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Gas tariff set to increase by up to 100%

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  • Summary for new gas tariffs finalised, sent to ECC for approval.
  • Gas sector’s circular debt reached Rs2,700 billion.
  • Up to 1 mmBtu usage price to go up from Rs2,000 to Rs3,500.

KARACHI: The gas tariffs are set to go up by up to 100% for different categories of consumers in line with the conditions of the International Monetary Fund (IMF) to control the mounting circular debt, The News reported on Tuesday.

According to the report, the summary for new gas tariffs has been finalised and submitted to the Economic Coordination Committee (ECC) for approval.

Sources said that once the summary sailed through the ECC, it would be submitted to the federal cabinet. “The new rates would be applicable with effect from Oct 1 after the federal cabinet’s approval,” they said.

The gas sector’s circular debt has reached Rs2,700 billion. 

According to the proposal, up to 1 mmBtu usage price to go up from Rs2,000 to Rs3,500. The sources noted that circular debt would increase by Rs46 billion if gas prices were not hiked by the end of the current financial year and the shortfall of the companies will be in the vicinity of Rs185 billion.

The proposal encompasses a substantial adjustment in fixed monthly charges for protected gas consumers.

Under the plan, it is expected that domestic consumers will be burdened with a hefty 100% increase in gas charges, while other consumers might face a proposed hike of 198.33%.

These tariff adjustments are part of the caretaker government’s strategy to address the persistent circular debt issue and fulfill commitments to the Fund, the sources said.

They said the decision would naturally fuel inflation in Pakistan, which is already at a record-high level thanks to the constant increase in fuel and energy tariffs, resulting in higher food prices, however, the gas price hike is a key condition of the IMF programme. 

As the new tranche is to be released in November, the gas sector’s circular debt reduction is a must under the IMF condition, which can be done only through a hike in gas prices.

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The economic outlook for Pakistan. Report: The Economy Will Continue Its Sustainable Recovery

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Stability in the external and fiscal sectors, along with large financial inflows, have helped Pakistan show a steady recovery in the first quarter of FY2024–25.

The October economic outlook from the Finance Ministry emphasizes encouraging developments, such as the 1.03 billion dollar first tranche from the IMF’s extended financial facility, which improves macroeconomic stability.

A 3.7 percent increase in total fertilizer production and a 115.9 percent increase in imports of agricultural gear are significant achievements.

In August 2024, large-scale manufacturing grew 4.7 percent month over month, even if it decreased by 0.2 percent in July and August of the same year.

September 2024 had a 44-month low of 6.9 percent consumer price index inflation, down from 31.4 percent the year before.

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The FBR prohibits additional extensions to the income tax return filing deadline.

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The FBR has rejected a second extension of the deadline, which is due today (October 31), after two extensions were granted.

Over 5.01 million returns have been filed thus far, and the tax returns process has generated over Rs125 billion in revenue, according to FBR officials.

Taxpayers have been instructed by the tax authority to submit their returns by midnight tonight. Identification of non-filers or late filers will begin on November 1.

When late filers buy a car or a piece of real estate, they will pay double taxes.

Officials stressed the need for people making Rs 50,000 a month to file income tax reports. Those who don’t comply will be labeled late or non-filers.

According to the body officials, non-filers may have their gas and electricity supplies cut off, have their international travel restrictions revoked, and have their SIM cards on their phones disabled.

The Federal Board of Revenue (FBR) extended the final day for filing income tax returns to October 31 on October 14.

The decision takes bank holidays into account and was made in response to demands from tax bar groups and trade organizations.

The Income Tax Ordinance 2001’s Section 214A extended the deadline, giving taxpayers more time to submit their forms.

A number of trade associations and tax bar associations had previously asked FBR to extend the deadline for filing income tax returns for the fiscal year 2024 from September 30 to October 14.

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Malir Industrial Park is introduced by SIFC.

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The establishment of “industrial parks” by the Pakistan Economic Zone Development and Management Company and the Special Investment Facilitation Council aims to attract investors and stimulate the economy.

First up is the Malir Industrial Park, which gives companies access to important trade and transportation channels. This park will be different from heavy industry parks in that it will concentrate on small industries and diverse industrial offices. Among Karachi’s industrial zones, it would be noteworthy for providing security and necessary infrastructure.

In order to lower unemployment, the initiative intends to generate more than 200,000 jobs in the first five years. To increase the advantages of the program, the Korangi Association of Trade and Industry will become a member of the Malir Industrial Park Advisory Council.

The park will have easy access to Karachi Port and Jinnah International Airport due to its strategic location at the convergence of key highways, such as the National Highway and Malir Motorway. This would guarantee effective access to both domestic and foreign markets.

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