The government on Thursday deferred approval of pension cuts for existing pensioners due to questions about its legal mandate. However, it greenlighted a contributory pension scheme for new civilian employees, starting immediately, and for military personnel, starting next year.
The military authorities did not agree to several proposals to rationalise pension benefits, leading the government to present a diluted pension scheme at the Economic Coordination Committee (ECC) meeting. The ECC deferred even this diluted scheme after some members questioned the ECC’s jurisdiction over decisions requiring legal and regulatory changes.
Finance Minister Muhammad Aurangzeb chaired the ECC meeting, which decided that the federal government would cover average 15% losses banks might face on Rs560 billion lent to Small and Medium Enterprises (SMEs) over the next ten years. The ECC approved covering Rs84 billion in projected losses from 2024 to 2034 and sanctioned nearly Rs39 billion in supplementary grants just days before the fiscal year’s end.
Pension scheme
The finance ministry presented a compromised version of the new pension scheme for ECC approval, based on input from the General Headquarters (GHQ) and the Establishment Division. The proposed package excluded major elements that could have led to substantial savings for the government. The annual pension bill is now the fourth-largest budget expense, following interest payments, defence, and development spending.
Government officials indicated that even if the ECC approved the diluted scheme, the estimated first-year savings would be only Rs4 billion, or 0.4% of the next fiscal year’s pension allocation. Some ECC members argued that neither the finance ministry nor the federal cabinet had the mandate to alter existing employee benefits, suggesting the matter could end up in court.
Due to objections from the military and the Establishment Division, the finance ministry dropped the proposal to reduce commutation from 35% to 25%. The military also rejected calculating pensions based on the last three years’ average pay, agreeing instead to use the last two years’ average pay, pending legal approval.
An agreement was reached to impose a 3% per annum penalty for early retirement after 25 years of service, not affecting the military. The government proposed future pension increases based on the net pension authorised at retirement, while the military wanted increases tied to 100% of the average inflation rate over the last two years. A consensus was reached for future increases based on 80% of the last two years’ average inflation rate.
The finance ministry suggested limiting pension benefits to the third family tier for only ten years after the deaths of the pensioner and spouse, excluding families of martyred persons. The government also proposed that re-employed pensioners choose between salary and pension benefits, applicable only after age 60. The proposal to eliminate multiple pensions was shelved, allowing them to continue for the spouse’s lifetime.
The Establishment Division opposed reducing pensionable emoluments to 70% of the last three years’ average and the 3% penalty clause. It suggested raising the retirement age to 62 instead of cutting benefits.
Despite these challenges, the ECC approved establishing a Pension Fund using savings from benefit reductions and introduced a contributory pension for new entrants, starting next month for civilian employees and July 2025 for military personnel.
The ECC sanctioned an Rs8.6 billion supplementary grant for pension needs, including Rs7.7 billion for military pensions. The annual pension budget increased from Rs801 billion to Rs886 billion, with military pensions rising from Rs563 billion to Rs647 billion. For the next fiscal year, the government allocated Rs1.014 trillion for both military and civilian pensions.
SME scheme
The ECC approved the Risk Coverage Scheme for SMEs, covering average 15% losses banks might incur from lending to small and medium-sized companies. It sanctioned 20% risk coverage for small firms, requiring Rs56 billion over ten years, and 10% coverage for medium-sized companies, needing Rs28 billion over the same period. For the coming fiscal year, the ECC endorsed a Rs2 billion allocation for this purpose.
Return of USF funds
The ECC approved returning Rs11.1 billion to the Universal Services Fund (USF) from the remaining Rs61 billion, including the research and development budget. The Ministry of Information Technology requested the funds back due to a court case and to meet IT-related project needs of telecommunication companies. Previously, Rs5 billion had been diverted from the USF to the social media firewall project.
Other approvals
The government approved supplementary grants worth Rs4.3 billion for the Federal Board of Revenue (FBR). The ECC also sanctioned Rs12.1 billion for Sindh government dues and Rs7.9 billion for clearing 7th Population Census dues.
An undated image showing a general outside view of the FBR building. — Facebook/Federal Board of Revenue/File
ISLAMABAD: The Federal Bureau of Revenue (FBR) on Saturday ruled out any general extension in the September 30 deadline announced by the tax collecting authority for the submission of tax returns.
Speaking to Geo News, FBR spokesperson Bakhtiar Muhammad said: “Historically, a facility used to be given [to the masses] by extending the overall deadline. However, this time the decision has been made that the date [for submission of tax returns] will not be extended and September 30 will be the last date to file tax returns.”
The development comes as traditionally the FBR, in recent years, has adopted the practice of extending the tax return submission deadline which was pushed to October 31 last year.
Last year, the authority pushed the date for the filing of tax returns to October 31.
However, it seems that the FBR intends to provide no leeway and intends to adopt a rather strict approach towards the issue amid the incumbent government’s strenuous efforts to expand the tax net and increase revenue generation in light of the multi-pronged economic challenges faced by the country.
In June, Prime Minister Shehbaz Sharif-led administration in its tax-heavy budget passed in June, set out an ambitious taxation plan to boost its prospects of securing a fresh bailout deal with the International Monetary Fund (IMF) — which it eventually did as the programme now awaits the approval of the Fund’s executive board.
Elaborating on the authority’s decision against extending the deadline, the spokesperson underscored that it was a legal requirement to submit the tax returns by September 30.
Acknowledging that some filers may find it difficult to submit their returns before the due date, such people can reach out to their respective tax commissioners and seek an individual extension as provisioned in the law.
They can secure an extension owing to their specific reasons, however, the deadline will not be pushed beyond September 30 for the entire country overall, he added.
When asked about this might leave thousands unable to submit their tax returns, the FBR spokesperson said that this was what the authority warned the masses before the deadline expired.
Noting that there were still nine days left to submit the returns, the official said: “There is a three-month period [for people] to file their tax returns from July 1 till September 30. If they wanted to submit their returns, they would have done so during this time”.
FBR gears up for drastic measures
Last week, The News reported that the FBR has proposed drastic measures to avoid a possible shortfall in tax collection including freezing bank accounts and imposing a ban on the purchase of property and vehicles for tax evaders.
Facing a monumental tax shortfall in the first quarter (July-September) under the IMF programme of $7 billion Extended Fund Facility (EFF) coupled with its failure to bring 3.2 million retailers into the tax net, the tax collection body has geared up for significant taxation measures against millions.
Sources said that an internal assessment of the FBR has shown a tax shortfall of over Rs220 billion for the first quarter (July-September) against the agreed target of Rs2,652 billion.
The authority faced a shortfall of Rs98 billion in August 2024. The FBR had collected Rs1,456 billion in the first two months (July and August) against the assigned target of Rs1,554 billion leaving the body with the challenging task of fetching Rs1,196 billion during the ongoing month to materialise the first quarter agreed target with the IMF.
The annual tax collection target of FBR envisaged Rs12,970 billion, which was approved by parliament (Rs12,913 billion).
Speaking to the publication, official sources confirmed that the FBR identified two million nil filers out of the total of six million return filers.
Suggesting to categorise non-filers into three categories, the authority has recommended the government impose a fine of Rs1 million for incorrect/incomplete tax returns.
The FBR official further added that “nil filers” would have to face severe action including freezing of their bank accounts and a ban on the purchase of properties or vehicles with an immediate effect.
Whereas, those evading payment of tax amounts ranging from Rs0.5 million to Rs1 million will face disconnection of electricity and gas connections.
It is to be noted that previously, the tax collection body also ordered the disconnection of mobile phones of 0.5 million non-filers, but it could not achieve the desired results.
The FBR, in the third category, has tabled the recommendation that if the tax dodgers were under filers up to the tune of Rs1 million or more, it would also propose some more measures against them.
Furthermore, the tax authority has decided to outsource audits of high-net-worth individuals (HNWs) and companies.
ISLAMABAD – A meeting chaired by Prime Minister Shehbaz Sharif in Islamabad on Friday gave in-principle approval to FBR’s homegrown Transformation Plan regarding tax collection management.
This plan has been prepared by the FBR on the instructions of the Prime Minister in collaboration with other economic and technological experts of the country after a detailed analysis of the tax collection of the last twenty five years.
This will enable more tax to be collected in a better manner without hindering the journey of economic development and will provide more convenience to the people paying full tax.
The meeting was given a detailed briefing on the FBR’s transformation plan. It was informed that the plan includes a comprehensive strategy for the effective use of information technology, incentivizing officers and staff who demonstrate integrity and performance in improving tax collection and enhancing the enforcement of tax laws.
According to the proposals, strict measures can be taken against those who do not pay full tax on time and are involved in fraud in order to prevent tax evasion in the society.
It was informed that these measures will be implemented after extensive consultation with good taxpayers.
Under the transformation plan, auditing capacity of FBR will be enhanced.
Speaking on the occasion, the Prime Minister was appreciative of FBR’s transformation plan and directed further consultation on it with all relevant stakeholders. He said good taxpayers should be invited and consulted on the transformation plan.
The Prime Minister Shehbaz directed the formulation of a comprehensive strategy to further enhance the effectiveness of the FBR’s enforcement system, describing it a pressing need of the time.
The Prime Minister noted that FBR is the backbone of the country’s economy and its digitization is an important milestone in government’s economic reforms.
Shehbaz Sharif said improvement in revenues will enhance the provision of services to the public and lead to betterment in the social sector.
The Prime Minister also directed third party audit of all FBR projects.
Shehbaz Sharif said promotion of the private sector is among the government’s priorities, emphasizing an active and prosperous private sector is very important for the country’s economy.
The Prime Minister also directed to accelerate efforts against smuggling. It was also decided to set up new check posts to prevent smuggling.
Honda remains leader in bikes market, with its top-selling units like CD 70, and that’s without making any major changes as the entry-level bikes look almost same for a long time. As the CD-70 remains its most selling model, bikes like the CD-70 Dream and Pridor are considered a niche products.
Despite failing to achieve top sales, CD 70 Dream is still in the market, featuring air-cooled, 4-stroke engine that delivers smooth performance and impressive fuel economy, often averaging around 60-70 km/l, making it ideal for daily commuting.
The bike looks better with stylish and modern design with attractive graphics, as compared to simple CD70. People also like its comfort as built quality remains optimum, comparing to other players.
Its pricing makes it accessible to a wide audience, including students and working professionals, solidifying its status as a favorite among motorcycle enthusiasts in Pakistan.
As bikes prices remain out of hands, people are having hard time to upgrade their ride while companies also face low sales.
Honda CD 70 Dream Price
The price of Honda CD70 Dream is Rs168,900 in September 2024.
If you live in Lahore or any other city in Punjab; you might have faced difficulties in getting land record in previous years, but now the government made the land verification process smooth with digitization.
To curb the menace of land mafia and to help residents of Punjab, the government rolled out a systematic process and also eased the process of property transfers and real estate transactions.
A new verification system is Live by provincial authorities to check the legitimacy of properties available for purchase or investment across the region of 110 million people.
The relevant authority in this regard is Punjab Land Record Authority which oversees management and maintenance of land records. You can get different services, including ability to search for and view land records, as well as request copies of documents.
Check Property Ownership Online 2024
Here’s Step by Step Guide To Check property ownership
