reduced to 4 from 7. He also mentioned the queue management system for the Sales Tax Refund and direct transfer of sales tax refunds into tax payer’s accounts as major reforms to upgrade the tax system in the country.

The Minister during the meeting discussed the overall macro-economic condition of the country and the importance of FBR as the major revenue generation source for the Government’s operations. The Minister stressed the need to improve Tax to GDP ratio of the country to fund the development projects. She also sought the feedback from the FBR Chief on the impact of different amnesty schemes and tax rebates offered by the previous government on the revenue collection targets. The Minister also stressed the need for the up-gradation of the tax system through the use of technology. After the meeting, the Minister directed Chairman FBR to make all possible effort to achieve the revenue collection targets this year. The Chairman assured the Minister of his all possible cooperation on the matter.

The meeting was attended by senior officers of Ministry of Finance and Federal Board of Revenue.

Finance Secretary chaired a meeting of National Price Monitoring Committee

The Finance Secretary while chairing the National Price Monitoring Committee meeting here took notice of consecutive rise in SPI which monitors the prices of essential commodities on a weekly basis and desired that the provincial governments should be more vigilant in controlling prices. Their district prices control committees should play a pro-active role in checking the prices and see undue profiteering is not taking place. He also asked the Competition Commission of Pakistan to remain vigilant that no cartelization takes place.

The Chair also emphasized for additional administrative measures that prices remain under control and that the coverage of sasta/itwar bazaars for the benefits of masses should be extended. The provincial governments and other stakeholders may remain vigilant to avoid any supply shortage. Any anticipated shortfall in supply may be addressed immediately to avoid price hike.

The meeting was informed that Punjab Government has placed an excellent model for checking and controlling the prices particularly through video links in different districts. The other provinces are also making efforts in the same direction and should follow the same model.

The meeting was attended by representatives from the Provinces of Punjab, Sindh, Khyber Pakhthunkhwa, Islamabad Capital Territory, Ministries of Industries, Commerce, National Food Security and Research, Planning Development and Reforms, Inter Provincial Coordination, Statistics Division, Pakistan Bureau of Statistics, Utility Stores Corporation and Federal Board of Revenue.

Moody's reaffirms Pakistan's credit profile as B3 Stable

Moody’s Investor Service, one of the world’s most respected and widely utilized credit rating agency, on May 18, 2018, reaffirmed Pakistan’s credit profile as B3 stable. The reaffirmation is based on the country’s strong growth performance and potential, a relatively large economy and the sustained reforms programme undertaken by the Government in the last five years. Moody’s credit analysis also highlights the greater transparency which Pakistan has achieved in its economic field besides keeping inflationary pressure to low levels and investing heavily in the energy and infrastructure sectors under the China Pakistan Economic Corridor (CPEC). 

The stable outlook reflects the country’s potential to further strengthen its growth beyond current levels with successful implementation of CPEC projects, cashing in on both foreign and domestic investments, continued robust activity of large scale manufacturing and a rebounding agriculture sector all of which would aid Pakistan to shift to a higher growth trajectory on sustained basis.

Moody’s in its report also highlights the size of Pakistan’s economy, with a nominal GDP of $305 billion in fiscal 2017 – the third largest among sovereigns in B rating category – which affords the country resilience to local and external shocks. Pakistan also fares better in GDP growth among its peers with 5.8 percent growth in fiscal 2018, as compared to the median 2017 growth of 3.8 percent among B rated sovereigns.

The report refers to implementation of structural reforms and the fiscal discipline achieved by the country in recent years. Moody’s expects fiscal deficit to remain around 5.5 percent of GDP in fiscal 2018 on the back of strong revenue collection in the first six months which witnessed a 20 percent rise as compared to the corresponding year-earlier period. 

Some areas where the country requires renewing its focus are increasing the revenue base, investing in social sectors, improving competiveness, reinvigorating privatization and managing debt profile astutely. The future outlook, however, bodes well for Pakistan as the reform agenda continues and key targets of macroeconomic stability, fiscal discipline and growth supporting initiatives continue on track. Moody’s expect the country to maintain the growth momentum in the next fiscal also.

Government of Pakistan welcomes the re-affirmation of Pakistan’s sovereign rating by Moody’s Investors Service. It shows that Pakistan’s economy, despite challenges, is on a stable path to a higher growth trajectory.

Government of Pakistan Launches Shuhadas Family Welfare Account (SFWA) Scheme

Government of Pakistan has announced a Scheme to benefit the families of Shuhadas who offered sacrifices in the war on terrorism. The scheme was announced during the Budget speech for year 2017-2018. The beneficiaries include the families of Shuhadas of armed forces, law enforcement agencies and civilians. Scheme envisages payment of profit to an eligible family member of Shuhadas at a rate equivalent to given on Behbood Savings Certificates. Moreover, the profit is exempt from deduction of Withholding Tax.

The National Savings Organization framed rules under the guidance of Finance Division, which have been approved by the Federal Government and notified by the Finance Division on 11 May, 2018. The scheme will be implemented by National Savings Organization.

It is estimated that families of more than 27,000 Shuhadas can benefit from the scheme.