Pakistan PM resisting IMF diktat on increasing tax on salaried class in budget — official

In this file photograph, taken and released by Prime Minister’s Office on April 18, 2024, Pakistan Prime Minister Shehbaz Sharif chairs a cabinet meeting in Islamabad. (Photo courtesy: PMO)
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Updated 10 June 2024
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Pakistan PM resisting IMF diktat on increasing tax on salaried class in budget — official

  • Pakistan is expected to release federal budget for upcoming fiscal year in National Assembly on June 12
  • Opposition lawmaker vows to force government to review “anti-public measures” in the fiscal budget

ISLAMABAD: Prime Minister Shehbaz Sharif is resisting the International Monetary Fund’s (IMF) diktat to increase tax on Pakistan’s salaried class and agricultural products in the upcoming federal budget, a government official confirmed recently, as the government prepares to release the annual document detailing Pakistan’s estimated revenues and expenditures for the upcoming fiscal year later this week.
Pakistan’s government is gearing up to present the budget for the fiscal year 2024-25 on June 12. The development takes place as the South Asian country remains locked in negotiations with the IMF for a fresh financial bailout program that Islamabad considers necessary to avert a macroeconomic crisis. Pakistan’s economic crisis has seen its reserves drop to alarmingly low levels and its currency significantly weaken against the US dollar over the last two years.
Islamabad has taken painful measures demanded by the IMF since 2022, which include hiking fuel and energy prices in return for the financial institution’s help. These decisions caused prices of essential commodities to skyrocket in the country, with inflation surging to 38 percent in May 2023 before dropping to a 30-month low of 11.8 percent in May 2024. 
“The prime minister is not ready to follow the IMF diktat to raise income tax on salaried class,” Rana Ihsan Afzal, the coordinator to the prime minister who is involved in the budget’s preparation process, told Arab News on Sunday.
“The IMF wants us to impose tax on agricultural products including tractors and even seeds but the prime minister has been resisting all this,” he said. Afzal added the government would initiate measures to ensure the agriculture and industrial sectors of the country flourish rather than impose additional taxes on them.
Afzal said the government would protect lifeline utilities consumers in the budget and increase the allocation for the Benazir Income Support Program (BISP), a federal unconditional cash transfer poverty reduction scheme.
“We are going to offer incentives to the industry to boost our exports and create job opportunities for the youth,” he said.
About the IMF’s proposal to levy a tax on pensions, he said the government was looking into different options to deal with the situation. He said the prime minister was mostly not in favor of the decision.
“We will be announcing an increase in pensions and salaries in the budget,” Afzal vowed, saying that the government was trying to present a “people-friendly” budget.
The Sunni Ittehad Council (SIC), a major opposition party backed by former prime minister Imran Khan’s candidates, said the government was “clueless” about the budget, claiming it would present a document that has been prepared by the IMF for parliament’s approval.
“The government has not consulted opposition parties about the budget’s preparation but we knew that this was going to be a tough budget for the public,” Zartaj Gul Wazir, an SIC lawmaker, told Arab News.
“As the opposition we will not only present our budget proposals in parliament but also force the government to review its anti-public measures,” she said. Wazir lamented that the economy had nosedived and the government did not have a cogent plan to revive it. 
Meanwhile, Afzal said the government would welcome the opposition’s budget proposals after it would table the finance bill in the National Assembly. 
“The opposition will be able to debate on the financial plan and forward its proposals to the government before the budget is passed,” Afzal said, adding that the government had consulted all other stakeholders, including those from various industries, for the budget’s presentation.


Pakistan pays tribute to ‘resilient’ Palestinians on ‘Day of Remembrance of Victims of Terrorism’

Updated 19 sec ago
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Pakistan pays tribute to ‘resilient’ Palestinians on ‘Day of Remembrance of Victims of Terrorism’

  • World pledges to promote human rights, freedoms of victims of “terrorism” every year on Aug. 21
  • Pakistan says Israel’s actions constitute grave violations of international law, amount to genocide

ISLAMABAD: Pakistan’s foreign office on Thursday paid tribute to the “resilient” people of Palestine on the ‘International Day of Remembrance of and Tribute to the Victims of Terrorism,’ criticizing Israeli forces for committing “genocide” in the Middle East and violating international law.

The United Nations General Assembly marks the day every year on Aug. 21 to honor and support the victims and survivors of “terrorism.” The day is also held to promote and protect the full enjoyment of the human rights and fundamental freedoms of victims of “terrorism.”

Pakistan has consistently criticized Israel since it began its military operations in Gaza on Oct. 7, 2023 for targeting civilians, schools, hospitals and blocking humanitarian supplies for the Palestinian population. So far, Israeli forces have killed at least 62,122 Palestinians, most of them civilians, according to figures from the health ministry in Hamas-run Gaza.

“We extend our deepest tribute to the resilient people of Palestine, who continue to suffer relentless aggression, systemic human rights violations, and state terrorism at the hands of Israeli occupation forces,” Pakistan’s foreign office said in a statement.

“Their actions constitute not only grave violations of international law but also amount to genocide.”

The Pakistani foreign office highlighted that prolonged unresolved conflicts, foreign occupation, and the denial of the right to self-determination create “conditions for extremism and terrorism” which should be addressed comprehensively.

“As we remember the victims of terrorism today, we call upon the international community to join us in making collaborative efforts to strengthen international partnership, dialogue, and cooperation to eliminate the menace of terrorism without discrimination,” the statement said.

“And support the victims and their families, and to contribute to a peaceful and secure world.”

The foreign office’s statement said Pakistan has lost over 90,000 Pakistanis in its war against militancy since the early 2000s, adding that it has also endured “staggering economic losses” exceeding $150 billion.

“We honor the valor of our martyrs and heroes whose sacrifices remain a beacon of strength and unity for the nation,” the statement said.

Pakistan has been battling twin insurgencies in its northwestern Khyber Pakhtunkhwa (KP) and its southwestern Balochistan provinces. In KP, the Tehreek-e-Taliban Pakistan or TTP have carried out deadly attacks against law enforcers in recent months in their bid to impose their strict brand of Islamic law in the country.

In Balochistan, separatist Baloch ethnic groups target civilians and military personnel frequently. These separatist groups seek independence from Pakistan, accusing Islamabad of denying locals a share in the province’s natural resources.

Pakistan’s government and military deny the allegations and say that several health, education and social initiatives in the province have been launched to uplift the province, which is considered one of the poorest in the country by almost all social and economic indicators.


Pakistani analysts urge Islamabad to undertake ‘serious efforts’ to expedite CPEC projects

Updated 21 August 2025
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Pakistani analysts urge Islamabad to undertake ‘serious efforts’ to expedite CPEC projects

  • Pakistan, China agreed to prioritize “high-quality” cooperation for CPEC during Chinese FM’s visit to Pakistan
  • Experts warn extending CPEC to Afghanistan may take time due to tense relations between Islamabad, Kabul

ISLAMABAD: Pakistani foreign policy analysts on Thursday urged the government to undertake “serious efforts” to ensure implementation of long-delayed projects part of the China-Pakistan Economic Corridor (CPEC), which include special economic zones (SEZs), modernizing railway lines and extending the corridor to Afghanistan.

Islamabad and Beijing said on Thursday they would prioritize “high-quality” cooperation under CPEC, unveiling plans for an upgraded version of the multibillion-dollar flagship Belt and Road project. CPEC was launched in 2015 and is essentially an infrastructure network that includes energy, highways, railways projects, and the development of the Gwadar Port on the Arabian Sea connecting Pakistan and China.

The announcement came during Chinese Foreign Minister Wang Yi’s visit to Pakistan. While Pakistan has said the project is extremely vital to revive its struggling economy, political, security and economic challenges have caused CPEC projects to suffer delays.

Pakistani economists and foreign policy experts said that while CPEC holds vast economic potential, consistent policies by Pakistan and its accelerated implementation are required for tangible results. Shakeel Ramay, an economist, said SEZs were a key part of the CPEC that could not be established at the required pace due to governance, political, and other challenges.

China's Foreign Minister, Wang Yi (left) shaking hands with Pakistani counterpart, Ishaq Dar, at the Ministry of Foreign Affairs in Islamabad, Pakistan, on August 21, 2025. (Government of Pakistan)

“The positive point is that the government has now realized their importance and is working on it, but serious efforts are needed to expedite the implementation,” Ramay added.

Ramay also highlighted delays in the Main Line-1 (ML-1) railway project.

The ML‑1, a $6.7 billion upgrade of Pakistan’s 1,687-kilometer Karachi–Peshawar rail artery first agreed upon in May 2017, is central to CPEC. The overhaul, involving track doubling, advanced signaling and higher-speed trains, is expected to boost cargo and passenger capacity while easing the transport of trade goods to and from the country’s southern ports.

“The hope is there for the project to kickstart with Pakistan and China’s openness to third-party inclusion creating opportunities for the Asian Development Bank, World Bank, and other investors,” Ramay said.

China is also involved in the development of a deep-sea port in Pakistan’s Gwadar city, located in its impoverished southwestern Balochistan province. In January this year, Pakistan operated the first commercial flight at the Gwadar International Airport, which has been developed with Chinese funding.

Ramay noted that implementation of CPEC projects in Gwadar was visible, despite hurdles.

“The Chinese government has donated 5,000 solar units, built a state-of-the-art hospital, and, along with Pakistan, is investing in skills development,” he said, adding that 30 Chinese and Pakistani companies have invested almost 3 billion Yuan ($418 million) in the Gwadar Free Trade Zone.

CPEC’s EXPANSION INTO AFGHANISTAN

Yi and the foreign ministers of Pakistan and Afghanistan held trilateral talks in Kabul this week. The three sides agreed to strengthen economic, trade and security cooperation, and extend CPEC to Afghanistan.

However, ties between Pakistan and Afghanistan remain tense as Islamabad blames Kabul for not taking action against militants it alleges launch attacks on Pakistan from its soil. Kabul denies the allegations.

Foreign ministers of Pakistan, China and Afghanistan hold the Sixth Trilateral Foreign Ministers Dialogue in Kabul on August 20, 2025. (Handout/MOFA)

Naghmana Hashmi, Pakistan’s former ambassador to China, said extending CPEC to Afghanistan had always been seen as a natural step to link Central Asia together. However, she said security issues delayed the plan.

“Without peaceful Afghanistan and secure transit, CPEC could not completely develop for Pakistan,” she told Arab News.

Hashmi noted that while the Taliban initially stayed away from the idea to extend CPEC into Afghanistan, they later endorsed it. She said that with the Taliban now in power in Afghanistan, internal security for CPEC projects in the country might not be a “major challenge.”

Dr. Talat Shabbir, director of the China-Pakistan Study Center at the Institute of Strategic Studies Islamabad, said CPEC’s expansion into Afghanistan could take time given the complex bilateral relationship between Islamabad and Kabul.

“Political and bilateral connectivity is essential for such a venture, but I am hopeful that progress will be made soon as the Chinese are actively working on this aspect,” Shabbir said.

Security of Chinese nationals in Pakistan working on CPEC projects, however, has been an area of concern for both nations. Militant attacks in Balochistan, northwestern Pakistan and Karachi targeting Chinese nationals have urged Beijing to express concern over the safety of its citizens in Pakistan.

Shabbir noted that Pakistan had bolstered security for Chinese citizens in the wake of these attacks.

“Looking ahead into 2025, Pakistan is further upgrading its security protocols with a mix of technology, intelligence sharing, and community-level engagement in CPEC areas,” he said.


Pakistan, US explore ways to strengthen railways to support critical minerals sector

Updated 21 August 2025
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Pakistan, US explore ways to strengthen railways to support critical minerals sector

  • US companies ready to provide “world-class solutions” for growth, both nations’ mutual benefit, says American envoy
  • Pakistan has recently aimed to tap its critical minerals sector by attracting investment from global mining companies

ISLAMABAD: US Chargé d’Affaires Natalie Baker met Pakistan’s Railways Minister Hanif Abbasi on Thursday to discuss ways to strengthen Islamabad’s railways and infrastructure to support its critical minerals sector, the US Embassy in Pakistan said in a statement.

Pakistan has attracted interest from Washington particularly over its critical minerals sector. Earlier this month, US Secretary of State Marco Rubio said Washington looked forward to exploring cooperation with Pakistan in critical minerals and hydrocarbons.

In April this year, Pakistan hosted an international minerals summit in Islamabad where top companies and government officials from the US, Saudi Arabia, China, Turkiye, the UK, Azerbaijan, and other nations attended. The summit aimed to attract foreign investment in the country’s mining sector, with Pakistan

“Grateful for today’s productive meeting with Federal Minister @pakrailpk Hanif Abbasi,” Baker was quoted as saying by the US embassy on social media platform X. “Together, we are exploring innovative ways to strengthen Pakistan’s railways and infrastructure to support the critical minerals sector.”

She said American companies were ready to provide “world-class solutions” that drive growth and mutual benefit for both countries.

Pakistan is rich in gold, copper and lithium reserves, as well as other minerals.

However, despite being rich in reserves of salt, copper, gold and coal, Pakistan’s mineral sector contributes only 3.2 percent to the country’s GDP and 0.1 percent to global exports. Pakistan is now aiming to tap into this underutilized potential by attracting investment from global mining companies.

The South Asian nation is home to one of the world’s largest porphyry copper-gold mineral zones, while the Reko Diq mine in southwestern Balochistan has an estimated 5.9 billion tons of ore.

Barrick Gold, which owns a 50 percent stake in the Reko Diq mines, considers them one of the world’s largest underdeveloped copper-gold areas, and their development is expected to have a significant impact on Pakistan’s struggling economy.

The meeting between Baker and Abbasi comes amid deepening ties between Washington and Islamabad, ever since US President Donald Trump brokered a ceasefire between India and Pakistan on May 10. Ties between both nations remained frayed under US President Joe Biden’s administration.

Last month, Pakistan signed a trade deal with the US after which Washington slashed its tariff on Pakistani goods from 29 percent to 19 percent, while Trump imposed double tariffs on Islamabad’s arch-rival India.


ADB to provide $410 million package for Barrick-run Pakistan mine, sources say

Updated 21 August 2025
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ADB to provide $410 million package for Barrick-run Pakistan mine, sources say

  • Reko Diq mine is expected to produce copper, gold from 2028 and generate about $70 billion in free cash flow over its lifespan
  • Financing composed of two loans totaling $300 million to Barrick, a $110 million financing guarantee for Pakistan’s government

ISLAMABAD: The Asian Development Bank will provide a $410 million financing package to help develop Pakistan’s Reko Diq copper mine, one of the world’s largest untapped deposits, which will be operated by Barrick Gold, two sources told Reuters on Thursday.

Islamabad hopes the project will serve as a springboard to draw more foreign interest to its mineral sector, particularly to exploit rare earth deposits. Pakistan has already attracted interest from the Trump administration and offered future concessions to US companies.

The loans and a financing guarantee will support development of Reko Diq, which is expected to produce copper and gold from 2028 and generate about $70 billion in free cash flow over its lifespan.

The financing is composed of two loans totaling $300 million to Barrick and a $110 million financing guarantee for the government of Pakistan, both sources said ahead of the official announcement.

The $6.6 billion project in Balochistan is 50 percent owned by Barrick, with the other half held by the federal and provincial governments.

ADB, the petroleum ministry and Barrick did not immediately respond to requests for comment.

The project aims to raise upwards of $2 billion and has a previous agreement for $700 million in financing from the International Finance Corporation, the World Bank’s private investment arm.

The project’s developers are in talks with other prospective financiers, including the US Export-Import Bank, Export Development Canada and Japan’s JBIC and expect to sign term sheets this quarter, project director Tim Cribb told Reuters in April.

Reko Diq, delayed for years by a legal dispute that was settled in 2022, will produce 200,000 metric tons of copper annually in its first phase, rising to 400,000 tons after an expansion.

Barrick says the mine could operate beyond its 37-year life through upgrades and further exploration.


Explosion at fireworks warehouse in Pakistan’s Karachi injures 34

Updated 21 August 2025
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Explosion at fireworks warehouse in Pakistan’s Karachi injures 34

  • At least four critically injured in blast at fireworks storage facility located in Karachi’s Saddar area, say police surgeon
  • Explosions at fireworks storage facilities are common in Pakistan, with one in January injuring 6 in Mandi Bahauddin city

KARACHI: An explosion at a fireworks warehouse in Pakistan’s southern port city of Karachi left at least 34 people injured on Thursday, triggering a fire that engulfed the building, officials and rescue workers said. 

The blast occurred in a firecracker warehouse located within a building in the densely populated Saddar area of the metropolis. Flames and smoke could be seen billowing from the site and nearby streets littered with shattered glass in videos widely shared on social media. The intensity of the blast was so severe it was reportedly heard several kilometers away.

Dr. Summaiya Syed, a police surgeon Karachi, said 34 injured persons were brought to the city’s Jinnah Postgraduate Medical Center (JPMC) and Civil Hospital after the blast. 

“Of the 34, four are critical, two each now under treatment in these two hospitals,” Dr. Syed told Arab News. 

Firefighters try to extinguish a fire following an explosion at a fireworks storage facility, in Karachi, Pakistan, on August 21, 2025. (AP)

Rescue officials confirmed that the fire was extinguished after several hours of firefighting. 

“Ten fire tenders and a snorkel unit were involved in extinguishing the blaze,” Hassaan Khan, a spokesperson of the Rescue 1122 emergency service, said.

An 'Edhi life guard' volunteer wearing a mask looks out of a window after a fire that broke out at a firecracker warehouse in Karachi on August 21, 2025. (AFP)

The cause of the blast was immediately not clear. Police said the warehouse was owned by two brothers, both of whom were injured in the incident. 

“We have recorded an initial statement from one of the owners, both will be included in the investigation,” said Deputy Inspector-General South Asad Raza said. 

He added that the explosion had damaged several nearby vehicles and shattered the windows of surrounding buildings.

“Police will thoroughly investigate how the blast occurred,” the police official said. “Once the cause is determined, appropriate action will follow.”

Firefighters work to douse a fire that broke out at a firecracker warehouse in Karachi on August 21, 2025. (AFP)

Meanwhile, Sindh Home Minister Zia Ul Hassan Lanjar has sought a detailed report from police on the incident. He also directed police to verify whether the warehouse owners had a valid license to store fireworks. 

The minister told reporters that such warehouses are not allowed to exist in residential areas, assuring that those responsible would face legal action.

People look at a car destroyed by an explosion at a firecracker warehouse in Karachi on August 21, 2025. (AFP)

Explosions at fireworks facilities have taken place in Pakistan in the recent past. In January this year, six people were killed in a similar blast at a fireworks storage site in Mandi Bahauddin, a city in Pakistan’s eastern Punjab province.