SBP says S. Arabia extends term of $3bn deposit with Pakistan for another year: PM for strict steps to boost taxation, implement collection strategy

ISLAMABAD/ KARACHI: Prime Minister Shehbaz Sharif on Thursday directed the authorities concerned to ensure effective and swift taxation and take strict measures to implement the strategy for revenue collection.

The prime minister, who chaired a review meeting on the country’s economic situation and digitization of the Federal Board of Revenue (FBR), said that the Board’s digitization was a key component of the government’s agenda of economic reforms, according to a PM Office press release.

He appreciated the progress in FBR’s digitization and lauded the efforts of the finance minister, state minister for finance, FBR chairman and secretary of finance.

Expressing satisfaction over the increasing fiscal space, he said the efforts of the economic team were coming to fruition. The prime minister directed to complete the important tasks related to the FBR’s digitization by the end of this month.

He said that consequent to the crackdown against the smuggled fuel and reduction in petrol and diesel prices, the sale of petroleum products had reached 1.58 million metric tons -- the highest ever during the last 25 months. Instructing strict measures to curb petrol smuggling, Prime Minister Shehbaz said that 15% increase in the year-on-year sale of petroleum products showed the revival of the energy market.

He told the participants of the meeting that the timely decision for the sugar export brought in $500 million in remittance.

The meeting was told that the digitization of FBR’s value chain will be completed by March next year. The video analytics of the sugar industry has already been completed.

The prime minister called for early installation of the cement industry’s video analytics system. He was told that work on system design for digital invoices has been completed and a mobile phone application for the digital invoicing of small businesses would be ready by the end of this month.

The participants were told that a new board of Pakistan Revenue Automation Ltd (PRAL) has been constituted and the organisation’s hardware and data center was also being upgraded. Besides, a central assessment unit for faceless customs assessment at Karachi Airport will start functioning by this year end.

Meanwhile, Prime Minister Shehbaz Sharif on Thursday appreciated the performance of the Ministry of Commerce for its prompt compliance with his instructions issued and directed to convene a meeting of the National Export Development Board next week to increase Pakistani exports. The prime minister made these remarks while chairing a review meeting on Commerce Ministry’s performance, a PM office news release said.

The prime minister directed to take immediate steps to create sustainable employment opportunities for the border districts of Balochistan and step up measures to further increase Pakistani rice exports to Malaysia. The PM underscored that the existing special economic zones would be activated along with proper facilities of hotels, hospitals, business schools and other services to increase domestic exports.

The prime minister directed to form a special cabinet committee to increase the production of wheat, cotton, sugarcane, rice, edible oil and other major crops. He added that the cabinet committee would submit recommendations based on expert opinions to increase production of major crops.

Meanwhile, smuggling of petroleum products worth Rs396 billion annually in the country has been detected. The total volume of smuggling in the country is Rs750 billion, of which the largest amount is smuggling of petroleum products while other items include tobacco, tyres, fabrics, vehicles, tea, auto parts, betel nuts and mobile phones.

Prime Minister Muhammad Shehbaz Sharif directed in a meeting yesterday that stricter action be taken against petrol smuggling. He said that due to a strict crackdown on smuggled fuel and a significant reduction in petrol and diesel prices, Pakistan’s petroleum sales reached a 25-month high of 1.58 million tons in November 2024, up from 1.37 million tonnes last year.

Experts say that the value of 1.58 million tons of petroleum is approximately Rs500 billion. According to government sources, the federal government has decided to take action against illegal petrol pumps across the country.

Sources say that important measures have been prepared to prevent the increasing losses to the national kitty due to smuggling of petroleum products. According to sources, it is proposed to give the district administration the authority to seal illegal petrol pumps and seize machinery and equipment of illegal petrol pumps. It is proposed to digitize petrol pumps across the country and monitor sales through SIM-based technology at petrol pumps. While a plan has also been made to carry out real time monitoring of stocks at petrol pumps. According to sources, a proposal has also been made to develop a GIS mobile application to locate illegal petrol pumps and to bind oil marketing companies to provide real-time updates on the mobile application.

Meanwhile, Saudi Arabia has extended the term of $3 billion deposits placed with Pakistan for another year in order to support the country’s economy, the State Bank of Pakistan (SBP) said on Thursday. The term of the deposit was maturing on December 5 (Thursday). The deposit agreement was first signed with the Saudi Fund for Development (SFD) in 2021 and rolled over in 2022 and 2023. “The said amount has been placed with the State Bank of Pakistan (SBP) on behalf of the Islamic Republic of Pakistan,” the SBP said in a statement.

“The extension of the term of the deposit is a continuation of the support provided by the Kingdom of Saudi Arabia to the Islamic Republic of Pakistan, which will help in strengthening the foreign exchange reserves of Pakistan and contribute to the country’s economic growth and development,” it added.