Govt to revisit salary tax relief

As the International Monetary Fund (IMF) completely rejected the proposed tax relief in the Personal Income Tax (PIT) to the tune of Rs47 billion, the government is left with no option but to consider making changes to the proposal.

While the Federal Board of Revenue (FBR) has given the relief to the salaried class earning up to 1.2 million rupees per annum, a media outlet qouted top official sources as saying that the IMF conveyed its clear reservations regarding the proposed rate for the PIT.

To provide relief to the urban middle class, the Fund wants that the relief be restricted only to people with up to Rs0.2 million earning per month and that tax rates should be jacked up later in other slabs.

Contrary to this broader agreement with the IMF during the sixth review under the PTI-led government which was placed as a structural benchmark under the Fund agreement, the FBR proposed relief to those who are earning up to one million rupees per month in salary in the budget for 2022-23 through Finance Bill 2022 in Parliament.

These proposed PIT rates, if not changed, could turn into a major blockade to strike a staff-level agreement with the IMF.

The IMF wanted increased revenue collection up to Rs125 billion by placing PIT in a progressive format but the government took steps another way round and made it impossible for both sides to strike a staff-level agreement under the $6 billion Extended Fund Facility with the existing proposal of PIT.

The Finance Bill 2022 proposed that the taxable ceiling up to Rs1.2 million will pay just Rs100 tax. Earlier, the salary earner up to Rs800,000 on a per annum basis would have to pay Rs10,000, up to Rs1.2 million Rs30,000 and up to Rs2 million Rs120,000. Under the proposed rate, the salary earner of Rs2 million per annum will have to pay only Rs56,000.

The salary earner up to Rs3 million used to pay Rs282,000 on an annual basis but now the proposed rate of the tax liability is reduced to Rs159,000.

The salary earner up to Rs4 million had to pay income tax of Rs470,000 but now under the proposed rate, the tax liability is reduced to Rs304,000. The salary earner up to Rs5 million had to pay a tax amount of Rs670,000 but under the proposed rate, the tax liability was reduced to Rs479,000.

The tax rates proposed under the Finance Bill 2022 continued providing relief up to Rs one million salary earner who had to pay Rs1.845 million tax amount but now under the proposed Finance Bill 2022, the tax liability was reduced to Rs1.554 million for salary income up to Rs one million per month.

In the remaining slabs up to Rs20 million, Rs40 million, Rs60 million, and Rs80 million, the proposed tax rates were revised upward.

When contacted, former Director-General Economic Reform Unit (ERU) Ministry of Finance, Dr Khaqan Najeeb, said the only way out of the stalemate with the IMF would be bringing changes to the proposed slabs that would be a pre-requisite to strike an agreement with the IMF. He explained the changes that the relief should be given to Rs0.2 million per month.

In the Finance Bill 2022, the FBR increased the limit of taxable ceiling from Rs600,000 to Rs1,200,000, and the number of slabs was reduced from 12 to 7 under the Personal Income Tax regime.

According to new slabs introduced for the salaried class, where taxable income does not exceed Rs600,000, there will be zero tax. Where the taxable income exceeds Rs600,000 but does not exceed Rs1,200,000, there will be a tax of just Rs100.

Where the taxable income exceeds Rs1,20,000 but does not exceed Rs2,400,000, there will be a tax of 7% of the amount exceeding Rs1,200,000.

Where the taxable income exceeds Rs2,400,000 but does not exceed Rs3,600,000, there will be Rs84,000 plus 12.5% of the amount exceeding Rs2,400,000 on a per annum basis. Where the taxable income exceeds Rs3,600,000 but does not exceed Rs6,000,000, the FBR will impose a tax of Rs234,000 plus 17.5% of the amount exceeding Rs3,600,000.

Where the taxable income exceeds Rs6,000,000 but does not exceed Rs12,000,000, the FBR will deduct Rs654,000 plus 22.5% of the amount exceeding Rs6,000,000. Where the taxable income exceeds Rs12,000,000, the FBR will charge a tax amount of Rs2,004,000 plus 32.5% of the amount exceeding Rs12,000,000 on a per annum basis.

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Punjab, KP to unveil budget today

The provincial government's of Punjab and Khyber Pakhtunkhwa (KP) are all set to present the budget for fiscal year 2022-23, with a development outlay of Rs683.5 billion and Rs 350 billion, respectively.

Punjab will unveil the provincial budget with a total allocation of Rs3.226 for the incoming fiscal year, with over Rs127 billion reserved for the health card and a 15% pay raise, The News reported Monday.

Meanwhile, the Punjab government has decided to appoint Sardar Awais Laghari to the portfolio of finance minister to present the budget in today's session summoned by Punjab Governor Balighur Rehman.

The government has planned an over Rs350 billion subsidy package in the budget, including Rs200 billion for flour subsidy and Rs134 billion for other subsidies.

A new subsidy of Rs15 billion is earmarked to the power consumers with up to 200 units consumption. Further, the subsidy on public transport will also continue.

The government intends to increase the subsidy on public transport to encourage people to use it and reduce personal vehicles to reduce petrol consumption.

Like the federal government, the Punjab government has also decided to increase salaries and pension of employees with a similar proportionate alongside merging the previous ad hoc increases into the basic salary.

By doing it, almost a 20% real time increase will be in the salaries.

The Punjab government will also continue the PTI’s flagship project of health card with a whooping allocation of Rs127.34 billion. According to the proposed plan, the total allocation for the Annual Development Plan (ADP) 2022-23 is Rs683.5 billion.

The health sector has the highest allocation with Rs173 billion, including Rs152 billion for specialised healthcare and medical education and Rs21 billion for primary and secondary healthcare.

The special initiatives/programmes have the second highest allocation of Rs110.5 billion, while the road sector has the third highest allocation with Rs78 billion.

The education sector’s total development allocation is Rs56.2 billion. School education gets Rs39 billion, higher education Rs13 billion, special education Rs1.2 billion and literacy and non-formal education Rs3 billion.

According to the proposed plan, Rs7.5 billion was earmarked for sports and youth affairs, Rs2.4 billion for population welfare, Rs1.6 billion for social welfare, Rs11.95 billion for water supplies and sanitation, while Rs900 million for women development.

 The government has planned to allocate Rs19.05 billion to local government and community development projects, Rs78 billion to roads and infrastructure, Rs27.63 billion to energy, Rs21.37 billion to urban development, Rs14.77 billion to agriculture, Rs4.5 billion to forestry, Rs990 million to wildlife, Rs1.1 billion to fisheries, and Rs500 million to food department development projects.

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Govt to revisit salary tax relief

As the International Monetary Fund (IMF) completely rejected the proposed tax relief in the Personal Income Tax (PIT) to the tune of Rs47 billion, the government is left with no option but to consider making changes to the proposal.

While the Federal Board of Revenue (FBR) has given the relief to the salaried class earning up to 1.2 million rupees per annum, a media outlet qouted top official sources as saying that the IMF conveyed its clear reservations regarding the proposed rate for the PIT.

To provide relief to the urban middle class, the Fund wants that the relief be restricted only to people with up to Rs0.2 million earning per month and that tax rates should be jacked up later in other slabs.

Contrary to this broader agreement with the IMF during the sixth review under the PTI-led government which was placed as a structural benchmark under the Fund agreement, the FBR proposed relief to those who are earning up to one million rupees per month in salary in the budget for 2022-23 through Finance Bill 2022 in Parliament.

These proposed PIT rates, if not changed, could turn into a major blockade to strike a staff-level agreement with the IMF.

The IMF wanted increased revenue collection up to Rs125 billion by placing PIT in a progressive format but the government took steps another way round and made it impossible for both sides to strike a staff-level agreement under the $6 billion Extended Fund Facility with the existing proposal of PIT.

The Finance Bill 2022 proposed that the taxable ceiling up to Rs1.2 million will pay just Rs100 tax. Earlier, the salary earner up to Rs800,000 on a per annum basis would have to pay Rs10,000, up to Rs1.2 million Rs30,000 and up to Rs2 million Rs120,000. Under the proposed rate, the salary earner of Rs2 million per annum will have to pay only Rs56,000.

The salary earner up to Rs3 million used to pay Rs282,000 on an annual basis but now the proposed rate of the tax liability is reduced to Rs159,000.

The salary earner up to Rs4 million had to pay income tax of Rs470,000 but now under the proposed rate, the tax liability is reduced to Rs304,000. The salary earner up to Rs5 million had to pay a tax amount of Rs670,000 but under the proposed rate, the tax liability was reduced to Rs479,000.

The tax rates proposed under the Finance Bill 2022 continued providing relief up to Rs one million salary earner who had to pay Rs1.845 million tax amount but now under the proposed Finance Bill 2022, the tax liability was reduced to Rs1.554 million for salary income up to Rs one million per month.

In the remaining slabs up to Rs20 million, Rs40 million, Rs60 million, and Rs80 million, the proposed tax rates were revised upward.

When contacted, former Director-General Economic Reform Unit (ERU) Ministry of Finance, Dr Khaqan Najeeb, said the only way out of the stalemate with the IMF would be bringing changes to the proposed slabs that would be a pre-requisite to strike an agreement with the IMF. He explained the changes that the relief should be given to Rs0.2 million per month.

In the Finance Bill 2022, the FBR increased the limit of taxable ceiling from Rs600,000 to Rs1,200,000, and the number of slabs was reduced from 12 to 7 under the Personal Income Tax regime.

According to new slabs introduced for the salaried class, where taxable income does not exceed Rs600,000, there will be zero tax. Where the taxable income exceeds Rs600,000 but does not exceed Rs1,200,000, there will be a tax of just Rs100.

Where the taxable income exceeds Rs1,20,000 but does not exceed Rs2,400,000, there will be a tax of 7% of the amount exceeding Rs1,200,000.

Where the taxable income exceeds Rs2,400,000 but does not exceed Rs3,600,000, there will be Rs84,000 plus 12.5% of the amount exceeding Rs2,400,000 on a per annum basis. Where the taxable income exceeds Rs3,600,000 but does not exceed Rs6,000,000, the FBR will impose a tax of Rs234,000 plus 17.5% of the amount exceeding Rs3,600,000.

Where the taxable income exceeds Rs6,000,000 but does not exceed Rs12,000,000, the FBR will deduct Rs654,000 plus 22.5% of the amount exceeding Rs6,000,000. Where the taxable income exceeds Rs12,000,000, the FBR will charge a tax amount of Rs2,004,000 plus 32.5% of the amount exceeding Rs12,000,000 on a per annum basis.

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Russia opens affordable 'McDonald's' outlets

McDonald's MCD.N restaurants opened their doors in Moscow once again on Sunday under new Russian ownership and a new name, "Vkusno & tochka," which translates as "Tasty and that's it."

The famous Golden Arches have been taken down and replaced with a new logo, resembling a letter "M", comprising two fries and a hamburger patty against a green background.

Chief executive Oleg Paroev said the new company had settled on the new name — a closely guarded secret — only the day before the launch.

There was some speculation on social media about how best to translate the new name into English. "Tasty and that's it" was broadly adopted, although another suggestion was: 'Tasty. Full stop.'

"Vkusno & tochka" reopened on Sunday in Pushkin Square in what was McDonald's first restaurant in Soviet Moscow in 1990, when it sold as many as 30,000 burgers, but the queue outside the restaurant was much smaller than three decades ago.

The chain will keep its old McDonald's interior but will remove any trace of its former name.

Initially, 15 rebranded restaurants will open in and around the capital, followed by another 200 restaurants by end-June and all 850 by the end of summer, executives said on Sunday.

The new owner said up to 7 billion roubles ($126 million) will be invested this year in the business, which employs more than 50,000 people.

McDonald's flagship Big Mac and other burgers and desserts such as McFlurry are missing, but other popular items are on a smaller menu and sold at slightly lower prices.

A double cheeseburger was going for 129 roubles ($2.31) compared with roughly 160 at McDonald's and a fish burger for 169 roubles, compared with about 190 previously.

Paroev said the chain would keep prices "affordable". He said they would likely rise due to inflation, but not higher than its competitors, he said.

Most ingredients come from within Russia, but some items weren't immediately available due to logistical difficulties and because some suppliers had left Russia. For instance, it needs to find a new soft drinks supplier after Coca Cola suspended business there.

Siberian businessman Alexander Govor has taken over the franchise operation through his firm GiD LLC. He had been a McDonald's licensee since 2015 and had helped the chain expand into remote Siberia, where he operated 25 restaurants.

Russian authorities have said McDonald's will have an option to buy its restaurants back in 15 years.

Govor told reporters on Sunday that the price he paid was "far lower than the market price" and had been a "symbolic" figure. The U.S. chain booked a $1.4 billion charge for the deal. McDonald's did not respond to a request for comment on the price.

Russia and Ukraine accounted for about 9%, or $2 billion, of McDonald's revenue last year.

McDonald's former Russian head, Paroev, is running the business. Until the takeover, he had worked for McDonald's for seven years, including as chief financial officer of the Russian business for six and a half years until November 2021, according to his LinkedIn profile.

He was appointed Russia's McDonald's CEO in February, weeks before Moscow sent tens of thousands of troops into Ukraine on Feb. 24.

Govor will retain the chain's tens of thousands of employees for at least two years, the U.S. company said.

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PIA to send flight to Syria in order to rescue Pakistani citizens

On the special directives of Aviation Minister Khawaja Saad Rafique, a Pakistan International Airlines (PIA) flight will depart for Syria tomorrow (Monday) to bring back Pakistanis stranded in the war-torn country due to the Israeli bombing of the Damascus airport.

The PIA finalised plans to send a flight to Syria after a request was made via a letter by the Pakistani envoy in Damascus. The letter was addressed to the PIA CEO and the Government of Pakitan.

In the letter, the envoy asked the national carrier to send its plane to the Syrian city of Aleppo as the airport in Damascus was unusable.

A statement issued by PIA said that the flights to bring back the stranded Pakistanis will leave on June 13 (tomorrow).

As per the plan, in the first phase, the Pakistanis in Damascus will be transported to Aleppo via a bus from where the PIA flight will bring them back.

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No one should think that the march has ended: Imran Khan

Former prime minister Imran Khan thinks that the "powerful quarters" are disturbed due to the ongoing political and economic crisis.

In conversation with journalists and anchorpersons on Saturday, the PTI chairman said the only way to ensure the ongoing crisis is resolved is for the government to hold elections.

The ousted prime minister said he had two options after his ouster in April — seek forgiveness from "powerful quarters" or fight his case in public.

"I decided to go to the people," Khan told journalists and anchorpersons, referring to his "Azadi March" and the protests that followed after his removal from power.

In the coming days, Khan said he would march to Islamabad and rebutted speculations that the "Azadi March" had come to an end. "No one should think that the march has ended."

The PTI chairman said he would hold a long march with "full force" after Supreme Court's orders as the party had knowledge of all matters and is prepared to face what was ahead of it.

"We have decided to fully confront the government's fascist tactics," the PTI chairman said, adding that after the budget for the next fiscal year, it seems that this government will remain in power for only a month and a half.

Khan added that the International Monetary Fund (IMF) would never accept the coalition government's budget and that global institutions were aware of the current set-up's "incompetency".

The ousted prime minister said IMF and other countries are aware that the public does not support the current government.

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No one should think that the march has ended: Imran Khan

Former prime minister Imran Khan thinks that the "powerful quarters" are disturbed due to the ongoing political and economic crisis.

In conversation with journalists and anchorpersons on Saturday, the PTI chairman said the only way to ensure the ongoing crisis is resolved is for the government to hold elections.

The ousted prime minister said he had two options after his ouster in April — seek forgiveness from "powerful quarters" or fight his case in public.

"I decided to go to the people," Khan told journalists and anchorpersons, referring to his "Azadi March" and the protests that followed after his removal from power.

In the coming days, Khan said he would march to Islamabad and rebutted speculations that the "Azadi March" had come to an end. "No one should think that the march has ended."

The PTI chairman said he would hold a long march with "full force" after Supreme Court's orders as the party had knowledge of all matters and is prepared to face what was ahead of it.

"We have decided to fully confront the government's fascist tactics," the PTI chairman said, adding that after the budget for the next fiscal year, it seems that this government will remain in power for only a month and a half.

Khan added that the International Monetary Fund (IMF) would never accept the coalition government's budget and that global institutions were aware of the current set-up's "incompetency".

The ousted prime minister said IMF and other countries are aware that the public does not support the current government.

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