Provinces to get 17pc additional share from federal divisible pool

By Ghulam Abbas

While center has been crying for short of revenue to meet rising expenses after the 18th amendment in constitution, the provinces are set to receive 17 per cent more share from the federal divisible pool in the next financial year as the government has estimated to transfer Rs4.099 trillion to the four federating units as compared to Rs3.511tr last year.

As per the budget documents, Punjab will get over 50 per cent of the share from the federal divisible pool leaving behind the same amount to be distributed among the three remaining provinces, shows a document of the federal budget for the financial year 2022-23.

According to the budget document, out of the total Rs4.099 trillion estimated federal divisible pool for the next fiscal year starting from July 1, Punjab will get Rs2.029tr, followed by Sindh which will receive Rs1.029tr. The two other smaller provinces Khyber Pakhtunkhwa (KP) and Balochistan will get Rs670.46 billion and Rs370.23 billion, respectively.

In the outgoing financial year, the provinces have received Rs3.511tr from the federal divisible pool whereas the Pakistan Tehreek-i-Insaf (PTI) government while presenting the federal budget had estimated the provincial share as Rs3.411tr.

In the outgoing financial year, Punjab had got a lion share from the federal divisible pool amounting to Rs1.74tr. Sindh’s share from the divisible pool was Rs873 billion, followed by Rs575bn for Khyber Pakhtunkhwa and Rs322bn for Balochistan.

The procedure for distribution of resources among the provinces has been spelt out in Article 160 of the Constitution, which provides for setting up of the National Finance Commission (NFC) with intervals not exceeding five years. The mandate of the NFC is to make recommendations to the president for distribution of resources between the federal and provincial governments.

Govt proposes massive increase in levy on import of mobile phones

By Ahmed Ahmadani

The government has proposed heavy increase in a new levy upto Rs16,000 on the import of mobile phones through the Finance Bill, 2022. According to the Finance Bill, there shall be a mobile handset levy at the rates specified on smartphones of different price categories. And, the government has estimated a revenue of Rs10 billion from the levy on the import of mobile handsets. As per the proposal, there will be a levy of Rs100 per set on a mobile phone with cost and freight (C&F) value of up to $30. The rate of levy per set on mobile phones having a C&F value between $30 and $100 will be 200. The rate of levy per set on mobile phones having a C&F value between $101 and $200 will be Rs600. Similarly, the rate of levy per set on mobile phones having a C&F value between $201 and $350 will be Rs1800. The rate of levy per set on mobile phones having a C&F value between $351 and $500 will be Rs4000. The rate of levy per set on mobile phones having a C&F value between $501 and $700 will be Rs8000. The rate of levy per set on mobile phones having a C&F value of above $701 will be Rs16000.

Govt allocates Rs183.215bn funds for 87 water projects

By Ahmed Ahmadani

During his budget speech, Miftah Ismail said that bringing improvement in electricity generation, transmission and distribution was the government’s top priority, announcing that the government had earmarked funds amounting to Rs183.215 billion for 87 ongoing and new schemes of the Water Resources Division. According to federal government’s budget documents for Financial Year (FY) 2022-23, an amount of Rs180,015.465 million has been allocated for 74 ongoing schemes, and Rs3,200 million for 13 new projects. The ongoing schemes include 13 hydel and 61 water sector projects, whereas there are only 13 new projects. As per details, the allocation of ongoing hydel projects includes Rs55,383 million for Dasu Hydropower Project (2,160 MW), Rs12,083 Neelum Jhelum Hydropower Project (696 MW), and Rs12,000 million for Tarbela 5th Extension HydroPower Project (1,410 MW). Similarly, for the ongoing water sector projects, Rs20,000 million each has been allocated for Diamer Basha Dam Project and K-4 Greater Water Supply Scheme (260 MGD), Rs12,060 million for Mohmand Multipurpose Dam Project, Rs7,000 million for Diamer Basha Dam Project (Land Acquisition and Resettlement), and Rs5,000 each for Nai Gaj Dam Project Dadu (Sindh) and Kachhi Canal Project (Phase-I) Dera Bugti, Naseerabad, Bolan and Jhal Magsi. It is also learnt from the budget documents that the major allocation for new schemes includes Rs500 million for Chashma Right Bank Canal Left Cum Gravity Project and Rs300 million each for construction of five Small Dams Salari-2 Dam, Rai Jo Da Dam, Shalmani Dam, Garwari Dam and Amari Dam in Kohistan Dadu, for construction of six dams including Densi, Kcodal, Kambowah, Khiropora and others; for construction of six smalls dams in District Zhob and Sherani, and others projects. According to budget documents of FY 2022-23, the government has earmarked Rs73 billion for the power sector keeping in view the importance of energy for development of the country. Miftah Ismail also said in his speech that out of total allocation, a sum of Rs12 billion would be spent for early completion of Mohmand dam. The project would benefit both the agriculture sector and the farmers.

The minister said that Pakistan was facing acute energy shortage. Thermal energy has become expensive due to skyrocketing prices of imported fuel. Promotion of renewable energy was a possible way forward to cope with such a situation, he added.

He said it was proposed to exempt sales tax on import of solar panels and local supply. Moreover, through banks, easy loans would be provided to consumers using less than 200 units for purchasing solar panels, he said. Miftah said it would not only promote environment friendly energy in the country but also help reduce import of expensive oil and gas. the property and 2% by the ‘Non-Filers’ it is suggested that for ‘Filer’ it should be reduced to .25% (point Two Five Percent) and for non-filer, it should remain 2% (Two Percent). Capital Gain Tax- For Immovable Property The maximum period for determining gain tax may be fixed at 3 years instead of 4 years, with a 5% (Five Percent) flat rate.

Reduction in the maximum period for determining Gain tax to 3 years with 5% (Five Percent) will enhance the Sale/Purchase activity and boost the economy. Real Estate Regulatory Authority RERA The government has passed Real Estate Regulatory Authority (RERA) bill 2020 from National Assembly and Senate for Capital Territory (ICT) only, but still not implemented. If it is implemented then at least 70 to 80% of issues in the Real Estate Sector will be settled.

There is a dire need for the formulation of RIM and its proper implementation just on the lines of other developed countries. Such a step by the government will facilitate removing different hurdles in the Real Estate Sector.

Special Relief Package For Real Estate Sector It is suggested that strong measures/announcements from the Prime Minister should be made to further boost the prevailing Real Estate Sector. In this regard, Membership fee, Transfer fee, and Possession/Site Plan charges must be reduced at least 50%. The government should legalise the Two Percent (2%) service charges (Commission) on the Sale/purchase transactions from each side and One (1) Month Rent on Lease/Rental deals from each side by ordering all registration/Mutation/Transferring Authorities and Societies. It is strongly emphasised that keeping these considerations while finalising the Federal Budget 2022-23 for the Real Estate Sector. n

Govt may collect Rs50bn from 3G/4G License Renewal

By Ahmed Ahmedani

The government has budgeted Rs50 billion for 3G/4G license renewal under the head of non-tax revenue for the next fiscal year 2022-23. According to the budget documents 2022-23, under the head of income from property and enterprise (Pakistan Telecommunication Authority (Surplus), the government has projected to generate Rs9 billion in the upcoming fiscal year against the budgeted Rs4 billion for the outgoing fiscal year which was later revised to Rs3 billion for 2021-22. The Pakistan Telecommunication Authority (PTA) is mandated to regulate the establishment, operation and maintenance of telecommunication systems and provision of telecommunication services in Pakistan, to dispose of applications for the use of radio-frequency spectrum, and to promote and protect the interests of users of telecommunication services in Pakistan along with ensuring the availability of a wide range of high quality, efficient, cost-effective and competitive telecommunication services throughout the country. It is also tasked with promoting the rapid modernization of telecommunication systems and telecommunication services, to investigate and adjudicate on complaints and other claims made against licensees arising out of alleged contraventions of the provisions of the Act, the rules made and licenses issued thereunder and take action accordingly.

It is pertinent to mention that PTA receives fees for the issuance and renewal of various telecom licenses. It also imposed fines, and penalties for violations. n