Press Releases/Media
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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• For PM, Ministers and Governors, exemptions from tax ( on housing allowance, Conveyance and some other allowances ) withdrawn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

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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.