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Express Tribune
16 hours ago
- Business
- Express Tribune
Elite clubs come under tax ambit
Listen to article The government's plan to ban economic transactions by ineligible persons from the start of new fiscal year has faced a setback, as a National Assembly panel found the online portal being developed to determine the eligibility criteria for carrying economic transactions was far from the finishing line. National Assembly Standing Committee on Finance Chairman Syed Naveed Qamar gave his critical post-review assessment on Friday after reviewing the government's much-trumpeted plan to catch tax evaders. The committee, nonetheless, supported the government's proposal to impose income tax on the earnings of elite recreational clubs, like Islamabad Club and Guns and Country Club that charge more than Rs1 million membership fees. Work on the online platform is far from the finishing line, said Naveed Qamar, a day after he and other committee members took a briefing of the new system in a visit to the Federal Board of Revenue headquarter. The statement made by the chairman after reviewing the system shows that FBR has failed to develop a credible online system. The government has proposed to ban economic transactions by those whose assets and wealth statements do not support buying a plot, a car, invest in securities or maintaining bank accounts. The committee had linked the approval of the powers with the FBR's ability to develop a system that is free from the exploitation of the taxpayers. The FBR had earlier promised to develop this system by April this year. The FBR's briefing showed that it was merely a prototype system that cannot be described fully functional and does not have the ability to achieve the intended purposes, said Usama Mela, the member of the standing committee and the PTI MNA. In his post-budget press conference, Finance Minister Muhammad Aurangzeb had warned that if the Parliament did not approve the proposed amendments, the government may have to impose Rs400 billion to Rs500 billion in new tax measures. But his organization has not developed a trustworthy system. There is still a chance that the National Assembly committee will approve these amendments but their enforcement will be linked with the development of a credible online platform. The new system determining the eligibility criteria of taxpayers to undertake economic transactions would not be enforced from July 1st, the Chairman FBR Rashid Langrial told the standing committee. He further explained that the current system will continue until a new system is put in place. The government has already proposed in the law that these new conditions will take effect after the approval of the federal government. The chairman of the standing committee proposed that initially the FBR should apply the new system to a set of taxpayers instead of fully rolling it out. The chairman FBR agreed to the recommendation. The government has proposed that only those people can buy cars, plots, invest in securities who have sufficient declared white legal resources to buy these assets and maintain bank accounts According to the bill, the ineligible persons would not be allowed to withdraw cash from their bank accounts beyond a certain limit. However, it gives certain relaxations to them, including the freedom to procure up to 800cc vehicles, buses, trucks and tractors and invest in shares up to a certain limit. The new system was conceived by Rashid Langrial in order to collect due taxes from people, either filers or non-filers. An eligible person can make major purchases of up to 130% of the value of cash and assets, declared in his last tax return and the wealth statement or he can justify any new source. Recreational Clubs The FBR informed the standing committee about an amendment in the law to capture the incomes of the elite clubs, which are exempted from paying income tax. The government has proposed to exclude these recreational clubs charging over Rs1 million for the membership fee from the purview of the non-profitable organizations. The Islamabad Club is very much coming in the tax net, said Muhammad Aurangzeb. The club had been built as a recreational facility for the bureaucrats and diplomats. Over the years, its fee was exorbitantly increased to many millions of rupees. Its membership is being offered to only the richest or the influential people, denying others from availing facilities being built on the state land. The standing committee also rejected a government budget proposal of indirectly charging income tax from the farmers despite their income cannot be taxed by the federal government.
Business Recorder
13-06-2025
- Business
- Business Recorder
Aurangzeb tells Senate body: Govt eyes $2bn loan to boost reserves
ISLAMABAD: Amid expectation of borrowing $2 billion from commercial banks to shore up reserves to $14 billion by the end of outgoing fiscal year, the government only managed to utilise around 40 percent of the development funds of Rs1.1 trillion revised budget allocation for the outgoing fiscal so far. This was revealed by Finance Ministry while briefing the National Assembly Standing Committee on Finance and Revenue, which was also informed that government has proposed special relief allowance @50 percent to officers and 20 percent to JCOs/soldiers of armed forces in the budget 2025-26. The committee which met with Syed Naveed Qamar in the chair here on Thursday was also informed by the Finance Minister that from their perspective there is cushion to do more on the policy rate and hopeful that by end of calendar year, it would move to single digit as move forward. Post-budget presser: 'Have to get money from somewhere to provide relief somewhere', says Auranzgeb The briefing also revealed that Public Sector Development Programme (PSDP) has been revised downward for the second time in the outgoing fiscal year from Rs1.1 trillion to Rs967 billion, but it would also not be achieved, as confirmed by the Secretary Finance. Secretary Finance informed the committee that Rs662 billion under the PSDP has so far been utilised, which according to PTI leader and member committee Omar Ayub Khan was given a steroid injection in the last month and may have consequences on the overall economic indicators including GDP growth in the outgoing fiscal year. The lack of spending suggests a large part of PSDP — revised down from Rs1.4 trillion to Rs1.1trillion would remain unspent at the end of the fiscal year in June. The finance minister said that as far as inflows are concerned things are speed up in the last quarter. 'We have gone back to the commercial market in this fiscal year and are in the process of syndicating around $2 billion of commercial borrowing and expecting to shore up reveres from the current around $11-12 billion to $14 billion by end of the current fiscal year. Secretary Finance further said that non-tax revenue udder the head of State Bank of Pakistan (SBP) profit is budgeted at Rs2,400 billion for the next fiscal year down from Rs2,500 billion in the current fiscal year on the back of decrease in interest rate. The committee was skeptic about Rs105 billion budgeted from the Captive Power Plants (CPP) levy for the next fiscal year. Regarding the Petroleum Development Levey (PDL) Secretary Finance said that Rs1,468 billion are budgeted for the next fiscal year against Rs1,281 billion in the outgoing fiscal year. He said that there is no upper cap for PDL; however, after the addition of Rs2.5 per litre carbon levy, the government wants to restrict it to around Rs80-80.5 per litre. Omar Ayub Khan said that petroleum products of 2.1 billion worth Rs550 billion are smuggled, causing the national exchequer around Rs145 billion under the head of non-collection of PDL, where the Federal Board of Revenue (FBR) needs to strengthen enforcement. Secretary Finance informed that financing of federal deficit is budgeted for 2025-26 at Rs6,501 billion against the budgeted Rs8,500 billion for the outgoing fiscal year. External financing (net) is estimated at Rs106 billion for the next fiscal year compared to Rs666 billion for the current fiscal year. Further, domestic financing (net) is estimated at Rs6,308 billion for the next fiscal year compared to Rs7,804 billion for the current fiscal year. The finance minister stated that there were fake rumors in media of mini budget which became wrong. He informed the committee on fiscal discipline, economic growth and stability, social welfare and public services like relief for salaried class with reduction in the minimum tax rate and expansion in the Benazir Income Support Program (BISP) to Rs716 billion. The Minister of State and Secretary Finance briefed the Committee on policy measures adopted for the preparation of the Finance Bill 2025 and the government's financial proposals for the next financial year. The committee members expressed concerns to the tax-to-GDP ratio, revenue shortfall, taxes on solar panels, hybrid vehicles, carbon levy, petroleum levy, private sector lending and debt, SMEs, industrial and agricultural growth and targets, withholding tax (WHT) on ATMs and bank deposits, pensions, gender-specific allocations, health-specific allocations, electric vehicles, structural reforms, sales tax on cotton, public sector expenditure, defence spending, the widening current account deficit, and the negative growth rates observed in both the manufacturing and agricultural sectors. The discussion also highlighted the challenges of climate change and the need for social protection. The members expressed serious concerns regarding the inefficiency of Customs Intelligence and smuggling at borders. The chairman emphasised the importance of keeping the committee fully informed and desired that a comprehensive overview of both the structural reforms and the tariff reforms be prepared and shared with the committee members. The minister said that only Rs312 billion is budgeted from new taxes. He said that while international stakeholders had previously doubted Pakistan's ability to implement tax laws effectively, the government has now demonstrated that meaningful enforcement is possible. Talking about the tariff rationalisation which the committee was informed that it was a step aligning Pakistan's trade and industrial policy with global standards. The initiative marks the beginning of a phased plan towards a simplified tariff regime, ultimately targeting an average tariff rate of just over four per cent. 'Overall, there are 7,000 tariff lines. Additional customs duty has been removed on 4,000 lines, and in 2,700 of those, the customs duty has also been reduced,' the committee was informed. Of these, around 2,000 tariff lines are directly linked to raw materials and intermediary goods used by the exporters. The government's broader goal, according to Aurangzeb, is to reshape Pakistan's tariff architecture in a way that supports industrial growth and integrates the economy more deeply into global supply chains. Aurangzeb said an additional tax on fertilisers and pesticides was a benchmark but it was negotiated with the IMF on the directions of Prime Minister Shehbaz Sharif as it was a critical input into agriculture and should not be imposed. Secretary Finance said a modest 1.9 percent rise in government expenditure, crediting prudent financial management. He said, despite inflation, the government managed to contain subsidies and reduce debt servicing, while selectively increasing spending where necessary for national priorities. He further informed that Rs494 billion were allocated for tariff differential subsidy (TDS) in the budget 2025-26. Replying to a question the committee was informed that the government has budgeted Rs87 billion from privatisation admitting that Rs30 billion budgeted for the current fiscal year was not materialized on account of lower bids for PIA and Islamabad International Airport. The committee was informed that privatisation of Pakistan International Airlines (PIA) and the Roosevelt Hotel is scheduled for the next fiscal year, and privatization efforts for power distribution companies (DISCOs) and generation companies (GENCOs) will continue. The government has set inflation target of 7.5 percent for the next fiscal year. Regarding the fiscal deficit, the government projected a target of 3.9 percent of the GDP — or Rs5,037 billion — from the outgoing fiscal year's target of 5.9 percent. The primary surplus is targeted at 2.4 percent of the GDP against the budgeted two percent in the current fiscal, which has been revised to 2.2 percent. The government has set tax collection target for the FBR at Rs14,131 billion, an 8.95 percent increase from the current fiscal year of Rs12,970 billion and around 19 percent higher than the revised estimate of Rs11,900 billion. Non-tax revenue is estimated to be Rs5,147 billion for the next fiscal year against the budgeted Rs4,845 billion for the current fiscal year. Copyright Business Recorder, 2025
Miami Herald
04-06-2025
- Business
- Miami Herald
Vietnam Ends Two-Child Policy to Tackle Falling Birth Rates
Vietnam has abolished its long-standing two-child policy to tackle concerns about declining birth and fertility rates. The National Assembly Standing Committee approved a new regulation lifting the restriction, permitting couples to freely choose the timing, number, and spacing of their children on Tuesday, state media reports. The fertility rate in Vietnam, Southeast Asia's third-most-populous nation, has fallen to 1.91 births per woman in 2024, according to the Vietnam General Statistics Office. This is well below the replacement threshold of 2.1 needed to maintain the population size. Vietnam introduced its two-child policy in 1988 to curb rapid population growth, when the average woman had more than four children. The law restricted most families to one or two children, with exceptions in special cases. Enforcement was stricter for Communist Party members, who faced penalties including warnings, reduced bonuses, or dismissal from positions for violations. Vietnam's decision to scrap its two-child policy followed a steady decrease in birth rates since 2022, when the fertility rate dropped to 2.01 and declined again to 1.93 in 2023. Health officials have expressed concern that the nation's population of nearly 100 million may begin to contract by mid-century. Authorities have also cited gender imbalances and the ongoing shift toward a "super-aged society," with projections that over 20 percent of Vietnamese will be age 65 or older by 2049. Under the new regulation, all families-regardless of Party membership-can now choose freely how many children to have and when. Vietnam's policy shift aligns with recent moves in other Asian countries also experiencing plunging fertility rates and rapid aging. China saw a slight uptick in its birth rate in 2024, attributed mainly to cultural factors such as the Year of the Dragon, despite wide-ranging pro-natal measures and the end of restrictive family policies. Meanwhile, the country's overall population has continued to shrink for the third consecutive year. Japan, facing a decades-long population decline and with nearly 30 percent of its population over age 65, is preparing to make childbirth free as early as April 2026. The Japanese government proposes that public health insurance cover all delivery costs nationwide, attempting to alleviate financial burdens on families. The United Nations Population Fund says: "Vietnam is in the period of population aging. The process of population aging is progressing rapidly, caused by mortality and fertility declines, and life expectancy at birth increase and that transition from an 'aging' to an 'aged' population will occur within just 20 years." The Vietnamese Ministry of Health is expected to submit a new population law to the National Assembly in 2025, aimed at sustaining fertility rates near replacement level while monitoring the ongoing demographic transition and the effects of the relaxed family planning rules. Related Articles Trump Business Booms Abroad Amid Ethics QuestionsUS Warship Challenged Beijing's South China Sea Claims, Navy SaysFull List of Trump's Foreign Real Estate Ventures Underway Around the WorldVideo Shows Moment Emmanuel Macron Pushed in Face by Wife 2025 NEWSWEEK DIGITAL LLC.
Newsweek
04-06-2025
- Business
- Newsweek
Vietnam Ends Two-Child Policy to Tackle Falling Birth Rates
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Vietnam has abolished its long-standing two-child policy to tackle concerns about declining birth and fertility rates. The National Assembly Standing Committee approved a new regulation lifting the restriction, permitting couples to freely choose the timing, number, and spacing of their children on Tuesday, state media reports. Why It Matters The fertility rate in Vietnam, Southeast Asia's third-most-populous nation, has fallen to 1.91 births per woman in 2024, according to the Vietnam General Statistics Office. This is well below the replacement threshold of 2.1 needed to maintain the population size. Vietnam's Two-Child Policy: Origins and Purpose Vietnam introduced its two-child policy in 1988 to curb rapid population growth, when the average woman had more than four children. The law restricted most families to one or two children, with exceptions in special cases. Enforcement was stricter for Communist Party members, who faced penalties including warnings, reduced bonuses, or dismissal from positions for violations. What To Know Vietnam's decision to scrap its two-child policy followed a steady decrease in birth rates since 2022, when the fertility rate dropped to 2.01 and declined again to 1.93 in 2023. Health officials have expressed concern that the nation's population of nearly 100 million may begin to contract by mid-century. Authorities have also cited gender imbalances and the ongoing shift toward a "super-aged society," with projections that over 20 percent of Vietnamese will be age 65 or older by 2049. Under the new regulation, all families—regardless of Party membership—can now choose freely how many children to have and when. Vietnam's policy shift aligns with recent moves in other Asian countries also experiencing plunging fertility rates and rapid aging. A billboard campaigning for each family to have two children in an effort to improve the birth rate stands along the street in Ho Chi Minh City, Vietnam, Jan. 14, 2024. A billboard campaigning for each family to have two children in an effort to improve the birth rate stands along the street in Ho Chi Minh City, Vietnam, Jan. 14, 2024. AP China saw a slight uptick in its birth rate in 2024, attributed mainly to cultural factors such as the Year of the Dragon, despite wide-ranging pro-natal measures and the end of restrictive family policies. Meanwhile, the country's overall population has continued to shrink for the third consecutive year. Japan, facing a decades-long population decline and with nearly 30 percent of its population over age 65, is preparing to make childbirth free as early as April 2026. The Japanese government proposes that public health insurance cover all delivery costs nationwide, attempting to alleviate financial burdens on families. What People Are Saying The United Nations Population Fund says: "Vietnam is in the period of population aging. The process of population aging is progressing rapidly, caused by mortality and fertility declines, and life expectancy at birth increase and that transition from an 'aging' to an 'aged' population will occur within just 20 years." What Happens Next The Vietnamese Ministry of Health is expected to submit a new population law to the National Assembly in 2025, aimed at sustaining fertility rates near replacement level while monitoring the ongoing demographic transition and the effects of the relaxed family planning rules.
Express Tribune
04-06-2025
- Business
- Express Tribune
Vietnam ends two-child limit as birth rate plummets
Listen to article Vietnam has officially ended a decades-old policy restricting families to no more than two children, state media said on Wednesday, as the country struggles with a rapidly declining birth rate and an ageing population. The regulation, first introduced in 1988, will no longer apply, with family size now left to the discretion of couples, according to the Vietnam News Agency. The change was approved by the National Assembly Standing Committee in Hanoi on Tuesday. The shift follows alarming demographic trends. In December, the country's total fertility rate dropped to a record low of 1.91 children per woman. That marks the third consecutive year the rate has fallen below the replacement level of 2.1. Vietnam's fertility rate stood at 2.11 in 2021 before slipping to 2.01 in 2022 and 1.96 in 2023, the Ministry of Health reported. Falling birth rates are particularly stark in major cities such as Hanoi and Ho Chi Minh City, where urbanisation and rising living costs have made parenting less financially feasible. 'Even though I am Asian, with social norms that say women need to get married and have kids, it's too costly to raise a child,' said 22-year-old office worker Tran Minh Huong. She said the policy change made no difference to her plans. Under the previous rules, most families were limited to one or two children, with exceptions granted in special cases. While enforcement was inconsistent, Communist Party members who violated the policy risked penalties, including demotions or dismissal. Deputy Health Minister Nguyen Thi Lien Huong recently warned that despite policy shifts and public awareness campaigns, it remains difficult to persuade families to have more children. She cited concerns about long-term socio-economic development, including labour shortages and population ageing. Vietnam is also grappling with a persistent gender imbalance. The health ministry on Tuesday proposed tripling the fine for foetal sex selection to US$3,800 to deter the practice. Although the gender ratio has improved, it remains skewed at 112 boys for every 100 girls. Hoang Thi Oanh, 45, who has three children, said she received reduced benefits for her youngest due to the old policy. 'It's good that at last the authorities removed this ban,' she said, but added that the cost of raising children remains a major barrier. Experts say that without significant support measures such as financial incentives, Vietnam may follow the same path as China. Beijing ended its one-child policy in 2016 and began allowing three-child families in 2021, yet birth rates have continued to fall amid economic pressures. The United Nations Population Fund warned that Vietnam is 'in the period of population ageing' and predicted it will become an 'aged society' within two decades.
