Interior Ministry appeals against acquittal of Khan and Qureshi in Cipher case; Pakistan turns down invitation to Ukraine Peace Summit
In Brief
PROVINCES
Punjab: Budget for FY25 unveiled amid protests by opposition
On 13 June, the Punjab government led by PML-N presented its annual budget for FY25 worth PKR 5.45 trillion with a surplus of PKR 630 billion. Despite pressures from the IMF, the budget did not hint at taxes for the agriculture and real estate sectors. The IMF had called for taxes on the agricultural sector on par with normal personal income tax rates. The budget speech in the Punjab assembly was delivered by Punjab Finance Minister Mujtaba Shujaur Rehman, and witnessed significant allocations spanning from education to the introduction of news schemes like laptop and Kissan card initiatives. Rehman noted the surplus budget is for the implementation of the roadmap set by Punjab’s Chief Minister Maryam Nawaz in her first 100 days of the government. He stated: “Today, we have begun the development of the province. Today, we are presenting Punjab’s biggest ever tax-free and surplus budget.” The budget also included provisions for the distribution of solar panels free of cost. Further, the government imposed a 25 per cent increase in the salary of government employees (grades 1 to 16), 20 per cent salary raise for the officers (grades 17 to 22), and a 15 per cent increase in pensions. The minimum wage was also increased from PKR 32,000 to PKR37,000, along with an increase in various provincial fees, court fees, and taxes.
Amendments to the Punjab Urban Immovable Property Tax Act of 1958 will introduce a self-assessment mechanism, and the government will have the power to declare any property as a high-value property. Property owners will be given a procedure based on which they can self-assess their proerpty, though this will be subject to an audit by an assessing authority. Any attempt to underpay or evade tax would result in a fine.
The Punjab government allocated the largest portion for the health sector, particularly for the revamping of public hospitals, disease screening for children, and upgrading hospital infrastructure. The government allocated PKR 86 billion to the Specialised Health Care and Medical Education Department and PKR 42.6 billion to the Primary and Secondary Healthcare Department. PKR one billion has been kept separately for the Punjab Institute of Mental Health’s renovation of old blocks. In addition, PKR 30 billion was allocated for consultation services of Narowal Medical College. The budget includes PKR 450 million for ICU facilities in the Children’s Hospital at Lahore, PKR 100 million for setting up a Project Management Unit, PKR 2.5 billion for revamping Rural Health Centres (RHCs), and PKR 5 billion for upgrading Basic Health Units (BHUs) in North and Central Punjab.
In response, the opposition rejected the proposed budget, chanting slogans and protests. As the uproar escalated, Minister Sohaib Bharat and MPA Ghazali Saleem Butt intervened to stop the opposition from reaching the government benches. However, physical confrontations between two ministers and opposition members took place. The budget papers were ripped and were criticized as a “fraudulent budget” by the opposition. (“Punjab allocates Rs128.6b for healthcare,” The Express Tribune, 14 June 2024; Khalid Hasnain, “Punjab unveils Rs5.45tr surplus budget,” Dawn, 14 June 2024; “Opposition denounces Punjab budget,” Business Recorder, 14 June 2024)
POLITICS
Interior Ministry appeals against acquittal of Imran Khan and Shah Qureshi in Cipher case
On 13 June, the Interior Ministry challenged the acquittal of Imran Khan and former foreign minister Shah Mahmood Qureshi in the Cipher case before the Supreme Court. It argued that the Islamabad High Court (IHC) did not have the authority to hear the case and claimed that “overwhelming evidence” was neglected. The appeal detailed that the provision of lodging an appeal against the special court’s judgment is illegal under the Official Secrets Act of 1923. The appeal stated: “It is an established principle of law that where the legislature has not provided something in the language of the law, the court cannot travel beyond its jurisdiction and read something to the law as the same would-be ultra vires the powers available to the court under the Constitution and would constitute an order without jurisdiction.” It also argued that Khan and Qureshi were not cooperative during the trial and claimed the counsels of accused were not cross-examined the witnesses. It added that the “respondents tried to defeat the cause of justice by indefinite procrastination,” and alleged that the IHC negated these aspects. The appeal further noted that the prosecution’s “documentary evidence along with the forensic analysis” was not appreciated by the IHC. It urged the Supreme Court to schedule its appeal for hearing and stated “the IHC has not appreciated the evidence available on the record as well as the admission of the accused, while acquitting the respondents, as such the impugned judgment is not sustainable in the eyes of law.” (“Jehanzeb Abbasi, “Imran, Qureshi’s acquittals in cypher case challenged in SC,” The Express Tribune, 14 June 2024)
NA speaker constitutes 40 Standing committees after three month delay
On 13 June, the National Assembly Secretariat announced that the National Assembly Speaker, Ayaz Sadiq, constituted 40 standing committees including the Public Accounts Committee (PAC). Sadiq also finalized the list of members’ names of the committees according to the motion adopted in the National Assembly on 17 May. PML-N sources said to Dawn that the opposition Sunni Ittehad Council (SIC) would get the chairmanship of ten committees, including the PAC. They added that the PML-N would get the chairmanship of 13 committees, while the PPP and the Muttahida Qaumi Movement-Pakistan (MQM-P) would get eight and two committees’ chairmanship respectively. The remaining committees are to be divided among the ruling coalition. Further, the Senate chairman will nominate eight senators for the committee. While the announcement took three months, as per rules, it should have occurred 30 days after the prime minister’s election. Though the delay is not a violation of any rules, it will affect the legislature’s procedures. (Amir Wasim, “Public Accounts Committee, 39 other NA panels constituted, finally,” Dawn, 14 June 2024)
KP government asks military generals to reveal their assets
On 13 June, Dawn reported that the Khyber Pakhtunkhwa (KP) government asked the armed forces to clean their backyard and the generals to reveal their assets. Retired Brigadier Mohammad Musaddiq Abbasi, the special assistant to the chief minister on anti-corruption, argued: “Military lives and dies in Pakistan and if [the generals] shift their assets outside the country, what will be the level of the businessmen’s confidence.” He pointed out that some retired generals were involved the in Dubai leaks, while there was no mention about Imran Khan in any leak. Abbasi warned a case would be lodged under the Anti-Money Laundering Act, 2012 if any individual’s source of income was unknown and the transfer of money outside Pakistan was done illegally. (“CM Gandapur’s aide asks army generals to declare assets,” Dawn, 13 June 2023)
ECONOMY
Budget to provide no relief for heavy taxpayers due to limited fiscal space
On 13 June, the PML-N-led coalition government declared its inability to provide any relief for the heavily burdened taxpayers of the salaried class and the support for the health and education sectors, due to the staff-level agreement with the IMF for a fresh bailout. Finance Minister Muhammad Aurangzeb highlighted tax leakage worth of PKR 1.2 trillion occurring through the sales tax regime and the track-and-trace system for tobacco, sugar, cement, fertilizer. Since there was no “fiscal space,” there would be no possibility for a social contract between taxpayers and the state. Aurangzeb noted that the PKR 20 per litre increase in petroleum levy on oil products proposed in the budget would be implemted gradually, while promising “good news soon” about energy tariffs for the industrial sector. The budget will also focus on expanding the tax base through digitalization, in the hopes of increasing the tax-to-GDP ratio from ten to 13 per cent. He assured the abolition of devolved ministers will take place in two months which will create some fiscal space. The finance minister and his team did not respond to the questions regarding their inability to cover income from agriculture and the Dubai leak’s insufficient action. (Khaleeq Kiani, “BUDGET 2024-25: No relief in sight due to limited fiscal space,” Dawn, 14 June 2024)
Delegation of the US Treasury Department discusses wind project tariffs
On 13 June, a US Treasury Department delegation on a two-day visit to Pakistan held talks around evaluating Pakistan’s economic situation, IMF’s new programme forecasts, and general business and investment climate. The delegation, led by Assistant Secretary Brent Neiman, discussed the power sector issues such as circular debt. Business Recorder reported that as per sources, the US and Pakistan have serious issues with wind project tariffs. The US has taken this to the highest level and informed Pakistan that unless the tariff issues for five wind power projects are resolved, there will be no investments from the US International Development Finance Corporation (DFC). The Federal Minister for Power, Sardar Awais Leghari, asserted that the reform plans are under process to remove the deficiencies in the power sector. He underlined these reforms are intended to increase private sector participation in the distribution and transmission of electricity in Pakistan and the quality-of-service improvements. He also stressed the importance of US assistance in securing international financing for Pakistan’s power sector. (Mushtaq Ghumman, “Wind projects’ tariff issues stay unresolved: Islamabad should not expect any investment from DFC: US team,” Business Recorder, 14 June 2024)
EXTERNAL
Pakistan turns down invitation to Ukraine Peace Summit
On 13 June, Foreign Office (FO) Spokesperson Mumtaz Zahra Baloch declared that Pakistan decided to turn down Switzerland’s invitation to the Ukraine Peace Summit due to factors like scheduling challenges. The summit is being held from 15 June to 16 June near the city of Lucerne in Switzerland, and is aimed at garnering international support for Ukraine’s vision of peace. Pakistan’s decision has been looked at as a diplomatic move to continue its neutrality in the conflict, particularly since Russia is not participating in the conference. Baloch stated: “We reiterate our call for an immediate cessation of hostilities and stress the need for diplomacy and dialogue for an early negotiated end to the conflict between Ukraine and Russia.” She also emphasized Pakistan’s support for the “universal and consistent application of UN Charter principles, including non-use or threat of use of force, respect for sovereignty and territorial integrity of states, pacific settlement of disputes, and equal security for all states.”
Separately, Baloch refuted Delhi’s allegations accusing Pakistan of being invovled in the recent violence in the Kashmir region and stated; “The Indian occupation authorities and media have a habit of making such irresponsible statements. No one takes these allegations seriously.” Additionally, she welcomed the report of the UN Independent International Commission of Inquiry on the Occupied Palestinian Territory including East Jerusalem and Israel. Baloch called on “global conscience to force Israel towards an immediate and unconditional ceasefire,” and underlined the importance of bringing “an end to the war on the people of Gaza.” (Baqir Sajjad Syed, “Neutral’ Pakistan will skip Ukraine summit in Switzerland,” Dawn, 14 June 2024)
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Imran Riaz Khan himself had said, if the call for Hajj comes from God, then no force can stop that person from performing Hajj. This hypocritical person has now come to use our beloved religion. When you know that the name is in ECL, why go to the airport again and again? God save us from hypocritical people.
- Saad Kaiser
Islamabad: Pakistan Peoples Party Chairman Bilawal Bhutto Zardari PPP Khyber Pakhtunkhwa President Muhammad Ali Shah Bacha, General Secretary Shazi Khan, Khyber Pakhtunkhwa Governor Faisal Karim Kundi, Coordination Secretary Farzand Ali Wazir, former Member of Assembly Najamuddin Khan, Humayun Khan and Member of National Assembly Qasim Gilani met at Zardari House, on this occasion the political situation of the country was discussed.
- PPP
The fight against terrorism belongs to all of us today, as a result of the excellent performance of the law enforcement agency CTD Balochistan, significant success has been achieved. To continue this success, we all have to play our part. Well done CTD Balochistan!
- Sarfraz Bugti
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Tariq Parvez, ‘Tackling the lethal troika’
Dawn, 14 June 2024
“It might be a cliché to state that a poor and divided nation is likely to find it difficult to counter a serious challenge to its security. But sadly, that is what Pakistan looks like today. The political polarisation is unprecedented, economic conditions are dire and getting worse, and social cohesiveness is at its lowest. All this saps resolve and the capability to fight terrorism. Therefore, the essential starting point for Pakistan in its war against the lethal troika is to set its own house in order by resolving its political polarisation, alleviating the common man’s economic woes, and moving towards building a more cohesive society through a government trusted by its citizens, and by improving the rule of law, adherence to fundamental rights, and accountability.”
Muneeb Shah, ‘Inside Pakistan’s oil smuggling paradox’
The Express Tribune, 13 June 2024
“The government’s narrative that “oil smuggling needs to be stopped as it threatens the local economy”, is disconnected from reality. In Pakistan, as well as in Balochistan and Iran, individuals respond to formal and informal incentives within socio-economic constraints. Not to forget, importing petroleum products significantly burdens Pakistan’s fragile economy, as these products account for over 30% of the country’s import bill. Taxes and margins add 35% to 45% to their original price, raising both the general price level and the demand for alternative fuel sources. It is pertinent to note that nearly one million people of Balochistan live within 50 km distance of the international border. The total number of households living within this distance is estimated to be 0.1 million. Up to 2 million people, known as kolbars, depend directly on this trade, using thousands of zamyads (vehicles) and khaiks (ships). This trade is ubiquitous in Balochistan, and border closures consequently leave millions jobless with no alternative viable income sources.”
Omar Quraishi, ‘Budget FY25: Test of fiscal discipline’
The News International, 14 June 2024
“In the good old days, a common practice was to overstate revenue estimates, understate proposed expenditures, and at least in the budget documents adhere to the fiscal deficit target agreed upon with the IMF. However, the numbers presented in the budget for the outgoing fiscal year were immediately challenged by multilateral lenders who termed them unrealistic and over-ambitious. Consequently, the government had to revise the finance bill numbers before getting it passed by the National Assembly. Unlike previous years, there was no room for shortcuts in preparing the budget for 2024-25. This budget is a quasi-prior-action to initiate negotiations with the IMF for the next extended fund facility programme (next loan). Convincing the IMF, the lender of last resort, of Pakistan’s commitment to implementing economic reform is crucial for Pakistan. The budget serves as a litmus test for this commitment.”
Editorial, ‘New talks?’
Dawn, 14 June 2024
“Admittedly, there have already been quite a few efforts to ignite some kind of rapprochement between the two factions, and none has borne any fruit. Yet, we must not give up hope: hope that Imran Khan has finally realised that he must share the future with men and women he does not like and may even despise, and hope that the Sharifs and the Zardaris have realised that they cannot keep their legacy intact with the kind of abominable mistakes they have made in recent years. It has been quite frustrating that the future of the federation has lain in the hands of these politicians all along, and yet they have done everything to demonstrate their unworthiness for the immense responsibility entrusted to them by the public. It is hoped that they finally realise that they must set down new rules for political engagement and then abide by them, come what may. Politics is, after all, an evolving art. There are lessons aplenty in the experiences shared by these parties that can enable them to envision a better, fairer future together. They must demonstrate that the public’s expectations of them are met.”
Editorial, ‘The taxed and the untaxed’
The News International, 14 June 2024
“As much as people hate them, taxes are something no one can – or should – escape from. A burden of Rs3.8 trillion on the government makes us perpetually in need of foreign loans, which often come at a huge cost. Not only does that force us to listen to lenders’ diktats, but it also hurts our image in the world. Rebates/tax exemptions are vital for improving economic activities. Almost all countries use them, but they do have a phasing-out plan after a certain period. Take the UAE, for example; its no-taxes feature attracted thousands of businesses to the small oil state. Now, diversifying its economy, it has introduced several new taxes. For so long, Pakistan’s tiny elite has enjoyed tax exemptions. It is unfair to the people – including the salaried class that keeps getting crushed under the burden of taxes – to keep financing the lifestyle of the privileged few. In a country where a majority lacks access to a good transportation network, low taxes for luxury vehicles are criminal. Pakistan has a problem of conspicuous consumption where the elite want to spend on things that they think are essential to boost their financial wellbeing. This ostentatious display of wealth then demands the government to go lenient on sectors. This cannot go on for long. Even the criticism raised against the taxes rests on the shoulders of the invisible consumers who, according to critics, will find it difficult to bear the end prices hiked by new taxes. What they choose to ignore is the second option they can take: reduce their profit margin for a few years, which is usually in addition to the salaries and drawings extracted by business owners. While it is true that taxes are rarely celebrated, it is important to say yes to programmes that pave the way for fair taxation.”
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