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Indian lobby at WB frustrates Pakistan

Pakistan and the World Bank have failed to reach an agreement on a way forward to address the former’s concerns over violation of the Indus Waters Treaty by India, as a strong Indian lobby in Washington again frustrated the latest push to stop New Delhi from violating the treaty.

“An agreement on the way forward was not reached at the conclusion of the meetings” between the Pakistani delegation and the World Bank officials, announced the Washington-based lender on Wednesday.

It added that several procedural options for resolving the disagreement over the interpretation of the Indus Basin Treaty’s provisions were discussed by both the parties.

“While an agreement on the way forward was not reached at the conclusion of the meetings, the World Bank will continue to work with both the countries to resolve the issues in an amicable manner and in line with the treaty provisions,” stated the World Bank.

But a Pakistani official who attended the meetings claimed that the World Bank has assured to bring resolution to the longstanding dispute. He added that Pakistan lodged the protest in the strongest possible words.

Senior World Bank officials met on May 21-22 with a delegation from the government of Pakistan at their request to discuss the issues regarding the Indus Waters Treaty and opportunities within the treaty to seek an amicable resolution.

Pakistani delegation, led by Attorney General of Pakistan Ashtar Ausaf Ali, met with Kristalina Georgieva, World Bank Chief Executive Officer, and the regional management for South Asia.

The delegation of the Government of Pakistan also shared with the bank their concerns about the recent inauguration of the Kishanganga hydroelectric plant.

The Pakistani delegation had rushed to Washington after Indian Prime Minister Narendra Modi inaugurated the 330-megawatt Kishanganga hydroelectric power plant in Indian Occupied Kashmir (IoK).

The Kishanganga project has the potential to disrupt flows, which will also adversely affect the recently constructed 969MW Neelum-Jhelum hydropower project.

Pakistan has maintained that the dam violates the World Bank-mediated treaty on the sharing of the Indus River and its tributaries upon which 80% of its irrigated agriculture depends.

The disagreement serves a serious blow to Pakistan that remains unable to penetrate in the World Bank, which is under heavy influence of the Indian lobby working in Washington. The South Asian department of the World Bank is also under the influence of the Indian lobby.

Over the years, successive governments kept a blind eye over a growing Indian influence in international financial institutions. The governments have been sending retired and serving bureaucrats from the Pakistan Administrative Service (PAS) Group to fill technical posts in these important global bodies, which affected the country’s position.

A retired PAS officer is currently executive director in the Asian Development Bank in Manila. A former National Highway Authority chairman is now Pakistan’s executive director in the World Bank.

The post of senior adviser to the IMF executive director is vacant for last over one year due to tussle over appointment of a blue-eyed PAS officer in Washington.

To the disappointment of Islamabad, the World Bank also stated that “as a signatory to the Treaty, the World Bank’s role is limited and procedural”.

In particular, the role in relation to ‘differences’ and ‘disputes’ is limited to the designation of people to fulfill certain roles when requested by either or both parties, it added.

Subscriptions increase by 2 mn

Pakistan witnessed an increase of around 2 million subscribers of mobile broadband service in April, which now amount to 55 million compared with 53 million in March, according to data released by the Pakistan Telecommunication Authority (PTA). Overall, the number of broadband users in Pakistan reached 57 million. Out of the total broadband users, 55 million are 3G/4G subscribers. The data showed that Jazz led the way with 55.43 million subscribers, followed by Telenor’s 43.48 million, Zong’s 31.07 million and Ufone’s 20.20 million subscribers. Ufone increased its subscribers last month to 19.89 million.

Bilateral trade: Pak, UK vow to boost volume

Pakistan and the United Kingdom welcomed recent increase in the volume of bilateral trade and vowed to further boost collaboration between the two countries. Acting high commissioner Richard Crowder and deputy trade director Matt Lister from the British High Commission met officials of the Lahore Chamber of Commerce and Industry, including its president Malik Tahir Javaid and secretary general Shahid Khalil. The bilateral trade between the countries stood at £2.7 billion in 2016; however, they agreed that this figure should rise in the future. They agreed on the scope of growth in sectors such as finance, legal and business services and discussed the importance of reforms to make Pakistan an easier and more attractive destination for businesses.

Govt amends laws to improve mps perks, privileges

In a questionable move, the federal government has further enhanced perks and privileges of the sitting and former parliamentarians and their spouses by amending the two general laws through the Finance Act 2018. The acting President Sadiq Sanjrani has given his consent to Finance Act 2018 that includes amendments in Members of Parliament (Salaries and Allowances) Act 1974 and Chairman and Speaker (Salaries, Allowances and Privileges) Act 1975. Both these laws have been separately passed by the National Assembly and the Senate and do not fall in the Money Bill definition.

However, the Finance Act 2018 revealed that the government has inserted these amendments in the Finance Act at the eleventh hour, as changes in both the laws were not even part of the final Finance Bill that the Federal Board of Revenue (FBR) had tabled in the National Assembly last week.

All these additional perks and allowances were never debated at any stage of budget scrutiny either in the Senate Standing Committee of Finance or in the National Assembly. Salaries and allowances of the members of parliament, Senate chairman and speaker National Assembly are governed by these two laws.

Through an amendment in the Members of Parliament Act of 1974, the government has extended the free air travel by the parliamentarians to all the Pakistani airlines. Earlier, the parliamentarians’ entitlement was limited to only Pakistan International Airlines.

Each member of the parliament is entitled to avail up to Rs300,000 worth of free air travel within Pakistan. Through another amendment, the government has enhanced the business class travel for attending the assembly sessions from 20 trips to 25 trips from and to Islamabad from anywhere in the country. This is in addition to Rs300,000 air travel.

The government has also enhanced the medical facilities of the sitting and the former parliamentarians, bringing their facilities at par with the highest paid bureaucrat, serving in the grade-22.

A member and ex-member shall be entitled to the same medical facilities as are admissible to an officer of BPS-22 of the federal government, according to the new amendment.

There are 342 members of the National Assembly and 104 members of the Senate in addition to hundreds of former parliamentarians and their spouses.


Moreover, the government has also allowed the former parliamentarians and their spouses to retain “the gratis official (blue) passport”, which will make them entitled to VVIP treatment anywhere in Pakistan and in the world at the expense of the taxpayers.Not only that, the government has doubled the monthly honorarium of the chairmen of the standing committees from Rs12,700 to Rs25,000 per month. This is in addition to their monthly salaries and other perks and privileges.

A member elected as the chairman of a standing committee of a house shall, in addition to the salary, allowances and facilities admissible as a member will now be entitled to Rs25,000 honorarium, the services of a private secretary in basic pay scale 17, stenographer in basic pay scale 15, driver in basic pay scale 4 and one Naib Qasid in basic pay scale 1, telephone facility in the office to a limit of Rs10,000 per month and office accommodation with necessary furniture and equipment.

The acting president has also approved an amendment in the Chairman and Speaker (Salaries, Allowances and Privileges) Act, 1975, making the deputy speaker eligible for all the perks and privileges that are currently available to the Speaker.

“In section 18, after the word “Speaker”, the words “including a person who has held such office after election thereto”, shall be inserted,” said the new amendment.

In March this year, the government had also increased the daily allowance of parliamentarians by 71% in a bid to match it with that given to civil servants in the country. Accordingly, the ordinary and special daily allowance were increased from Rs1,750 to Rs3,000 and from Rs2,800 to Rs4,800 respectively, which is equal to the allowance offered to grade-22 officers of the federal government.

PAC suggests SC-led investigation into tobacco firms’ tax case

The Public Accounts Committee (PAC) has recommended a Supreme Court-led investigation to unmask those who have given a whopping Rs33 billion in benefits to two cigarette manufacturing companies by changing their tax structure.

PAC Chairman Syed Khursheed Shah took the decision on Wednesday on the basis of a special report prepared by the Auditor General of Pakistan on causes of decline in tax collection from the tobacco sector.

Pakistan’s tobacco sector is dominated by two major players – the Pakistan Tobacco Company (PTC) that controls 55% market share, and Philip Morris Pakistan Limited (PMPKL) that has a 43% share – according to the special audit report.

After the introduction of the third-tier tax structure in May 2017, the two major players shifted their famous brands to the lowest tax slab and sold their cigarettes with 50% reduction in federal excise duty, which enhanced their sales but revenues plunged, according to the audit report.

Against the previous two-tier structure, the FBR introduced a new tier with only Rs800 as federal excise duty, which was 50% less than the lowest previous rate.

The FBR did not place a restriction on shifting from the second highest slab to the lowest one that gave Rs32.9 billion benefits to PTC and PMPKL in the current fiscal year, according to the report. The PTC got a benefit of Rs24.2 billion and PMPKL benefitted by Rs8.74 billion, according to the auditors.

“There has been no benefit given to Philip Morris,” said a statement issued by the company. “The Federal Board of Revenue (FBR) has increased taxes more than the inflation rate in budget 2017-18. PMPKL is a compliant company, which pays its taxes.”

Gov committed to adopting digitisation

The government strongly believes in adopting digital technologies and innovative applications to enable cross-sector socio-economic development and achievement of sustainable development goals, said Minister for Information Technology and Telecommunications Anusha Rahman. She said that the Digital Pakistan Policy will serve as a catalyst towards a holistic digital ecosystem in the country with advanced concepts and components for rapid delivery of next generation digital services, applications and content. The minister said this after the cabinet approved the Digital Pakistan Policy on Tuesday.

Information technology: Rahman says start-ups being assisted

The policy aims to improve citizens’ quality of life and economic well-being by ensuring availability of accessible, affordable and reliable high quality ICT services.

Rahman said that with the approval of this policy Pakistan has taken a major leap towards adopting digitisation to accelerate socio economic development.

The fiscal and non-fiscal incentives will enable the IT industry to increase software exports, train more youth with technology, entrepreneurs, freelancers, innovation and digital e/m services.”

Prior to its submission, consultations with all relevant stakeholders were carried out. A formal inter-divisional consultation was also carried out by the ministry as per the government rules and regulations.

The policy also includes a specific chapter for the fiscal and non-fiscal incentives for the IT/IT enabled services (ITeS) industry, which were finalised in consultation with PASHA. Current incentives and promotional initiatives already in place for the sector include 100% foreign ownership allowed, 100% repatriation of capital and dividends (subject to SBP approval), IT & ITeS Export Income Tax exemption till June 2019 and Income tax holiday for Venture Capital companies/funds till June 2024, under Venture Capital Companies and Funds Management Rules, 2000.

Apart from the incentives announced in the budget 2017-18, benefits announced in the newly approved policy include extension of zero-rated tax regime on IT/ITeS exports till 2025, 5% cash reward on IT export remittances, reduction of sales tax to 5% on domestic revenues in Islamabad capital territories (ICT) and legislation for tech SEZs and new IT Parks.

These incentives will attract long-term investments, improve export remittances and increase new IT parks through technology SEZs throughout the country.

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