Business

Federal Shariat Court gives govt 5 years to implement Islamic, interest-free banking system

Published

2 years ago

Farwa

Federal Shariat Court says economic system of an Islamic country like Pakistan should be interest-free.
Court directs govt to immediately remove word interest from all banking and other laws.
Says transactions with international institutions, including IMF and World Bank, should be made interest free.

The Federal Shariat Court on Thursday gave the government five years to implement an Islamic and interest-free banking system in the country, as the economic system of an Islamic country like Pakistan should be free of interest.

Justice Dr Syed Muhammad Anwer read out the verdict that was reserved by a three-member bench of the Federal Shariat Court. The court had reserved its verdict on April 12 after hearing all the parties and the attorney general.

The verdict stated that abolition of riba is fundamental for an Islamic system, adding that any transaction involving riba is “wrong”.

“The abolition of riba and its prevention is in accordance with Islam. The interest taken in any case, including debt, falls into riba. Riba is completely forbidden in Islam,” said the Federal Shariat Court.

The Shariat court’s verdict also stated that interest given on external and internal loans by the government also falls under riba.

“The government should ensure that internal, external loans and transactions should be made interest-free. Transactions with international institutions, including the IMF and World Bank, should be made interest free as well,” said the court.

The court stated that Islamic banking and a banking system free of interest are two different things.

“Pakistan already has an interest-free banking system in some places [but] riba should end in Pakistan. The economic system of an Islamic country like Pakistan should be interest-free,” said the verdict.

The verdict stated that China, as per Islamic Shariat, is heading towards an interest-free banking system. It also directed the government to immediately remove the word interest from all banking and other laws.

The verdict also stated that the attorney general had informed them that it would take time to get rid of the interest-based system in the country.

The Supreme Court’s Shariat Applet Bench in 2001 had ordered the implementation of the order to abolish the interest system.

The court, giving the government five years to implement an interest-free banking system in the country, ordered that such a system should be implemented in the country by December 31, 2027.

The court stated that had Article 38-F been implemented years ago then the riba would have ended. It added that the State Bank of Pakistan, in its report, had stated that 20% of banking had shifted to the Islamic system. It added that five years is enough time to ensure the implementation of an Islamic and interest-free banking system in the country.

“The government is expected to present an annual report on the interest-free system in Parliament,” said the verdict. The court also declared the Interest Act 1839 and all laws and provisions facilitating interest as unlawful.

Business

Pakistan’s lunar mission ‘ICUBE-Q’ reaches the moon orbit.

Published

16 hours ago

Farwa

Pakistan’s lunar mission (ICUBE-Q) entered orbit around the moon on Wednesday.

Pakistan’s historic lunar mission (ICUBE-Q) launched from Hainan, China, on Friday aboard China’s Chang’E6 spacecraft.

According to the IST, the satellite ICUBE-Q was planned and developed in partnership with China’s Shanghai University SJTU and Pakistan’s national space agency SUPARCO.

The ICUBE-Q orbiter is equipped with two optical cameras to image the lunar surface. ICUBE-Q has now been integrated into the Chang’e6 mission after successfully qualifying and testing it.

Chang’e6 is the sixth lunar exploration mission launched by China.

The launch event was streamed live on the IST website and social media platforms. Chang’6, China’s Lunar Mission, will land on the Moon’s far side to collect surface samples before returning to Earth for further research.

Business

The FIA and KE have launched 13 successful operations against power theft.

Published

16 hours ago

Farwa

In March 2024, operations were performed in collaboration with the FIA, targeting locations such as Marora Goth, Peer Abad, Ellahi Colony Metroville, Merchant Navy Housing Society, Johar Colony, Willayatabad, and Architects Society, among others. As a result of these collaborative efforts, six FIRs regarding power theft have been filed. Furthermore, four people were caught, with three being remanded to jail and one being released after paying the fines. To enforce governance and maintain accountability, a total fine of PKR 44.33 million was issued. Additionally, in partnership with FIA Balochistan, KE has conducted anti-theft operations in Hub, where teams from KE and FIA thoroughly investigated places including as markets, retail plazas, residential and commercial properties.

Regular actions against illicit power use are part of KE’s everyday activities to prevent line losses and protect the safety and security of the electrical infrastructure. Since the start of the fiscal year (FY 2023-24), over 24,000 kunda removal drives have been performed, resulting in the elimination of over 190,000 unlawful connections and the recovery of over 260,000 kgs of illegal kunda wires.
Ongoing raids involving law enforcement personnel and other agencies have resulted in the registration of around 994 FIRs against various individuals throughout Karachi. Since the launch of the nationwide power theft campaign in September 2023, more over 100,000 incidences of theft of 180 million units of electrical power have been identified in KE’s service zone.

In response to KE’s anti-theft initiatives, a KE spokesperson stated that “71% of KE’s feeder network is loadshed-free. However, 29% of the KE network remains difficult, with electricity theft and nonpayment of bills still key issues. Serious theft cases have been found in Baldia, Surjani, Korangi, Orangi, Liaqatabad, Landhi, and Lyari, among other places. Highlighting the repercussions of electricity theft, which may jeopardize the safety standards of the power network, the KE Spokesperson noted that PKR 117 million has been recovered.

Recognizing the challenges faced by current macroeconomic conditions, especially high inflation, KE is taking proactive steps to assist customers by establishing facilitation camps throughout the city. Since July 2023, approximately 240 recovery camps have been hosted around KE’s operational zone to help customers resolve billing concerns, including supporting payment plans with manageable installments.

Business

Budget 2024–25: The government intends to abolish tax exemptions.

Published

16 hours ago

Farwa

According to the specifics, the federal government plans to phase out existing tax breaks for the erstwhile Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA) regions in the upcoming fiscal year.

The decision to eliminate tax breaks in the FATA/PATA region is estimated to produce Rs 100 billion in annual revenue for the national government.

According to sources close to the issue, the Federal Bureau of Revenue (FBR) has already created a preliminary proposal for the next fiscal year’s budget, and the FBR head has also informed the finance minister on it.

Currently, the federal government provides tax breaks of Rs 1,200 billion to various industries; however, the IMF has instructed Pakistan to phase out these tax breaks in the next budget.

Pakistan’s president, Asif Ali Zardari, passed the Tax Laws (Amendment) Bill 2024 last week in accordance with Article 75 of the constitution.

According to a President House News release, the bill proposes amending legislation governing taxes and duties.

The bill’s revisions include changes to sections 30DDD, 43, 45B, 46, and 47 of the Sales Tax Act of 1990.

Similarly, the amendment bill amended sections 29, 33, 34, and 38 of the Federal Excise Act 2005, as well as sections 122A, 124, 126A, 130, 131, 132, 133, and 134A of the Income Tax Ordinance 2001.