Saturday July 13, 2024

PM announces fixed tax exemption for retailers, end to FCA for 17m people

I have formed a committee to review the fixed taxes imposed on the retailers, says PM

By News Desk
August 24, 2022
Prime Minister Shehbaz Sharif addressing nation from Qatar on August 23, 2022. —Radio Pakistan
Prime Minister Shehbaz Sharif addressing nation from Qatar on August 23, 2022. —Radio Pakistan

DOHA: Prime Minister Shehbaz Sharif on Tuesday announced a major relief package for the inflation-burdened nation under which fixed taxes have been abolished for retailers and more than 1.7 million people will now be exempt from fuel charges adjustment on electricity bills.

Addressing the nation from Qatar — where he arrived on Tuesday on a two-day trip — the premier said that fixed taxes were imposed on the people in the federal budget for the fiscal year 2022-23, announced on June 10, against the intention of the coalition government.

“I have formed a committee to review the fixed taxes imposed on the retailers,” he said. The move will translate into a tax gap of Rs42 billion, but PM Shehbaz said that the coalition government “cannot add further pressure on small traders”.

In a press conference last week, Minister for Finance Miftah Ismail said that the coalition government aimed at collecting Rs42 billion through retail taxes, however, after the tax exemption, it would no longer be able to meet the target. Ismail revealed that the revised target was now Rs27 billion. “To meet the gap, which will be created by the exemption of fixed taxes on small traders, the government is imposing a further tax of Rs36 billion on the tobacco industry,” he said.

Addressing the backlash received in the last two days regarding inflated electricity bills, the prime minister announced that the coalition government, after intense discussions with the International Monetary Fund (IMF), has decided to exempt 17.1 million people from paying excessive amounts charged under fuel charges adjustment for the month of July and August.

“We have been working on the fuel charges adjustment case for last five days and we have decided to exempt a major chunk of the population from these charges; however, we are yet to take a decision regarding the 13 million people falling under the category of people who consume more electricity,” he said.

He added that agricultural consumers with tubewells will also be exempt from the fuel charges adjustment amounts. The announcement by the prime minister follows necessary amendments to the relevant tax laws and the president’s nod.

On Monday, President Dr Arif Alvi signed the Tax Laws (Second Amendment) Ordinance, 2022. According to a statement issued by the President’s Office, Dr Alvi gave the approval to the ordinance on the advice of the prime minister under Article 89(1) of the Constitution. Under the ordinance, the amendments have been made to the Sales Tax Act 1990, Income Tax Ordinance 2001, Federal Excise Act 2005 and Finance Act 2022.

The consumers of KE would also benefit from the relief given by Prime Minister Shahbaz Sharif on fuel adjustment to consumers of electricity, Bilal Azhar Kiani, Coordinator to Prime Minister on Energy, told The News.

Kiani, accompanying the PM on his visit to Qatar, said Energy Minister Khurram Dastagir will give further details of this relief. Meanwhile, Prime Minister Muhammad Shehbaz Sharif and Prime Minister and Minister of Interior of the State of Qatar Sheikh Khalid bin Khalifa bin Abdulaziz Al Thani on Tuesday reaffirmed their resolve to further enhance bilateral cooperation, particularly in the trade and investment domains. The two leaders led their respective sides during the talks. They reviewed the bilateral relations and exchanged views on regional and international issues of common interest. They also expressed satisfaction at the growing momentum in engagement between the two countries.

PM Shehbaz underlined the government’s keen interest in deepening and diversifying engagement with Qatar in the energy sector, including renewables, infrastructure, transportation, agriculture and livestock and tourism. The prime minister thanked the Qatari leadership for the care afforded to the Pakistani expatriates in Qatar. Highlighting Pakistan’s rich human resource potential, Prime Minister Shehbaz said he looked forward to working with the Qatari leadership in exploring more opportunities for Pakistanis who could contribute to Qatar’s development through their skill and enterprise.

Reviewing the latest developments in Afghanistan, the prime minister underscored the importance of constructive engagement and the need for the international community to scale up its support for the Afghan people in dealing with the twin humanitarian and economic crises.

He lauded Qatar’s efforts for peace and reconciliation in Afghanistan as well as its humanitarian assistance for the country. He congratulated Qatar on hosting the FIFA World Cup 2022 and wished the people and the Government of Qatar every success in the convening of the world’s largest sporting events.

Meanwhile, Prime Minister Muhammad Shehbaz Sharif interacted with the prominent Qatari and Pakistani business leaders at the Pakistan-Qatar Trade and Investment Roundtable 2022 in Doha Tuesday. The Qatar Financial Centre (QFC), the Pakistan Business Council Qatar and the Embassy of Pakistan in Doha jointly organised the Roundtable.

H.E. Ali bin Ahmed Al Kuwari, Finance Minister of Qatar, H.E. Sultan Bin Rashid, Undersecretary Ministry of Commerce and Industry of Qatar, and Yousaf Al Khater Jaida, CEO, Qatar Financial Cantre, also participated in the event.

A large number of leading Qatari business and corporate executives as well as Qatar-based Pakistani business community in Doha also attended. In his address, the prime minister highlighted the special nature of Pakistan-Qatar relations based on mutual respect, trust and support. He described Qatar as a reliable partner whose support was sincerely appreciated.

The prime minister highlighted his government’s firm commitment to provide a friendly environment for business and investments in the country. The prime minister stressed that Pakistan was blessed with immense natural and human resources and that Pakistan’s geographical location enabled it to become the region’s premier trade, energy and transport corridor. This unique advantage made Pakistan a market full of promise and opportunities, the prime minister said.

The prime minister underscored that having a large consumer market with an ever-expanding middle class, Pakistan offered attractive business opportunities for investors in the fields of food security, energy including renewables, agriculture and livestock, information technology, hospitality and tourism sectors.

The prime minister assured of the government’s full support to Qatari investors in deepening their footprint in Pakistan. He appreciated the efforts of the organisers in arranging the Roundtable with Pakistani and Qatari businessmen.

Earlier, the ambassador of Pakistan to Qatar, in his welcome address, expressed the confidence that the visit of prime minister would lead to substantial enhancement of bilateral trade, investment and economic ties.

During the Roundtable, a distinguished panel discussed the enhancement of bilateral trade and economic relations. The panel discussion mainly focused on exploring new areas of cooperation to forge stronger business-to-business linkages.

The panellists included Syed Naveed Qamar, Minister of Commerce, Ms. Hina Rabbani Khar, Minister of State of Foreign Affairs, Ms. Alanoud bin Hamad Al Thani, Chief Business Officer of QFC, Mohsin Mujtaba, Honorary Investment Counsellor, and Dr. Javaid Iqbal, President of Pakistan Business Council.

Also, Prime Minister Shahbaz Sharif met a delegation of Qatar Investment Authority. The prime minister invited the Qatari side to invest in Pakistan’s energy, aviation, agriculture and livestock, maritime, tourism and hospitality sectors. He also urged the Qatari investors to explore the opportunities presented by the China-Pakistan Economic Corridor to promote regional connectivity and mutual prosperity. He assured full facilitation to QIA through transparent and expeditious processes. The prime minister stressed the need to further enhance bilateral economic and investment engagement, particularly in the renewable energy including solar and wind power generation, aviation, maritime, industrial and infrastructure development and hospitality sectors.

Pakistan and Qatar enjoy longstanding fraternal ties, rooted deep in shared faith and values as well as close bilateral cooperation in diverse fields. The two countries also collaborate closely on regional and international issues.