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Time of India
20 hours ago
- Business
- Time of India
CM Orders Gadchiroli Airport Survey, Pushes For Timely Land Acquisition
Nagpur: Chief minister Devendra Fadnavis on Thursday ordered an immediate obstacle limitation surface (OLS) survey for the proposed Gadchiroli airport, directing the district collector to submit a detailed proposal. The instruction came during a high-level review meeting on land acquisition for major infrastructure projects, held in Mumbai. Fadnavis further instructed the runway at Akola Airport to be extended to 2,400m apart from envisioning a modern, large-scale terminal for the city. He emphasised the need for comprehensive planning for air connectivity in Kolhapur, Karad, Akola, Gadchiroli, and Chhatrapati Sambhajinagar. Stressing the need for strict adherence to timelines, Fadnavis said, "No project should stall due to land acquisition delays. All agencies must work in mission mode with quality and structured coordination." He cautioned that delays lead to steep cost escalations and insisted that each agency follow the pre-defined schedule meticulously. Fadnavis also reviewed the progress of multiple critical projects, including the Nagpur-Gondia, Nagpur-Chandrapur, and Bhandara-Gadchiroli expressways, directing officials to finalise their alignment using the Gati Shakti portal to ensure minimal forest land diversion. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 2 & 3 BHK Homes Near Padur, OMR Starting @ ₹72.50 Lakh* TVS Emerald Undo For the Wardha-Gadchiroli and Wardha-Nanded railway lines, the CM set a 15-day deadline to complete land acquisition. Fadnavis further instructed that the Virar-Alibaug corridor's Morbe-Karanja section, which passes through mangrove and forest zones, should begin its approval processes immediately, and that administrative clearances should proceed simultaneously to save time. He also asked the finance department to allocate Rs12,000 crore for land acquisition of the Shaktipeeth Expressway. Other directives included submission of a proposal to integrate the Wadhwan-Igatpuri expressway under the Sagarmala scheme, and completion of the Selu land acquisition in Parbhani district for the Jalna-Nanded expressway within 15 days. The CM also called for provision of Rs53,354 crore for land acquisition related to 11 major infrastructure projects across the state. Top bureaucrats present included Revenue ACS Rajesh Kumar, PWD ACS Manisha Mhaiskar, Forest ACS Milind Mhaiskar, Transport and Ports ACS Sanjay Sethi, Finance ACS OP Gupta, Urban Development ACS Aseemkumar Gupta, and MSRDC MD Anil Gaikwad.
Express Tribune
2 days ago
- Business
- Express Tribune
Senate panel rejects tax on online businesses
The Senate Standing Committee on Finance reviewed the Finance Bill 2025 on Wednesday and recommended a zero-rated tax on the income of up to Rs1.2 million and rejected a proposal to impose tax on individuals doing small online businesses. During a meeting, chaired by its chairman Saleem Mandviwala, the committee approved the proposal to impose tax on the income of online academies and teachers but opposed the levy of tax on the income of the Islamabad Club. Federal Board of Revenue (FBR) officials informed the meeting that teachers were providing online digital education services, earning Rs20-30 million. They added that a new clause had been introduced in the Finance Bill to impose tax on those doing e-commerce business, using online marketplaces. All individuals providing services via the internet and electronic networks will be affected, FBR officials said. They added that the tax will also apply to music, audio and video streaming platforms, cloud services, online software application providers, telemedicine and e-learning services. The tax would also be imposed on online banking services, architectural design services, research and consultancy reports, accounting services and other online facilities in the form of digital files, the FBR officials stated. The committee rejected a proposal to tax individuals doing small online businesses. The FBR chairman said that those with an annual income of 1.2 million will have to pay Rs12,500 in taxes. Committee member Senator Shibli Faraz said that there should be no tax on the income of Rs600,000 to Rs1.2 million. FBR Chairman Rashid Langrial told the committee that it had been decided to collect tax from entertainment clubs, including the Islamabad Club. However, the committee chair opposed the move. Langrial said that the common man did not benefit from this club, as it was the luxury of 300 people. The FBR officials said that there was a proposal to impose restrictions on the purchase of property and vehicles by non-filers. They added that a limit of 130% of the income had been set for the purchase of property by the non-filers. Senator Mohsin Aziz said that the limit of 130% for the purchase of property by non-filers should be increased. The committee recommended increasing the limit to 500%. Finance Minister Muhammad Aurangzeb said that steps were being taken to bring non-filers into the tax net.
Business Recorder
2 days ago
- Business
- Business Recorder
Between optics and austerity
Pakistan's economic policies resemble a car with two drivers, each pulling the wheel in opposite directions. One foot accelerates through aggressive fiscal spending; the other jams the brakes via tight monetary policy. This conflicting approach makes genuine economic progress nearly impossible. Consider the recent policy stance of the State Bank of Pakistan (SBP). For most of fiscal year 2024–25, the SBP held interest rates at a punishing 22 percent, aiming to tame inflation. As inflation rates began to decline from over 22 percent in June 2024 to around 15 percent in November 2024, the central bank still kept rates high. According to the latest Pakistan Economic Survey 2024–25, by the fiscal year-end, inflation settled remarkably lower at 4.6 percent, validating the case for a timely rate cut. In 2025, rates were gradually reduced to 11 percent, following a final 100 basis points cut in May. This delayed monetary adjustment came with a heavy cost: interest payments soared to Rs7.764 trillion over the full year, consuming the largest share of current expenditures and crowding out space for development-oriented initiatives. Since most government securities were on floating rates, earlier relaxation of the monetary stance could have sharply reduced this burden. Such heavy borrowing costs inevitably restricted the government's budgetary room for essential public investment. The IMF has repeatedly flagged that prolonged high interest rates, while slowing inflation, also compound the fiscal burden by inflating domestic debt service costs, creating a self-defeating loop for developing economies. Pakistan's own data reflects this policy mismatch, as the IMF noted that real GDP growth in the first two quarters of FY2024–25 remained subdued—1.3 percent and 1.7 percent—despite easing headline inflation. The Economic Survey confirms the full-year GDP growth eventually stood at 2.7 percent, highlighting the missed opportunity for higher growth had the central bank pivoted sooner. At the same time, fiscal authorities projected ambitious numbers. Gross revenue receipts for FY2024–25 were budgeted at Rs17,815 billion, with Rs12,970 billion targeted from FBR taxes. However, the Pakistan Economic Survey 2024–25 revealed that the FBR collected a total of Rs10.23 trillion, falling short by a staggering Rs1.03 trillion—roughly 8 percent below target. This shortfall was concentrated in sales tax and customs duties, which underperformed due to import compression and disinflation, eroding the tax base. Sales tax collections suffered as inflation cooled and domestic consumption slowed, while customs duties fell alongside declining import volumes. In contrast, income taxes showed relative resilience, primarily because they were collected at source — via employer deductions and AWT through telecom providers — rather than through voluntary compliance. To compensate for the gap, the government leaned heavily on non-tax revenues, particularly the extraordinary SBP profits of Rs2.5 trillion (midyear figure). But these profits are tied to high interest rates and will shrink drastically as the central bank lowers rates, making them an unreliable pillar for future fiscal planning. Moreover, these profits are not 'earned' in a conventional sense; they represent accounting transfers derived largely from interest paid by the government itself to the SBP on its own borrowing, which distorts the true fiscal picture rather than strengthening it. Despite these revenue struggles, however, the government showcased a strong primary surplus—officially Rs3,604 billion (2.9 percent of GDP) by December 2024, although the IMF's adjusted calculations placed it at Rs2,264 billion (2.0 percent of GDP), discounting one-off SBP profits. At first glance, this signaled fiscal prudence, but it came at the expense of critical long-term investment. By year-end, actual federal PSDP disbursements stood at just Rs564.5 billion out of a Rs950 billion revised allocation, reflecting continued underutilization. arlier in the year, only Rs296 billion had been spent by December, with verified SAP system disbursements even lower at Rs145.4 billion. According to the Pakistan Economic Survey, despite announcing an ambitious Rs4.224 trillion development budget for FY2025–26 (including both federal and provincial components), actual public development outlays in FY2024–25 fell short at Rs3.483 trillion, raising doubts about realistic planning. This sharp underutilization reflects a broader pattern: when budgetary room tightens, investment is the first casualty, regardless of stated priorities. Even the IMF acknowledged in its Article IV consultations that the surplus has been achieved primarily through expenditure compression—especially in public infrastructure spending—rather than through structural revenue improvements. It also highlighted that while headline inflation had eased to 0.3% month-on-month by April 2025, core inflation persisted at 9%, reflecting stubborn price pressures in non-volatile categories. Another silent drain on the economy often overlooked is the cost of managing a high-cash economy. During July–March FY2024–25, currency in circulation rose by Rs1,108 billion. This rising demand for cash reflects limited financial inclusion and forces the government to service liquidity needs at high borrowing costs, adding another layer of fiscal inefficiency. Simultaneously, regressive taxation persists, such as advance income tax deductions on mobile phone top-ups, disproportionately affecting the lower-income population. Defense spending, projected to rise by 12.2 percent to Rs2.4 trillion in the FY2025–26 budget by the IMF, reflects the security imperatives of a region marked by persistent tensions. While national defence remains non-negotiable — especially amid the ongoing security challenges posed by recent tensions with India — it reinforces the urgency of making what remains of the fiscal envelope count, particularly for social protection and growth-oriented projects. With 110 million citizens living below the poverty line, the challenge lies in balancing essential defence spending with meaningful investment in human capital. In recent developments, the National Economic Council (NEC) approved the Annual Development Plan for FY2025–26, allocating Rs4.224 trillion for development projects—Rs1 trillion earmarked for federal schemes and Rs2.869 trillion for provincial initiatives. The ambitious Rs4 trillion-plus allocation underscores the government's renewed commitment to key sectors like health, education, infrastructure, and housing. However, credibility remains in doubt. For FY2024–25, the federal PSDP was originally set at Rs1.4 trillion but was later revised downward to Rs1.1 trillion. As of May 2025, only Rs596 billion had actually been utilized—a staggering shortfall of over Rs800 billion. This underuse not only reflects fiscal constraints and delayed releases due to IMF-agreed targets, but also exposes the limited absorption capacity of ministries. The gap between announced intentions and actual execution continues to widen, reinforcing skepticism about whether the new targets represent genuine developmental intent or political optics. This pattern highlights a persistent policy disconnect: debt servicing, inflated by high interest rates, forces cuts in long-term investment. Capital spending, meant to boost sustainable growth, becomes the first casualty in a budget strained by security needs and costly borrowing. Compounding the challenge, total government debt surged by Rs6 trillion in the first ten months of FY2024–25, reaching Rs74.936 trillion due to increased borrowing amid revenue gaps. Externally, the economic picture shows paradoxical stability. According to the Economic Survey, Pakistan's current account surplus stood at $1.9 billion from July–April FY2024–25, largely due to a robust 30.9 percent surge in remittances. Foreign exchange reserves improved to $16.64 billion by May 27, exceeding IMF targets, and the exchange rate premium narrowed significantly. Meanwhile, one critical missing link is subnational fiscal performance. Provincial governments must urgently broaden their tax base—particularly through better collection of sales tax on services, property tax, and agriculture income tax. These are constitutionally devolved responsibilities, yet provincial revenue performance remains abysmal, with excessive reliance on federal transfers. Without a meaningful push to mobilize own-source revenues at the provincial level, the burden will continue falling on a narrow federal tax base already stretched to the limit. This disconnect between external calm and internal dysfunction only emphasizes the core incoherence: while monetary policy was stuck in overcorrection, fiscal management was running on promises and patchwork. Had the SBP lowered rates sooner, debt servicing costs would not have consumed half the fiscal oxygen. Had tax targets been met, they would have equaled nearly $3 billion—roughly matching a full year's IMF disbursement under the Extended Fund Facility. Instead, Pakistan finds itself spending more to service past borrowing, all while cutting the very investments that could fuel future growth. To escape this policy gridlock, Pakistan must replace its economic tug-of-war with synchronized steering. Fiscal discipline must mean more than cosmetic primary surpluses built on cuts to growth-oriented spending. Monetary policy must respond dynamically; taking into account inflation and the broader fiscal context. Tax reform must go deeper than administrative tweaks. And capital investment must stop being treated as optional. If both drivers can agree on a common direction—growth through coordination—there is still time to turn the wheel. But without that alignment, the vehicle will keep swerving off course, stuck in a loop of conflict, correction, and chronic stagnation. Copyright Business Recorder, 2025
Business Recorder
2 days ago
- Business
- Business Recorder
FBR proposes tax on online academies, recreational clubs
ISLAMABAD: The Federal Board of Revenue (FBR) has proposed to impose tax on the income of online academies and teachers, those using online marketplaces in e-commerce business, as well as to collect income tax from recreational clubs including Islamabad Club. The Senate Standing Committee on Finance and Revenue, chaired by Saleem Mandviwalla, held its sixth consecutive session on Wednesday, where 'Income Tax' provisions of the Finance Bill 2025-26 were discussed. The Committee was briefed on the tax reductions provided to salaried class under various slabs. The FBR chairman stated that the tax on the salaried class has been significantly reduced. The committee was informed that tax on salaried class coming under the tax slab (Rs600,000- 1200,000) annual income was reduced from five percent to 2.5 percent. He said that those with an annual income of Rs1.2 million will have to pay Rs12,500 in tax throughout the year, and the surcharge on income of more than Rs10 million has been reduced from 10 percent to nine percent. The committee recommended that the individuals earning monthly income of one lac should be exempted from the tax. The FBR officials, while giving a briefing, said that in the budget it has been decided to impose tax on the income of online academies and teachers. Teachers across the country are providing online digital education services. Tutor academies are earning Rs20 million to 30 million. A new clause 17C has been introduced in the Finance Bill 2025. Under the same measure, e-commerce businesses that operate via online marketplaces will also face new tax obligations, as authorities seek to broaden the tax base in the rapidly growing digital sector. The committee was further informed that it has been proposed to collect tax from entertainment clubs including Islamabad Club. In the Finance Bill 2025-26, income tax has been introduced on recreational clubs which were previously exempted from tax. State Minister for Finance and Revenue, Bilal Azhar Kayani, stated that the recreational clubs are liable to pay tax, where their income exceeds the expenditure, and such steps have been taken to broaden the tax net of the country. The Senate Standing Committee on Finance opposed the imposition of tax on the income of Islamabad Club and recommended tax exemption on annual income of Rs1.2 million, while the proposal of tax on small individuals doing online business was rejected. Discussing the newly introduced tax on e-commerce, the committee commented that the FBR should imposed tax on goods rather than services. Committee members recommended for removing Section 7E and equalise the tax rate for property seller and buyers. However, FBR told the committee that 7 E cannot be waived off as it has been agreed upon with the International Monetary Fund (IMF). The committee also expressed reservations over freezing bank accounts on notices by FBR. Federal Minister for Finance and Revenue also highlighted the newly introduced mortgage facility. He stated that mortgage will be available for houses up to 2,000 sq feet, and the individuals will also be eligible for tax credit not exceeding 30 per cent of total income. Commenting on the FBR's new move of disallowing 10 per cent in case of purchases from non-registered suppliers, the committee opined that such move will discourage competitive markets, as the number of registered suppliers is nominal across the country. The committee also expressed concerns over the newly-inserted clause, which restricts the 'Eligible Person' from making any purchase exceeding 130 per cent of wealth reflected in his/ her last year's statement. The committee recommended that such threshold should be exceeded to 400 per cent of previous year's statement. In attendance were Senators Syed Shibli Faraz, Mohsin Aziz, Fesal Vawda, Anusha Rahman Ahmad Khan, Muhammad Abdul Qadir, Ahmed Khan, Shahzaib Durrani, and Federal Minister for Finance and Revenue Muhammad Aurangzeb, State Minister for Finance and Revenue Bilal Azhar Kayani, FBR Chairman Rashid Mahmood Langrial and other senior officials of relevant departments. Copyright Business Recorder, 2025
Express Tribune
2 days ago
- Business
- Express Tribune
Agri-budget fails to match damage
Listen to article Agricultural experts and farmer representatives have urged both federal and provincial governments to implement immediate and concrete measures to rescue Pakistan's struggling farming sector. Among the proposed measures are the establishment of an Agriculture Commodities Price Commission (ACPC) to guarantee farmers a minimum 25% return on investment, the formation of an Agriculture Export Authority (AEA) to stabilise local prices and boost exports, abolishment of the 18% GST on seed cotton, removal of GST on tractors and implements, and the setting of a uniform electricity tariff of Rs10 per unit for irrigation tube-wells. Representatives said recent data reveals the sector is in freefall, while provincial budget allocations have been widely condemned as grossly inadequate. The scale of the crisis is staggering. Pakistan's agricultural sector contracted by 5.84% in just one year. Major crop production shrank by over 13%, with wheat production dropping 8.91% to 28.98 million tonnes in 2025. Farmers have endured massive cumulative losses of Rs2,200 billion on wheat alone between May 2024 and May 2025. Cotton production fell to 5.55 million bales — 50% below target and 34% lower than last year — forcing a projected import bill of $4.45 billion, a 178% increase that severely strains foreign reserves. Maize production declined by 15.4%, and sugarcane fell to 84.24 million tonnes from 87.64 million tonnes. The collapse extends beyond production. Agricultural export performance also deteriorated alarmingly in 2024-25. Maize exports dropped 86% to just $58.9 million. Rice exports fell 15% to $3.3 billion. Onion exports dropped 48%, mangoes by 16%, and potatoes by nearly 4%. The downturn reflects deeper structural issues, including declining productivity and a critical lack of support for export infrastructure, quality control, and supply chainsthreatening Pakistan's trade balance and economic stability. In this context, the Punjab government's 2025-26 budget allocation of Rs129.8 billion for agriculture — only Rs12 billion (10.75%) more than last year's Rs117.2 billion — has been met with disbelief and anger. Farmer leaders argue this token increment fails to address a crisis involving multi-trillion-rupee losses. "Allocating only Rs129.8 billion for agriculture in the face of Rs2,200 billion in wheat losses alone is not just inadequate — it's an insult to the farming community," said Khalid Khokhar, President of the Pakistan Kissan Ittehad. "It demonstrates a complete failure to grasp the existential threat facing our food security and rural economy. This budget offers Band-Aids for bullet wounds." Adding to the frustration is the Punjab government's proposal to tax agricultural income by aligning tax slabs with those for established businesses. Critics see this move as dangerously disconnected from the realities on the ground. Small and medium-scale farmers, already reeling from plummeting commodity prices, crop failures, climate stress, and water shortages, view the measure as an unbearable additional burden. "How can they even think of taxing us now?" asked Muhammad Aslam, a wheat and cotton grower from Bahawalpur. "Last year's wheat crop drowned me in debt, cotton failed, and now maize prices have crashed. I sold my wife's jewellery just to buy seeds and urea for the next season." Agricultural economist Dr Fahd Ali described the proposal to tax agricultural income amid this unprecedented financial haemorrhage in the farming sector as "economically illiterate and socially risky." He said it ignores the inherent volatility and risk in agriculture compared to corporate sectors. "This risks accelerating disinvestment, deepening rural poverty, and triggering social unrest," he warned. Signs of severe financial strain among farmers are already apparent. According to Khokhar, sharp declines in the use of essential fertilisers like urea and DAP, coupled with plummeting tractor sales, indicate that farmers simply cannot afford the critical inputs needed for the current Kharif season. "This directly threatens yields, especially for high-risk crops like cotton, and raises fears of severely reduced wheat sowing in the upcoming Rabi season, potentially pushing the country towards a food security emergency. The situation fuels warnings of mass rural migration and widespread protests," he added. Agriculture experts and stakeholders overwhelmingly believe that the gap between the scale of the crisis and the government's policy response is astounding. Farmers, they warn, are being pushed to the brink. Ignoring their plight and the foundational role of agriculture is a recipe for national instability. The implementation of the recommended measures — beginning with immediate tax relief on key inputs and the establishment of price and export regulatory bodies — is now seen as critical to averting a full-blown agricultural and social catastrophe.
