Category: News

Government is considering a tax concession to low salaried employees in the coming budget to be presented on Friday.

According to official sources, the income tax exemption limit in this category is proposed to be increased form Rs300,000 to Rs350,000 per annum. This limit had been raised to Rs300,000 from Rs200,000 last year and to Rs200,000 from Rs180,000 in 2009-10.

An income tax official said on Tuesday that raising the tax exemption limit would reduce the impact of rising prices, especially of food items, on employees.

Experts have suggested the introduction of a new category of senior income taxpayers, above the age of 70, for whom the exemption limit may be raised to Rs500, 000.

According to the official, the increase in the exemption limit for senior citizens and women is likely because of the decline in the value of the rupee.

 

Oil and Gas Regulatory Authority (ORGA) has announced cut in prices of three petroleum products up to Rs. 5.05 per liter effective from today June 1, 2011.

OGRA has notified reduction in prices of petrol by Rs 1.70 per litre, kerosene oil by Rs 5.05 per litre and High Speed Diesel (HSD) Rs 3.20 per litre. The new prices of petrol, kerosene oil and HSD would be Rs 86.71 per litre, Rs 84.65 per litre and Rs 94.11 per litre respectively.

Addressing a press conference, OGRA spokesman, Syed Jawad Naseem, said that the government had de-regulated prices of all petroleum products except kerosene oil, effective from June 1.

 

24 hour deadline to stop protest ended with terminations. Young Doctor’s Association had announced a strike for their pay raise and assurance of security but the consequences had to suffer by hundred of patients. Balochistan government sacked 66 protesting doctors, including five senior medical officers. Doctors were asked to resume their duties and call off their illegal strike but they neither resumed their duties nor ensured their attendance at hospitals. Medical care to poor patients remained disrupted due to the strike, thus, the government terminated all those protesting doctors who continued their illegal strike and did not attend the patients as part of their official duty.

The government has announced that medical officers selected through public service commission would be inducted on emergency basis in order to end the miseries of tens of thousands of patients suffering from the months’ long strike. All the fresh medical officers have been asked to report in three days and their paperwork will be done after some days. Their medical report and police reports will bechecked later, as first they would be inducted to provide medical help to the patients.

 

Sindh will start collecting sales tax, initially on 12 selected services from July 1. While the other federating units — Khyber Paktunkhwa, Punjab and Balochistan — still want the existing arrangements with the federal government to continue, Sindh is moving ahead to become a torch-bearer for others to follow suit.

Sindh had been agitating that the collection and distribution on sales tax on services (SToS) should be de-linked from Federal Divisible Pool, shared by provinces under the National Finance Commission (NFC) awards. The inclusion of the SToS in the divisible pool, though a provincial tax, has deprived Sindh of its fair share calculated on the basis of population and other weightages, it was maintained.

Since then it has argued by Sindh that the federal government should keep a separate account of SToS and directly transfer its proceeds to the province from where it is collected. After the 18th constitutional amendment on April 23, 2010 the sales tax on services along with central excise duty and workers welfare fund (WWF) have come under provincial jurisdiction. However, the federal government has been collecting revenue on many services under the head of federal excise duty.

The SBR is headed by a chairman with four members and unlike provincial Board of Revenue—- a government department—, it is an autonomous body. Its mandate and powers are close to those of Federal Board of Revenue. The silver-lining is that it has two senior retired FBR officers who have a rich experience on tax revenue collection. Presently, the SBR is carrying out computerisation and automation of its entire revenue collection system by launching web based recovery of taxes and fees with effect from July 1. The SRB has yet to do a lot before it starts collecting revenue. The Board is still in the process of drafting various laws eg. Sindh Sales Tax on Services Bill including Revised Bill and the Flood Tax Bill.

Initially only 12 services are being taxed whereas around 200 large and small services are still outside the ambit. The provincial government will move to bring many small services under the sales tax net. Such services as security, health, human resource development could be brought under the tax net. Currently, the provinces have to look to Islamabad for funds and Islamabad looks to Washington and we are all under vicious circle which retards growth and development of provinces and the country as a whole.

Controversial amendments are being planned in the upcoming Finance Bill 2011 to ‘quietly’ bring about a number of changes in the country’s power policy. For starters, legislation is on cards to empower the regulator, NEPRA, to go ahead with ‘automatic electricity tariff adjustment’. Not only this but legislation is also planned to orchestrate key changes in the Fiscal Responsibility and Debt Limitation Act (FRDLA 2005), which in essence would convert the debt office into a mere post office playing second fiddle to powerful bureaucrats of the relevant ministry, it is learnt.

Aware of our lawmakers proven habit of not bothering with the details of the bulky budget document, the economic managers of the incumbent regime are doing precisely that: slipping in far reaching amendments in the Finance Bill 2011 in a most innocuous manner. “Yes, the government has taken the multilateral creditors including the IMF, World Bank and Asian Development Bank into confidence about its intention to make NEPRA amendments as part of next Finance Bill,” a senior official of government disclosed in a background discussions on Sunday.

The price of petroleum products except for diesel are expected to be slashed from June 1. Sources at Finance Ministry told that petrol price is likely to be reduced by Rs1.50 per litre; kerosene oil by Rs5.50 per litre; light diesel Rs 6 and; High Octane by Rs 1.77 per litre.

Prime Minister Gilani said Pakistan will continue intelligence sharing with the US while talking to journalists in Lahore. However, he said that Washington had been told in clear terms that a repeat of Abbottabad raid would not be tolerated. PM said that the two governments had yet to resolve their differences on the policy of drone strikes. He also said that Islamabad had sought help from the US to overcome energy crisis.

Relations with the US in general had turned sour after subsequent incidents involving a US contractor arbitrarily shooting two men in Lahore in January, and then a covert US operation deep inside Pakistani territory that killed al Qaeda chief Osama Bin Laden in early May. The relations between CIA and ISI had broken down to such an extent that the Prime Minister himself declared in an interview that the cooperation between the two intelligence agencies had broken down. Pakistan ultimately ended up asking the US to recall all troops stationed in Pakistan.

Stocks extended gains on Friday amid hopes that the government will announce the removal of a capital gains tax in the upcoming 2011/12 budget, dealers said. The 2011/12 (July-June) budget is due to be unveiled on June 3. According to media reports, the government may decide to remove the capital gains tax. A 10 percent capital gains tax is imposed on stocks held for six months or less and 7.5 percent on stocks held between 6 months to a year.

Officials from the finance ministry have declined to comment. “There is a feeling in the market that the capital gains tax will be removed, and this is helping the sentiment,” said Mohammed Sohail, chief executive of brokers Topline Securities. “This hope is likely to keep the market positive in the sessions ahead of the budget, and if indeed the tax is removed, it should result in increased activity in the market,” he said.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index ended 0.22 percent, or 27.40 points, higher at 12,225.22 on turnover of 79.64 million shares. In the currency market, the rupee eased 85.65/75 to the dollar from 85.57/a day earlier, amid slightly higher dollar demand from importers.

The Karachi situation, it appears, is gradually slipping out of government’s control. Outlaws are emerging as more powerful than the government agencies, as a result of which the common man feels insecure. He doesn’t know what to do in such a situation. Hundreds of shopkeepers and traders of various markets, including Bahadur Yar Jang Market, Urdu Bazaar, Paper Market and other adjoining markets on MA Jinnah Road received chits from ‘extortionists’ on Sunday.

The extortionists wanted the shopkeepers to pay them money. Helpless shopkeepers and traders approached the police for help, but were told that they had no instructions to challenge the accused. Unable to do anything else, they closed their shops and protested against the daring move of the outlaws in broad daylight. Pictures of their sit-in were published in various newspapers. This situation is quite painful, especially so, because both the PPP and the MQM, the parties that get votes from the country’s biggest city and are in government, have failed to restore law and order. What was once known as the city of lights is turning into a lawless city.

In Karachi, police appear to be in complicity with the outlaws. If this is not the case, the Sindh government must try to find out as to why the police did not help the people who had approached them immediately after receiving chits from extortionists. Also, it should be investigated how it was possible for the extortionists to distribute chits in broad daylight to such a large number of people. (It is assumed that a chit is like a ‘bill’ which the recipient has to clear instantly to escape consequences).

Taliban leader Mullah Baradar is believed to have informed US whereabouts of Al-Qaeda Chief Osama Bin Laden, a UK paper claimed. According to the report, in return the US promised to pullout troops from Taliban strongholds in Afghanistan once Osama had been killed or captured. Until now it has been believed that Osama Bin Laden was caught when the US intercepted a phone call made by his courier Abu Ahmed al-Kuwaiti. But new reports suggest it was actually Baradar who told the US where he was hiding. Baradar was arrested in a joint Pak-US operation last year in Karachi and was interrogated in prison before being released last October.