ISLAMABAD: Pakistan’s tax-to-GDP ratio rose to 10.8% in the second quarter of the 2024-25 fiscal year, a statement from the Senate Standing Committee on Finance and Revenue said on Thursday, below the target of 13.6% agreed with the International Monetary Fund (IMF) when it approved a $7 billion bailout loan for the cash-strapped country last year.
The South Asian nation is navigating a challenging economic recovery path buttressed by the 37-month loan program that comes with tough measures especially on the taxation front, such as broadening the tax base to include previously undertaxed sectors such as agriculture, industrialists, and developers, abolishing exemptions and bringing the retail, agriculture, and export sectors into the normal income tax regime and imposing new taxes on the construction and sale of buildings and plots, and on milk and lubricating oil.
The bailout has also called for increasing the tax rate on farm income, continuing fiscal consolidation to reduce the deficit and improve fiscal discipline, improving tax administration and compliance, strengthening federal-provincial institutional arrangements and improving public investment management.
“The tax-to-GDP ratio has risen to 10.8% in the second quarter [of FY24-25], up from 9.5% in the first quarter, although it remains below the IMF-agreed target of 13.6% by the end of the program,” said a press release after the Senate Standing Committee on Finance and Revenue met on Thursday. “By comparison, India’s tax-to-GDP ratio stands at 18%.”
During the meeting, the committee was briefed on Pakistan’s current revenue shortfall of Rs384 billion for the first half of the fiscal year. The FBR collected Rs5,624 billion in taxes, falling short of the targeted Rs6,008 billion.
Senator Saleem Mandviwala, the chair of the committee, expressed concerns over the Federal Bureau of Revenue’s handling of sales tax collection.
Finance Minister Muhammad Aurangzeb responded by highlighting ongoing reforms, including a move to simplify income tax forms for salaried individuals and a push for transparency in tax collection through technological innovations.
Aurangzeb also discussed the government’s intention to separate tax policy from FBR operations in the next financial year, aiming to ease the burden on the salaried class.
“We are taking steps to keep the tax form simple and easy,” he added.
The committee also stressed the need for reforms to reduce the administrative burden on taxpayers while ensuring that tax collection remained “efficient and fair.”
The possibility of converting certain taxes into a carbon tax, a proposal raised by Senator Sherry Rahman, was also discussed.
“While the finance minister acknowledged the World Bank’s 10-year $20 billion Country Partnership Framework, which includes climate and carbon concerns, some members, including Senator Farooq H. Naik, raised concerns about the impact of a carbon tax on inflation and its effect on the poor,” the statement said.
Under the IMF deal, the highest effective tax rate on farm income can rise to as much as 45% from the current 15%. It will be implemented from this year, a move that was termed “unprecedented” by brokerage and investment banking firm JS Global at the time the loan was approved last year.
“These changes could contribute to inflation, particularly in food prices, affecting consumers nationwide,” said Ghasharib Shaokat, head of product at Pakistan Agriculture Research, adding that larger farmers will be affected more.
Inflation averaged close to 30% in FY23 and 23.4% in FY24, which ended on June 30. The consumer inflation rate slowed to 4.1% year on year in December, the lowest in more than 6.5 years.
Prime Minister Shehbaz Sharif’s government is based on a weak coalition and faces political pressure from the party of popular jailed opposition leader, former premier Imran Khan.
But Sharif says his government is committed to the tough but unavoidable reforms mandated by the IMF.
Pakistan has been struggling with boom-and-bust cycles for decades, leading to 22 IMF bailouts since 1958.
Pakistan tax-to-GDP ratio rises 10.8% in FY25 second quarter, below IMF target
https://arab.news/jcu23
Pakistan tax-to-GDP ratio rises 10.8% in FY25 second quarter, below IMF target
- Pakistan navigating challenging economic recovery path buttressed by $7 billion IMF program that comes with tough measures
- Senate Standing Committee of Revenue expresses concerns over Federal Bureau of Revenue’s handling of sales tax collection
Pakistani climber killed, foreigner injured in K2 avalanche
- Avalanche struck four climbers 500 meters above K2 base camp on Friday afternoon, says state media
- K2, 8,611 meters high. is considered among dangerous peaks worldwide due to extreme weather conditions
ISLAMABAD: A Pakistani climber named Iftikhar Hussain was killed this week and a foreigner sustained injuries after an avalanche struck Camp 1 at K2, the world’s second-highest peak, state-run media reported.
The incident took place on Friday when the camp was struck by an avalanche at approximately 2:30 pm, state-run Associated Press of Pakistan (APP) said in a report, citing a press release from the Alpine Club of Pakistan (ACP) on Saturday.
The state media said that the avalanche occurred around 500 meters above the base camp, catching four climbers in its path. Two managed to return safely to the Advance Base Camp, while the foreign climber suffered minor injuries.
“Local climber Iftikhar Hussain, a resident of Sadpara, Skardu, lost his life in the incident,” APP reported on Saturday. “His body was recovered and brought down to the base camp.”
Standing at 8,611 meters (28,251 feet) on the Pakistan-China border, K2 is 238 meters shorter than Everest but is considered technically more challenging— earning it the nickname “Savage Mountain.”
Following the incident, the expedition outfitter submitted a formal request to Major General Irfan Arshad, the president of the ACP and Askari Aviation, for a mercy helicopter operation to repatriate the deceased.
The request was approved on humanitarian grounds, after which Hussain’s body was airlifted to Skardu in northern Pakistan.
Pakistan’s northern Gilgit-Baltistan region is home to some of the tallest peaks in the world and a major tourist destination. Thousands of tourists and foreign climbers visit the region each year for expeditions on various peaks, paragliding and other sports activities.
Pakistan has produced several professional climbers, both men and women, who have summited some of the world’s tallest peaks in recent years.
Rights activists welcome Pakistan Senate move to scrap death penalty for two crimes
- Activists urge stronger protections for women as one offense involves publicly stripping them
- Harsh punishments may seem tough, they say, but often let offenders of such crimes walk free
KARACHI: Rights activists in Pakistan on Saturday welcomed Pakistan’s Senate decision to abolish the death penalty for two criminal offenses— publicly stripping women and harboring hijackers— but stressed the need for stronger legislation and better enforcement to ensure justice for survivors and prevent violence.
The reform amends Sections 354-A and 402-C of the Pakistan Penal Code and replaces capital punishment with life imprisonment for the two crimes.
Lawmakers say the move is part of a broader effort to align Pakistan’s criminal justice system with international human rights standards, particularly under the European Union’s Generalized Scheme of Preferences Plus (GSP+), which grants preferential trade access to countries that uphold certain rights commitments.
“Publicly stripping women of their clothes is one of the most heinous crimes and must be met with the harshest punishment,” Mahnaz Rahman, woman’s rights activist and former executive director of the Aurat Foundation, told Arab News. “While we strongly advocate for severe punishments for such acts, we do not support the death penalty for any crime, including this one.”
She said life imprisonment itself was an “extremely severe” punishment, though she insisted the change must be accompanied by comprehensive and robust legislation to prevent this and all other forms of violence against women.
“Ultimately, it is the effective enforcement of laws and accountability that will deter such crimes and help ensure that women feel genuinely safe and protected in our society,” she added.
Sarah Belal, Executive Director of Justice Project Pakistan (JPP), said the reform aligned Pakistan’s criminal justice system more closely with the principles of fairness and the rule of law.
“The death penalty has never been enforced for this offense, but its mere presence has discouraged convictions and denied survivors meaningful redress,” she said. “Harsh punishments may appear tough, but they often let perpetrators walk free.”
“Removing the death penalty for these offenses does not mean they are being decriminalized,” she added. “It simply means we are pushing for stronger, more proportionate implementation of the law.”
Senator Talal Chaudhry of the ruling Pakistan Muslim League-Nawaz (PML-N) party who introduced the bill said the amendments had been thoroughly discussed and approved by a standing committee with cross-party input.
“Replacing the death penalty with life imprisonment under both sections is part of Pakistan’s legal reforms,” he said.
The bill must now be passed by the National Assembly before it can receive presidential assent and become law.
Under existing law, Section 354-A allows for capital punishment or life imprisonment for anyone who assaults and strips a woman in public, while Section 402-C applies the same punishment to individuals who knowingly harbor hijackers.
The new bill eliminates the death penalty option for both. However, some lawmakers have voiced concern over the move.
Senator Samina Mumtaz Zehri of the Balochistan Awami Party warned that Pakistan’s low conviction rates and weak enforcement mechanisms could make reduced punishments ineffective as a deterrent.
“This is not right,” she was quoted as saying by Dawn newspaper. “This is not going to help the country or its people.”
Chaudhry defended the move, pointing to the misuse of capital punishment laws enacted during the military regime of General Zia-ul-Haq.
“Life imprisonment is by no means a minor punishment,” he said, noting that the law had often been abused by police to settle personal vendettas.
Federal Law Minister Azam Nazeer Tarar emphasized that the changes did not affect death sentences for more serious crimes like murder or rape.
“We are only removing the death penalty from offenses that do not constitute the ‘most serious crimes,’ a key requirement under the GSP+ agreement,” he said in response to a query by Senator Shibli Faraz.
Pakistan has long faced international scrutiny over its broad application of the death penalty.
At least 31 offenses are currently punishable by death under Pakistani law. While executions have not taken place since 2020, over 6,100 people remain on death row, according to the Justice Project Pakistan.
Between 2015 and 2019, more than 500 people were executed following the end of a moratorium in 2014.
Senator Quratulain Marri of the Pakistan People’s Party, a coalition partner of the ruling PML-N, said her party opposed the death penalty on principle.
“There are numerous studies on how capital punishment is not an effective deterrent,” she told Arab News. “While the need for reforms cannot be ruled out, we have to consider bringing changes that better society in the long run. The aim is to rid society of the crime and not just the criminal.”
Pakistan cuts Karachi port charges by 50% in climate-focused maritime reform push
- Government says efficient port cuts vessel idle time, fuel use and supports greener supply chains
- Pakistan also aims to cut container dwell time by 70% using AI and drone-based port monitoring
ISLAMABAD: Federal Minister for Maritime Affairs Muhammad Junaid Anwar Chaudhry on Saturday announced a 50% reduction in Karachi Port charges, in a move aimed at cutting trade logistics costs and promoting climate-resilient, low-emission shipping practices.
The reform is part of a broader strategy to modernize Pakistan’s maritime sector and reduce its carbon footprint, as the country works to align trade infrastructure with global environmental standards.
“By lowering operational costs and streamlining logistics, we are not only boosting trade competitiveness but also contributing to climate resilience,” Chaudhry said in a statement issued by his office.
The new measures include halving charges related to port handling, vessel services and storage while scrapping a previously planned annual five percent fee hike.
Officials say the move is expected to benefit exporters of dry bulk goods and reduce emissions by improving port turnaround times and easing congestion.
“This isn’t just a financial measure,” Chaudhry added. “It’s a pivot toward low-impact, future-ready maritime trade. A more efficient port reduces idle time for vessels, lowers fuel consumption and supports greener supply chains.”
Karachi Port is one of Pakistan’s largest and busiest deep-water seaports, handling a significant share of the country’s import-export traffic.
Officials say the reforms will enhance the port’s efficiency while positioning it as a regional hub for climate-conscious maritime activity.
The announcement follows recent steps by the ministry to improve logistics and infrastructure, including the formation of a high-level committee to reduce container dwell times by 70%, and the deployment of advanced technologies such as artificial intelligence and drones for port monitoring.
Pakistan mulls ADB role in CPEC’s flagship Main Line‑1 railway upgrade
- An ADB fact-finding team inspected the 480-kilometer Karachi–Rohri track on Saturday
- Officials say the ADB is yet to take any decision while calling China the main financier
KARACHI: Pakistan is considering financial support from the Asian Development Bank (ADB) for the long-delayed Main Line‑1 (ML‑1) railway upgrade — part of the China‑Pakistan Economic Corridor (CPEC) — as an ADB fact-finding team inspected a section of the track on Saturday, according to an official statement.
ML‑1, a $6.7 billion upgrade of Pakistan’s 1,687-kilometer Karachi–Peshawar rail artery, 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.
“Experts from the Asian Development Bank inspected the Karachi to Rohri railway line today,” Pakistan Railways said in a statement. “The Bank’s Chief Transport Planner, Sangyoon Kim, conducted the 480-kilometer track inspection alongside the chief engineer (open lines) of Pakistan Railways.”
“ADB’s fact-finding specialists will prepare a report on the readiness of the Main Line-1 (ML-1) project, following which a final decision regarding the project’s financing will be made,” the statement added.
ML‑1 underpins Pakistan’s main rail connectivity, carrying a major bulk of the country’s cargo and passenger traffic. The project was approved by the Economic Coordination Committee in 2020 but has repeatedly stalled amid funding hitches.
Speaking to Arab News, Babar Ali Raza, spokesperson at the railways ministry, said ADB was currently only preparing the feasibility.
“The main financier is China,” he continued. “The team conducting the inspection is assessing its own feasibility to determine whether ADB can provide financing or not.”
“This would be ADB’s own financing,” he added, “however much they want to contribute.”
Pakistan and China have described CPEC as a “game-changer” for growth. The corridor comprises multibillion-dollar infrastructure initiatives covering roads, energy and rail.
The two countries are also striving for regional connectivity, with Pakistan actively pursuing economic diplomacy in the neighborhood and offering its southern ports to landlocked Central Asian countries for global trade.
Pakistan deputy PM to travel to US next week for UN meetings on Palestine, multilateralism
- Pakistan is hosting a series of UN meetings after assuming the Security Council’s presidency this month
- Ishaq Dar will chair an open debate on strengthening multilateralism and peaceful settlement of disputes
ISLAMABAD: Pakistan’s Deputy Prime Minister (DPM) and Foreign Minister (FM) Ishaq Dar will travel to the United States next week to chair UN Security Council meetings in New York focused on multilateralism and the Palestinian issue, the foreign office said in a statement on Saturday.
Pakistan assumed the rotating presidency of the UN Security Council earlier this month and is hosting a series of “signature events” — or high-level meetings organized by the Council president — to spotlight key diplomatic priorities.
Dar will chair an open debate on strengthening multilateralism and peaceful settlement of disputes, and preside over a quarterly debate on the situation in the Middle East, including the Palestinian question.
“The high-level debate aims at exploring ways to strengthen multilateralism, and at enhancing diplomacy and mediation for peaceful settlement of disputes,” the foreign office said.
Dar will also lead a briefing at the Council on enhancing cooperation between the United Nations and the Organization of Islamic Cooperation (OIC), as part of Pakistan’s broader effort to bolster institutional partnerships for international peace and security.
“To express Pakistan’s strong commitment, and unwavering support for the right to self-determination of the Palestinian people, the DPM/FM will also attend the high-level Conference on the ‘Peaceful Settlement of the Question of Palestine and the implementation of Two-State Solution,’” the statement added.
Pakistan has consistently supported Palestinian statehood and called for an end to Israeli occupation in various multilateral forums.
During his stay in New York, Dar is expected to hold bilateral meetings with UN officials and counterparts from other member states.
The foreign office said he will also travel to Washington for other official engagements.
“Deputy Prime Minister/Foreign Minister, Senator Mohammad Ishaq Dar’s visit to New York and Washington exemplifies Pakistan’s growing role and importance in the multilateral arena as well as its expanding multifaceted relations with the US,” the statement said.
