Tag: taxation

  • PSO reportedly planning to buy Telenor to expand its business beyond oil

    PSO reportedly planning to buy Telenor to expand its business beyond oil

    Pakistan State Oil (PSO) is reportedly conducting due diligence on the Pakistani operations of a Norwegian telecommunications operator, in response to Telenor’s plans to sell its Pakistani operations valued at around $1 billion. Pending regulatory approval, PSO has expressed interest in acquiring Telenor Pakistan and Easypaisa, following the completion of bidding documentation and due diligence.

    Easypaisa, a leading mobile wallet, mobile payments, and branchless banking services provider, boasts a significant customer base of nine million monthly active users. Launched in 2009 as a money transfer service through Unstructured Supplementary Service Data (USSD) channels, Easypaisa introduced a mobile app in 2016, offering a broad range of financial transactions. Telenor Microfinance Bank owns Easypaisa, and jointly, Telenor Group most recently launched a debit card on January 17, 2023.

    According to Mettis Global, Telenor Pakistan’s decision to exit the market stems from heavy taxation on the telecommunications industry and the policies of the Pakistani Telecommunication Authority (PTA), which have significantly reduced its revenues. Although Telenor Pakistan has faced operational losses for the past three years, there is no certainty that discussions regarding the sale of its Pakistani operations will result in a transaction.

    For PSO, the potential acquisition of Telenor’s operations in Pakistan aligns with its efforts to expand its business beyond traditional oil and gas. If successful, the acquisition could enable PSO to diversify its revenue streams and leverage Pakistan’s growing digital payments market.

  • International petrol, diesel prices drop, but no relief for Pakistanis

    The government has decided not to reduce the prices of diesel and petrol for local consumers, despite a significant decrease in their international prices. This decision is intended to offset previous exchange losses and raise taxation.

    On February 28, 2023, the average fortnightly prices of petrol and diesel in the global market will be used for the next price revision. According to industry sources, the average price of diesel for the next fortnightly review has dropped by $7 per barrel, which equates to a reduction of Rs30 per litre for domestic diesel prices.

    The global average price of diesel has fallen to approximately $100 per barrel compared to $107 per barrel in the previous fortnight. Similarly, the average price of petrol has dropped to $90 per barrel for the next review of prices compared to $93 per barrel in the last fortnightly review, which translates into a reduction of Rs10 per litre for consumers in the local market.

    According to Geo, the appreciation of the Pakistani rupee against the dollar in the last two weeks has also contributed to the reduction in import prices of diesel and petrol. However, industry sources do not expect any significant reduction in the prices of diesel and petrol for domestic consumers.

    The government is expected to adjust the exchange losses, which were not passed on fully to the oil sector in the last several reviews. For example, an exchange loss adjustment of Rs88 per litre was due on diesel, but the government only transferred Rs12 per litre on this head, leaving the remaining amount to be adjusted. The same is true for petrol, with an exchange loss adjustment of Rs34 per litre due, but only Rs12 per litre being given to the oil industry.

    Under the conditions set by the International Monetary Fund (IMF), the government may increase the petroleum levy (PL) on diesel to Rs50 per litre, as it now has room to do so. Currently, the PL on diesel is Rs40 per litre.

    If the government does not impose GST, sources expect a cut of Rs10 per litre in diesel prices, which would otherwise deprive local consumers of the drop in diesel prices in the global market.

    However, official industry sources do not anticipate any reduction in the price of petrol for local consumers, which would otherwise have been down by Rs10, as per the trends of its price in the global market.

  • Punjab’s ePay system collects over Rs90 billion tax revenue through 17 million transactions

    Punjab’s ePay system collects over Rs90 billion tax revenue through 17 million transactions

    Since its launch in October 2019, e-Pay Punjab, an online payment solution developed by the Punjab Information Technology Board (PITB) and the Punjab Finance Department, has collected over Rs90 billion in tax revenue through 17 million transactions.

    As per details released by the PITB on Friday, e-Pay Punjab has collected a total of Rs57 billion in sales tax, Rs11.5 billion in token tax, Rs9 billion in property tax, Rs4 billion in traffic challans, and Rs440 million in vehicle transfers.

    It’s worth noting that e-Pay Punjab now accepts online payments for 23 taxes and levies from ten different departments. Its 1-Link network integration with the State Bank of Pakistan (SBP) and all scheduled banks makes it a secure and dependable payment channel.

    The e-Pay Punjab application, which has over 1 million downloads, generates a unique PSID number that is accepted by banks across Pakistan through their various channels, including Internet and Mobile Banking, ATMs, and physical branch visits.

    It is also a secure, smart, and fast online payment option for the annual Token Tax. Vehicle owners can use e-Pay Punjab to pay their Token Tax from the comfort of their own homes.

    The app’s primary objective is to make it convenient for the government to gather revenue in the form of taxes through a simple solution. With Pakistan’s first digital tax aggregator, the app demonstrates how Pakistan and its government are rapidly integrating financial technology (fintech) into their processes.