Pakistan, UK to launch trade dialogue soon
Pakistan and the United Kingdom will soon launch a trade dialogue aimed at fortifying trade and investment relations between the two countries.
Federal Minister of Commerce Jam Kamal Khan stated this in a meeting with British High Commissioner to Pakistan Jane Marriott where key strategies were outlined to bolster the already robust trade relations between Pakistan and the UK.
The minister emphasised the deep-rooted political and historical ties between the nations and the significant strides made in trade. He praised the Developing Countries Trading Scheme, initiated in June 2023, as a pivotal opportunity for Pakistan to amplify trade volumes with the UK.
New taxpayer zones in Balochistan, K-P accepted
The Federal government has decided to establish two special large taxpayer zones in Balochistan and Khyber-Pakhtunkhwa (K-P). These zones will be set up within the limits of the Regional Tax Office (RTO) Quetta and Regional Tax Office (RTO) Peshawar. The Board in Council of the Federal Board of Revenue (FBR) has approved the establishment of these zones. Member Inland Revenue Operations and member admin and human resource have been tasked with implementing the decision, with all other FBR members also responsible for its execution.
Foreign currency reserves rise to 5-week high
Pakistan’s foreign exchange reserves, held by the State Bank of Pakistan (SBP), hit a five-week high above $8 billion as the central bank apparently absorbed surplus US dollars in the inter-bank market.
Healthy inflows of foreign currency helped the rupee gain Rs0.02, which closed at a new five-month high at Rs278.39/$ in the inter-bank market.
In the open market, the currency surged Rs0.22 and reached Rs280.90/$, according to the Exchange Companies Association of Pakistan (ECAP).
Shehbaz takes charge of FBR overhaul
Prime Minister Shehbaz Sharif has decided to lead the reform process in the Federal Board of Revenue (FBR) himself amid the startling revelation that over 80 percent of bank accounts in Pakistan are not declared to the tax authorities.
The prime minister has appointed himself as the chairman of the Steering Committee, which will oversee the implementation of the approved FBR reforms plan. A separate implementation committee has already been notified three days ago under the chairmanship of the finance minister.
Sharif’s decision to chair the steering committee underscores the priority he attaches to bringing reforms to a system that, according to former Finance Minister Dr Shamshad Akhtar, causes trillions of rupees less revenue collection annually.
Economic indicators enhance on $3bn IMF SBA
Pakistan’s economic indicators have significantly improved under the ongoing International Monetary Fund (IMF) Stand-By Arrangement (SBA) of $3 billion, suggesting that economic activities have stabilised and are ready to enter a growth phase ahead of the new loan package from the lender.
In its latest monthly update released on Thursday, Topline Research reported that the country’s key economic indicators, including the current account deficit (CAD), debt and liabilities, foreign exchange reserves, inflation reading, and rupee-dollar parity, improved in February 2024.
The report stated that Pakistan’s balance of the current account turned positive in February 2024, settling at a surplus of $128 million for the month compared to a deficit of $303 million in the previous month, January 2024.
Pakistan, Asian Development Bank discuss uplift initiatives
Pakistan and the Asian Development Bank (ADB) on Thursday discussed ongoing collaboration between the two sides in diverse areas and the future initiatives to be undertaken for economic development in the country that needs to progress rapidly to prop up the weakening economy and create jobs for the bulging workforce.
ADB Country Director Young Ye met Minister of Finance and Revenue Muhammad Aurangzeb at the Finance Division where cooperation and future measures came up for discussion.
The country director congratulated the finance minister for reaching a staff-level agreement with the IMF-SBA under the $3 billion and stated that the market had positively responded to the development.
This agreement will lead to the release of the last loan tranche of $1.1 billion for Pakistan in March or April, following approval from the IMF’s executive board.
Foreign loans stay low at $9.5bn
Pakistan received foreign loans of less than $9.5 billion during the first eight months of the current fiscal year and also faced problems in securing fresh loans from its two largest multilateral lenders.
Overall disbursements from foreign creditors slowed down during the July-February period of the current fiscal year despite Pakistan having the umbrella of the International Monetary Fund (IMF). The government received only $318 million from foreign lenders in February.
The Economic Affairs Division on Thursday reported the latest disbursement figures. The data reported by the economic affairs ministry and the central bank showed that Pakistan secured nearly $9.5 billion in foreign loans during the first eight months of the current fiscal year.
Sparc suggests additional tax on cigarette
The Society for the Protection of the Rights of the Child (SPARC) warmly welcomed the appointment of the new finance minister and urged him to consider tobacco taxation as a potential avenue for boosting the economy.
Aligning with public health initiatives, the SPARC emphasised the importance of increasing taxes on cigarettes to reduce tobacco consumption, thus promoting better health outcomes for the population, according to a press release.
The SPARC shared the concerns of health activists who advocate for higher taxes on cigarettes rather than utilities. This strategic approach not only aligns with public health goals but also addresses the broader economic implications associated with tobacco use.