Business

Govt mulls slapping up to 70% Windfall Tax on banking sector’s lofty profits

Published

1 year ago

Farwa

Sources says govt considering slapping fixed tax rate between 50%- 70%.
Govt determining exact levels of profits extracted through recent currency manipulation by banks.
Officials working on proposal studied Windfall Tax imposed by UK, Austria, Italy, Australia and other countries.

ISLAMABAD: The government is considering slapping a Windfall Tax on the profits of the banking sector in the range of 50% to 70% similar to the one used in the West, which imposed the same tax on energy companies, reported The News on Friday.

“Different proposals are under consideration for imposing the Windfall Tax on profits earned by the banking sector. A fixed tax rate from 50% to 70% is expected to be slapped for getting revenues out of the lofty profits earned by the banks,” officials, who spoke on the condition of anonymity, told the publication.

However, sources in the Federal Board of Revenue (FBR) said that the proposal is yet to be approved by the government though Finance Minister Ishaq Dar had hinted in his press briefing on Wednesday that the government would move ahead with the Windfall Tax on the banking sector.

The government is ascertaining the exact levels of windfall profits extracted by the banking sector through recent currency manipulation. The policymakers may slap a tax at a rate whereby there is no threat of choking the banking sector.

The tax officials who are working on this proposal studied the Windfall Tax imposed by the United Kingdom, Austria, Italy, Australia and other countries whereby the energy companies had earned lofty profits in the aftermath of Russia-Ukraine war, so the respective governments had imposed the Windfall Tax to generate revenue. Even the Biden administration in the USA had threatened to impose Windfall Tax.

The recent energy crisis across Europe as a result of COVID-19, poor market decisions and the Ukraine war have pushed energy prices to all-time high.

Countries across Europe were moving to build up reserves in the face of restricted gas supplies to minimise the effects of a cold winter. At the same time, some governments were even considering country-wide blackouts and energy rationing to ensure that, at the very least, there was enough gas to heat homes.

“The government expects that in case of imposition of 50% to 70% fixed tax rate on lofty bank profits, the government can fetch Rs25 to Rs35 billion revenue generation,” said one official.

On the proposed Flood Levy, the government might grant an exemption on import of basic food items and raw materials of essential or life-saving drugs.

The levy could be in the range of 1% to 3% on all other imported items. It is estimated that the government can fetch Rs60 billion in the remaining six months of the current fiscal year 2022-23.

Sources said the government will prefer the Flood Levy because it will not become a part of the Federal Divisible Pool (FDP) under the NFC Award for distribution among the provinces, so the collected money will only be used by the federal government.

On the other hand, the FBR seeks to meet the annual tax collection target of Rs7,470 billion for the current fiscal year and has so far collected Rs3,428 billion in the first six months (July-Dec) period.

Now the tax authorities will have to collect Rs4,042 billion for materialising the desired tax collection target till June 30, 2022.

Business

PSX surpasses the historical 71,500-point threshold.

Published

2 days ago

Farwa

Investors celebrated as the PSX finally crossed the historic 71,500 point threshold, signalling a critical turning point in the state of the economy in the country.

The KSE-100 index jumped more than 740 points, soaring to a record high of 71,650 points, demonstrating the tenacity and optimism that pervaded the Pakistani financial market.

This outstanding accomplishment indicates strong growth possibilities for the foreseeable future and demonstrates investors’ faith in the nation’s economic prospects.

The Pakistan Stock Exchange (PSX)’s KSE-100 index saw a minor decline of 60.92 points on Friday, or 0.09 percent, and ended the day at 70,483.66 points.

In the foreign exchange market, the US dollar lost value in relation to the Pakistani rupee at the same time.

Currency dealers claim that on the first day of the workweek, the value of the US dollar dropped by 11 paisas to Rs278.20 in the interbank market, significantly strengthening the rupee.

Business

Outsourcing: Investors from Turkey stop by the airport in Karachi

Published

2 days ago

Farwa

Turkish investors, who are interested in outsourcing Pakistan’s airport industry, sent a high-level team to Karachi Airport.

The domestic arrival and departure lounge at Karachi airport was visited by the Turkish investment group, according to information. The investors were briefed about the workings of the Karachi airport by a delegation of the Civil Aviation Authority, headed by Secretary Aviation Saif Anjum.

An update on the volume of people and business leaving the airport was also provided to Turkish investors. It is anticipated that the delegation would tour the cargo terminal and CAA headquarters today.

The nation’s three main airports, Karachi, Lahore, and Islamabad, were formerly to be outsourced by the federal government.

Interest in outsourcing three of Pakistan’s airports has been expressed by local parties as well as investors from Germany, France, the Netherlands, Qatar, the United Arab Emirates, Malaysia, and Turkiye.

The timeframe for proposal submission for Islamabad International Airport’s outsourcing was extended by the Civil Aviation Authority (CAA) earlier on March 21.

The government’s top objective in the process of outsourcing international airports, according to Prime Minister (PM) Shehbaz Sharif, is openness.

First, he stated that Pakistan is willing to participate in a public-private partnership to outsource a portion of the airport’s commercial activities.

Business

The inaugural flight of Azerbaijan Airlines is between Baku and Karachi.

Published

5 days ago

Farwa

The national airline of Azerbaijan launched direct flights from Baku to Karachi today. There will be two weekly flights on this route, on Thursdays and Sundays.

The first flight will land in Karachi, and Azerbaijan’s ambassador, Khazar Farhadov, will be there to greet it.

This evening also marks the departure of the inaugural flight from Karachi to Baku, in addition to the arrival of the flight from Baku.

Azerbaijan Airlines said last month that it would be growing its network and flight operations in Pakistan.

Aviation insiders have verified that Azerbaijan Airlines is preparing to launch service to Karachi in the coming month of April.

In addition to its current services in Islamabad and Lahore, the airline plans to launch its Karachi route on April 18, with the inaugural flight anticipated to depart on that date.

Azerbaijan Airlines has been given permission to operate flights on the Karachi route, according to sources within the Civil Aviation Authority (CAA).

Following a bilateral agreement between the two nations, Azerbaijan Airlines has been given permission to extend its operations in Pakistan.