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IMF proposes taxing pensioners to increase tax revenue

In Brief
POLITICS
Government and military issue strong rebukes against perpetrators of 9 May riots
On 9 May, both the government and the military strongly criticized the perpetrators of the 9 May riots on the first anniversary of the incident. Prime Minister Shehbaz Sharif called the violence a “rebellion against Pakistan” during a special meeting of the federal cabinet. He noted that the “real aim of May 9 [incidents] was to end democracy in Pakistan and, God forbid, bury the Constitution, and a nefarious goal of establishing kingship and dictatorship of an individual.” He explained that the purpose of the meeting was to remember the “martyrs and their families,” and also “give a message of unity with them.” During the meeting, the Minister for Law and Justice, Azam Nazeer Tarar, submitted a report prepared by a committee formed by the caretaker government, which held PTI leadership accountable for the 9 May riots. Separately, the Chief of the Army Staff (COAS), General Asim Munir, referred to the incidents as a “dark chapter” in Pakistan’s history during his visit to Lahore Garrison, where he laid a wreath at the Martyrs’ Monument. Commending the troops for their services, he warned that there would be “no compromise or deal with the planners and architects of this dark chapter in our history.”  (Syed Irfan Raza, “PM calls May 9 riots ‘rebellion’ against state,” Dawn, 10 May 2024)
 

Imran Khan gives former PTI leader Arif Alvi an “important task”
On 9 May, during a press conference held by PTI leaders, it was revealed that Imran Khan has assigned an “important responsibility” to former President and party leader Arif Alvi to “resolve things” through dialogue. This instruction came after the party was unable to draw significant crowds to mark the first anniversary of the 9 May riots. However, the leaders did not mention any details of the task that was assigned to Alvi, who has made attempts in the past to bridge the gap between Khan and the establishment. During the conference, while responding to a query on why the PTI did not want to talk to the ruling parties, Alvi explained that dialogues should be held with those who wield power, and the political parties have “no actual power.” He accused political parties of being “involved in the Form-47 [manipulation].” (Ikram Junaidi, “Imran tasks Alvi with ‘important’ job,” Dawn, 10 May 2024)
 

ECONOMY
IMF proposes taxing pensioners to increase tax revenue
On 10 May, The Express Tribune reported that after an IMF team reached Islamabad, it urged Pakistan to withdraw various tax exemptions from different pension schemes and instead tax the military and civilian pensioners. It asked the country to regain additional taxes equivalent to 0.5 per cent of the Gross Domestic Product (GDP) from business and salaried individuals. Accepting the IMF’s demand to tax retiring or retired people would help Pakistan generate additional income tax ranging from PKR 22 billion to PKR 25 billion per year. In addition to this, the fund has proposed ending income tax credits for voluntary payments to ensure workers’ participation funds. These measures, which may be implemented from the new fiscal year,  would adversely affect the marginalized fixed-income population which has been facing double-digit inflation. Salaried individuals have been witnessing a high tax burden despite the fast erosion of purchasing power. As per sources, the annual cost of income tax exemptions for retired government workers and military officers accounts for PKR 12 billion. If the country agrees to the IMF recommendations, it could gain PKN 900 million when estimated with the last fiscal year’s figures. (Shahbaz Rana “IMF urges Pakistan to tax pensioners,” Dawn, 10 May 2024)
 

EXTERNAL
FO spokesperson rejects US report on religious freedoms, says it is based on “faulty assumptions”
On 9 May, Foreign Office Spokesperson Mumtaz Zahra Baloch rejected the US Commission on International Religious Freedom (USCIRF) annual report for 2024, claiming the data on Pakistan was based on “faulty assumptions and unsubstantiated allegations.” She described USCIRF’s annual exercise of designating countries as “unwarranted and futile.” The report claimed Pakistan committed violence against religious minorities and “forced conversions,” including the Peshawar Mosque blast that killed 100 and the killing of a Sikh citizen in Khyber Pakhtunkhwa. It referred to Pakistan as a “country of particular concern for engaging in systematic, ongoing, and egregious violations of religious freedom.” The report cited multiple incidents which showed that in “2023, religious freedom conditions in Pakistan continued to deteriorate. Religious minorities were targeted for their beliefs, including accusations of blasphemy, and were subject to mob violence, lynchings, and forced conversions.” However, the report also outlined “positive reforms” like the federal government’s blasphemy laws amendments and the act of changing Islamic studies under non-compulsory subjects. Baloch declined the allegations and said: “The futility of USCIRF’s recommendations can be gauged by the fact that since 2020 the US State Department has ignored its recommendation to declare India a ‘Country of Particular Concern’.” (“US report on religious freedom in Pakistan 'based on faulty assumptions': FO,” The News International, 9 May 2024)
 

AF-PAK
Afghan authorities should take effective action to curb terrorism, says FO
On 9 May, Foreign Office spokesperson Mumtaz Zahra Baloch rejected allegations by Afghanistan that the Da’aish terrorist group was operating within Pakistan. Earlier on 6 May, the Director General of the Inter-Services Public Relations (ISPR), Major General Ahmed Sharif accused the Taliban of not taking enough action to curb cross-border terrorist attacks by the banned Tehreek-e-Taliban Pakistan (TTP). He also publicly confirmed that Afghanistan was linked to the 26 March terrorist attack in Besham against Chinese engineers. In response, the Afghan Defence Ministry rejected the claims and blamed Islamabad for supporting Daesh. Baloch detailed: “We have also found evidence that the attack in Besham has links with terrorists currently residing inside Afghanistan. The suicide bombing, as said by DG ISPR, connects to across the border. The planning of this terrorist attack took place in Afghanistan, and the terrorists and their facilitators were being controlled from Afghanistan.” She denied the allegations of aiding Daesh, and called on Afghan authorities to take “effective measures” and demonstrate that “terror groups do not have sanctuaries and hideouts inside Afghanistan.” Further, she agreed to share evidence once data was available, but also advised Afghan authorities of taking action instead of making “irresponsible statements.” (Kamran Yousaf, “Islamabad, Kabul embroil in fresh war of words,” The Express Tribune, 9 May 2024)
 

PoK
Call for shutter-down strike” in response to harsh police crackdown
On 10 May, the Jammu Kashmir Joint Awami Action Committee will launch a strike called "shutter-down and wheel-jam" throughout the region, in response to reports of the police detaining approximately 70 activists in order to prevent a ‘long march.’The committee was supposed to stage the march to pressure the government to comply with an agreement reached between both parties earlier in February. The public action committee has spearheaded a campaign advocating against  “unjust” taxes on electricity bills, and has demanded that electricity be provided to consumers in accordance with the production cost of hydel power in Paksitan-occupied Kashmir (PoK). A day earlier on 9 May, the Muzaffarabad police carried out search operations at the home of Shaukat Nawaz Mir, the elected representative of traders, as well as various other individuals of the action committee. A total of eight committee members, including two student leaders, were apprehended and taken into custody. Protests in the Dadyal tehsil of Mirpur turned violent after overnight raids triggered clashes. (Tariq Naqash, “Police crackdown in AJK prompts ‘shutter-down strike’ call,” Dawn, 10 May 2024)

Pakistan on Twitter

 

Strongly condemn the heinous terrorist act in Gwadar, where 7 innocent lives, from Punjab, were brutally taken. Targeting unarmed civilians is despicable & tarnishes Baloch hospitality and values. Comprehensive action is needed against these terrorists, to ensure justice & security for all.
-Mir Abdul Quddus Bizenjo
 
Innocent people were martyred in Gwadar, it is against our Pakhtun and Baloch traditions to kill any of our guests or neighbors with extreme cruelty.
Balochistan Chief Minister Mir Sarfraz Bugti.
-PPP
 
Pakistan Tehreek-e-Insaf is the only party, which attacked the Pakistan Army, attacked the GHQ, set fire to the Corps Commander's House and rebelled against General Asim Munir along with some army personnel. You have to ask for forgiveness!
-Saad Kaiser

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Populism, PTI, Pakistan and 9th May
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Attacking the NFC – again
The News International, 10 May 2024
“The new line of argument being presented at different fora is somewhat as follows: the provinces had been told clearly that the seventh NFC Award was only sustainable if tax revenue worth an additional three per cent of GDP was raised in the next three years; the unworkability of the award without the addition tax revenue had been clearly discussed with the provincial finance ministers; it was hoped that an integrated goods and services value-added tax would be brought about; the expectation was that the NFC Award would lead to fiscal decentralization, with provinces enacting local governments and setting up provincial finance commission to finance them; and so on.”
 
Editorial, ‘
Gwadar outrage
Dawn, 10 May 2024
“The apparent aim of these reprehensible acts is to foment ethnic unrest by targeting individuals of a certain ethnicity or regional background. While locals in Balochistan should be given preference in jobs, there can be absolutely no justification for targeting workers from outside the province trying to make an honest living there. Most of the victims are driven by poverty to leave their homes and families behind just to ensure their loved ones have food on the table.”
 
Editorial, ‘
Again salaried class?
The Express Tribune, 9 May 2024     
“The IMF’s new tax prescription for the salaried class is simply irrational, and will lead to revulsion. It is quite unfortunate that the lender, as well as successive governments, only believe in burdening an already obliterated section of society duly contributing to the revenue generation. Whereas, there is no dearth of holy cows, especially the big businesses including the real estate and agriculture, who are widely off the tax hook and are rather found to be on the beneficiary side of subsidies and exemptions. Thus, the proposal to tax the salaried and business individuals at a single income threshold is unfair, to say the least.”
 
Editorial, ‘
Balochistan unrest
The News International, 10 May 2024
“There is a lot of trust deficit between the residents of this province and the state, which has a history dating back decades. The idea of Pakistan as a federation is not to dismiss the grievances of smaller provinces but to give equal rights and autonomy to all provinces. Unfortunately, the people of Balochistan are still yearning for equal rights. A dialogue between all political stakeholders of Balochistan should be held as Zardari has announced because only an open and frank dialogue can lead to something substantial.”

 



 

 

“The current situation is the result of the choices that we have made and are still making”
-An opinion in Dawn, ‘
Education emergency