Despite crackdown, Pakistan’s former PM Imran Khan’s popularity, vote bank intact — analysts

Security officers escort Pakistani former Prime Minister Imran Khan as he appeared in Islamabad High Court, Islamabad, Pakistan, May 12, 2023. (Photo courtesy: REUTERS/File)
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Updated 02 June 2023
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Despite crackdown, Pakistan’s former PM Imran Khan’s popularity, vote bank intact — analysts

  • Experts say Khan’s vote bank is still intact despite recent crackdown on party workers, exodus of leaders
  • They say Khan should review anti-establishment policy to galvanize public support, win upcoming elections

ISLAMABAD: Former prime minister Imran Khan still enjoys wide public support, especially in the country’s populous Punjab and Khyber Pakhtunkhwa provinces, despite a massive crackdown against his supporters and defections of his senior party leaders since the violent protests of May 9.

About a hundred senior party leaders, including Khan’s close aides and former cabinet ministers, announced to quit the Pakistan Tehreek-e-Insaf (PTI) party while condemning the May 9 protests that spread across the country following the ex-premier’s arrest from the Islamabad High Court in a graft case.

Security forces sprang into action against “arsonists and rioters” after protesters carrying the PTI flags stormed and vandalized public buildings and military installations, including the official residence of a top general and the army headquarters in Rawalpindi. Hundreds of Khan’s supporters and senior party leaders were rounded up on charges of inciting violence. Many of them later announced to quit the party and some even said they were going to take a break from politics.

Despite the current hardships of Khan and his party, political analysts said the ex-premier was still “among the most popular leaders” in the country, thought he needed to review his policies to win the next election.

“At the moment, Khan has a direct confrontation with the establishment and no political leader, irrespective of his popularity, can form a government in Pakistan without the establishment,” Sohail Warraich, a senior journalist and political analyst, told Arab News on Friday.

The establishment is a euphemism for the country’s powerful military in Pakistan. Historically, the army has ruled the country for more than half of its 76-year existence and continues to wield considerable power in the matters related to its security and foreign affairs.

The general elections in Pakistan are scheduled to be held in October after the expiry of the five-year term of the national and provincial legislative bodies.

“The electable are leaving the party and many more will quit,” he continued. “But Khan’s vote bank is still intact.”

Warraich said the ex-premier should “review his anti-establishment policy” to galvanize the public in his favor to secure a victory in the upcoming elections.

Since his ouster from power in April last year in a parliamentary no-confidence vote, Khan has been striving to make a political comeback by riding the wave of popularity. Pakistan is a parliamentary democracy where political parties field candidates in constituencies to win a majority to form the government.

Asked about the crackdown against Khan’s party, Zebunnisa Burki, a political analyst, said the recent developments seemed to be an attempt to make the former prime minister irrelevant.

“Apparently, the whole move appears to be suggesting a minus Imran Khan in the upcoming elections,” she said, adding the “powerful circles” in Pakistan seemed to be dismantling PTI into different factions to divide Khan’s public support.

She maintained if the PTI got divided into different groups before the elections, the future of Khan-led party would be bleak since “the electable still enjoy a significant support in their constituencies even without Imran Khan.”

“The PTI defectors may also form a forward bloc to win over the party supporters, but then again the voter still remains loyal to Khan only,” she continued. “There seems to be interesting times ahead in Pakistani politics, but it will be extremely difficult to take Khan out of it.”

PTI leaders and loyalists describe the prevailing circumstances as a “temporary” phase in their party’s history, saying they will not make much difference to their support base.

“The party is still intact, and these defections won’t make any difference to Imran Khan’s popularity,” Sayed Zulfi Bukhari, the ex-premier’s close aide, told Arab News. “This is all very temporary.”

However, Bukhari acknowledged the crackdown was aimed at dismantling the party, though he added these attempts would not succeed as long as the people were supporting Khan.

“Khan still enjoys overwhelming public support across Pakistan and it is even more than before as every arrest is making PTI stronger and resilient,” he said.

Bukhari predicted “70 percent” turnout in the upcoming elections since people were angry to see what was happening to the former prime minister and would do everything to bring him back to power.

“Imran Khan is a symbol of hope for majority of Pakistanis since they believe only he can steer the country out of the current political and economic mess,” he said.

The political parties in Pakistan have suffered defections and desertions in the past when their leaders fell apart from the military establishment, but they still remained part of parliamentary politics with varying strength.

“All surveys and polls suggest one thing: Imran Khan is the most popular leader in Pakistan, especially in Punjab and KP provinces, and his PTI party would sweep the upcoming polls,” Habib Akram, a senior journalist and political commentator, told Arab News.

He said there was no future of any forward bloc or electable without Khan, adding the recent by-elections in the country had “clearly demonstrated that people’s vote is only for Khan.”

“In this age of digital and social media, importance of political parties has increased manifold as people prefer parties over electable while voting,” he said. “As long as Imran Khan is alive and doing active politics, people will vote for him.”


US confirms Trump’s willingness to mediate Kashmir dispute after India-Pakistan ceasefire

Updated 7 sec ago
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US confirms Trump’s willingness to mediate Kashmir dispute after India-Pakistan ceasefire

  • State Department says US president has taken steps to resolve ‘generational conflicts’ across the world
  • It also confirms meetings of a Pakistani parliamentary delegation with officials in Washington recently

ISLAMABAD: The United States on Tuesday said President Donald Trump would like to mediate between India and Pakistan over the decades-old Kashmir dispute, describing such a move as consistent with his desire to resolve “generational” conflicts around the world.
The comment follows a ceasefire between the two nuclear-armed neighbors, announced by the US president on May 10 after a brief but intense military standoff involving fighter jets, missiles, drones and artillery fire.
While tensions have eased, longstanding issues remain unresolved.
The US informed last month after the ceasefire announcement both India and Pakistan had agreed to meet at a neutral venue to address their differences, though New Delhi has so far publicly ruled out bilateral talks with Islamabad.
“I can’t speak to what’s on the mind or the plans of the President,” said State Department Spokesperson Tammy Bruce in response to a question about the American president’s offer to mediate after the ceasefire.
“What I do know is that I think we all recognize that President Trump in each step that he takes, it’s made to solve generational differences between countries, generational war,” she continued. “So it doesn’t – it shouldn’t surprise anyone that he’d want to manage something like that.”
Bruce maintained Trump had the ability to bring enemies “to the table to have conversations that nobody thought was possible.”
She added that she hoped “something like that” could be resolved during the current American administration’s term in office, referring to the Kashmir dispute.
In a related development, the State Department spokesperson confirmed a Pakistani parliamentary delegation led by Bilawal Bhutto-Zardari met last week with senior State Department officials, including Under Secretary for Political Affairs Allison Hooker.
While she did not reveal details of the discussions, Bruce said the talks covered counterterrorism cooperation and US support for the India-Pakistan ceasefire.
The Pakistani delegation is currently visiting key global capitals to present Islamabad’s perspective on the limited war with India while lobbying the international community to press India to return to dialogue over Kashmir and other issues.
 


Pakistan targets passive incomes, foreign e-commerce in push for $50 billion tax haul

Updated 34 min 51 sec ago
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Pakistan targets passive incomes, foreign e-commerce in push for $50 billion tax haul

  • Pakistan plans to impose digital tax on foreign vendors, including Chinese e-commerce platforms
  • Local trade bodies call the revenue collection target ‘unrealistic’ amid mixed budget response

KARACHI: The government has “gone heavy” on taxing passive incomes and foreign online vendors, including Chinese e-commerce platforms, said an economic expert Tuesday, as it seeks to raise over Rs14 trillion ($50 billion) in taxes in the next fiscal year, an ambitious target trade bodies have criticized as “unrealistic.”

Finance Minister Muhammad Aurangzeb had unveiled Pakistan’s Rs17.6 trillion ($62 billion) federal budget for 2025-26 earlier in the day, saying the Federal Board of Revenue (FBR) would target Rs14.13 trillion in tax collection, which is nine percent higher than the outgoing year’s target.

“The government has gone heavy in terms of taxes on passive income like tax on bank deposits income has gone up,” Shankar Talreja, director research at the Topline Securities, told Arab News.

Prime Minister Shehbaz Sharif’s administration is aiming for 4.2 percent GDP growth and a fiscal deficit of 3.9 percent in line with commitments made to the International Monetary Fund (IMF) during recent negotiations.

The IMF has pushed Pakistan to broaden its tax base, including income from retail, agriculture and real estate sectors, while ensuring social protection and priority spending.

Talreja called the new budget a “continuation of fiscal discipline.” His comments referred to the government’s plan to increase tax on interest income by five percentage points to 20 percent, excluding income from the National Savings Scheme.

With one of the region’s lowest tax-to-GDP ratios, Pakistan is under pressure to raise it to 14 percent under the IMF’s $7 billion loan program.

DIGITAL TAX ON FOREIGN VENDORS

In a first, the government plans to introduce the Digital Presence Proceeds Tax Act, 2025, to tax income earned by foreign vendors operating in Pakistan’s digital space.

“This is specific to foreign vendors, i.e. Chinese e-commerce websites,” Talreja said, referring to platforms like Temu. He added those buying from such vendors could also face an additional five percent tax.

Aurangzeb said banks, financial institutions and licensed exchange companies would collect the tax on transactions involving goods or services provided by foreign traders within the Pakistani domain.

“Essentially this is to be paid by vendors, but let’s see if they pass it on to consumers,” Talreja said, noting the move could fuel inflation if the tax burden is transferred. “Nonetheless, items coming through foreign vendors doesn’t hold a major pie in inflation basket.”

FBR OVERHAUL

Aurangzeb also announced an FBR transformation plan to address Pakistan’s estimated Rs5.5 trillion tax gap, nearly half of its potential receipts. Talreja emphasized the significance of the move, saying it was part of the government’s plan to raise the tax-to-GDP ratio from 10 to 14 percent.

“It is not possible [for the government] to stabilize the economy and achieve national targets without transforming the FBR,” he continued.

To clamp down on non-compliant businesses, the government plans to freeze bank accounts, block property transfers, and seal premises of unregistered entities evading sales tax.

Withholding tax on bank transactions by non-filers has been raised to one percent from 0.6 percent, and tax on e-commerce transactions doubled to two percent.

SMUGGLING AND SOLAR IMPORTS

The FBR will be empowered to confiscate goods lacking original tax stamps or barcodes under its track and trace system, with the aim of curbing smuggling, especially in tobacco, and supporting the formal industry.

“These measures send a clear message that the law-abiding people and companies will get facilities and the tax defaulters will be made accountable effectively,” Aurangzeb said during his budget speech.

The government will also apply 18 percent sales tax on online traders operating through courier and logistics firms to ensure parity with traditional retailers. Imported solar panels will face the same tax, a move designed to protect local manufacturers.

CUSTOMS REFORMS AND RELIEF MEASURES

Proposed customs reforms include new laws to promote pre-arrival clearance of goods and reduce port delays and litigation.

To support businesses, the government has offered a 0.5 percent reduction in super tax on income slabs between Rs200 million ($708,692) and Rs500 million ($1.78 million), according to JS Global Capital’s initial review.

The 15 percent capital gains tax on stocks remains unchanged, but a 25 percent tax will apply to income from loans to encourage investment in equities. Withholding tax on property purchases has been lowered by 1.5 percent across various slabs.

According to Talreja, the measures aim to ensure the government does not exceed its 3.9 percent fiscal deficit target, a milestone that, if achieved, would mark the lowest in 21 years.

“The ultimate objective of the government in the FY26 budget was to achieve primary surplus over 2% and total deficit of less than 4%,” he said.

BUSINESS COMMUNITY REACTS

Meanwhile, the business community’s response to the proposed tax structure remained mixed, with some trade bodies expressing concern over the government’s reliance on existing taxpayers rather than expanding the tax net.

Leaders at the Karachi Chamber of Commerce and Industry (KCCI), including Zubair Motiwala and Muhammad Jawed Bilwani, described the budget as a “camouflage” document that offered “no incentives for growth” and failed to reduce the high cost of doing business.

“The budget may satisfy external lenders but does not offer any practical hope for businesses or the wider population,” Motiwala said, warning that continued pressure on the formal sector could shrink economic output rather than expand it.

By contrast, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) offered a more positive reaction. President Atif Ikram Sheikh welcomed the simplification of tax return forms for small and medium enterprises along with employees, calling it “a long-standing demand of the FPCCI.”

He also praised the reduction in super tax and the abolition of duty on property transfers, though he called the increase in the tax collection target “unrealistic.”

FPCCI Senior Vice President Saqib Fayyaz Magon expressed disappointment over the taxation of e-commerce and the lack of relief packages for IT, minerals and fishing sectors.

“E-commerce should not have been taxed,” he said, adding the budget ignored several proposals submitted by the FPCCI.


Pakistan urges urgent water reforms as India tensions escalate, climate risks mount

Updated 11 June 2025
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Pakistan urges urgent water reforms as India tensions escalate, climate risks mount

  • In the outgoing fiscal year, government completed 34 of 59 water-related projects at a cumulative cost of $1.06 billion
  • Additional $368 million had been allocated for continued investment in ongoing schemes, finance minister says

ISLAMABAD: Pakistan must overhaul its water management system “on a war footing,” Finance Minister Muhammad Aurangzeb said on Tuesday, as the country grapples with intensifying climate threats and renewed tensions with neighboring India over transboundary river flows.

Hostility between nuclear-armed neighbors Pakistan and India is high after they struck a ceasefire on May 10 following their most intense military confrontation in decades. The latest escalation, in which the two countries’ militaries traded missile, drones and artillery fire, was sparked after India accused Pakistan of supporting militants who attacked dozens of tourists in Indian-administered Kashmir on April 22, killing 26. Islamabad denies involvement.

Following the attack, Delhi unilaterally “put in abeyance” the Indus Waters Treaty of 1960, which governs the usage of the Indus river system. The accord has not been revived despite the rivals agreeing on a ceasefire on May 10.

Delivering the federal budget speech for fiscal year 2025–26, the finance minister said India’s decision to suspend the decades-old water sharing mechanism had added urgency to the longstanding issue of water security. 

“In recent days, following the Pakistan-India war, India has threatened to block the waters meant for Pakistan. India is trying to use water as a weapon. I want to make it clear that water is vital to Pakistan’s survival and no stoppage in this regard will be tolerated,” Aurangzeb told parliament during the budget speech. 

“At the same time, it is essential that we expand our water reservoirs on a war footing. The government, despite its limited resources, will ensure the implementation of its water reservoir projects.”

Islamabad had said after India suspended the Indus Waters Treaty that it considered any attempt to stop or divert the flow of water belonging to Pakistan to be an “act of war.”

About 80 percent of Pakistani farms depend on the Indus system, as do nearly all hydropower projects serving the country of some 250 million.

Despite resource constraints, Aurangzeb said the government was committed to expanding its storage capacity and revamping its water infrastructure, adding that a detailed implementation plan would be announced in the coming days.

The minister also described climate change as an “existential threat” to Pakistan, saying the country was among the most affected nations due to its impact.

Aurangzeb said the government had given significant attention to climate finance in the last 16 months and issued green sukuk not only to lower its carbon footprint but also provide investors with a chance to support environmental initiatives.

Aurangzeb cited Pakistan’s 2018 National Water Policy as the foundation for a renewed push to manage water resources more efficiently and equitably.

Among key goals, he said, was expanding water storage by 10 million acre-feet, increasing water-use efficiency by 30 percent and deploying real-time discharge monitoring systems to reduce wastage, which is currently estimated at 33 percent.

He also said in the outgoing fiscal year, the government completed 34 of 59 water-related projects at a cumulative cost of Rs295 billion ($1.06 billion).

An additional Rs102 billion ($368 million) had been allocated for continued investment in ongoing schemes, the finance minister added. 


Pakistan calls on US, UK to urge India to come for dialogue at neutral location

Updated 10 June 2025
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Pakistan calls on US, UK to urge India to come for dialogue at neutral location

  • After brokering May 10 ceasefire, US had said Pakistan and India had agreed “to talks on a broad set of issues at a neutral site”
  • Weeks after worst military confrontation in decades, India and Pakistan have dispatched top lawmakers to press their cases in US, UK

ISLAMABAD: The head of an official delegation visiting London to present Islamabad’s position following a recent military standoff with New Delhi said on Tuesday the United States and the United Kingdom should encourage India to come for dialogue at a neutral location.

Weeks after their worst military confrontation in decades, India and Pakistan dispatched top lawmakers to press their cases in the United States, where President Donald Trump has shown eagerness for diplomacy between them. The Pakistan delegation is currently in London in the next stop of its mission and will go onwards to Brussels.

Gunmen on April 22 massacred 26 tourists on the Indian-administered part of Kashmir in the deadliest attack on civilians in decades in the scenic region that has seen a long-running insurgency and is disputed between India and Pakistan since 1947. India accused Pakistan of backing the assailants — which it denies — and launched strikes on Pakistani territory.

More than 70 people were killed in missile, drone and artillery fire on both sides for around four days before the US and other allies brokered a ceasefire on May 10. US secretary of state Marco Rubio also said at the time the two nations had agreed “to start talks on a broad set of issues at a neutral site.” He did not specify when the talks would take place or where.

“As part of our achieving this ceasefire, it was agreed at the time that going forward, we would have a dialogue at a neutral location, covering all friction points,” said Bilawal Bhutto Zardari, the head of the Pakistani delegation and the scion of the political Bhutto dynasty.

Bhutto Zardari, who was speaking to BBC Radio, said it seemed from recent statements by Indian leaders and actions of the government in New Delhi that they were not in favor of pursuing talks.

“We still believe that the United States and other allies can engage with India as a friend and explain to them that these decisions are not in their interest,” he said. “Similarly, here in the United Kingdom, you have a long history with India and Pakistan. [Disputed] Kashmir is the unfinished agenda of the partition [of India and creation of Pakistan in 1947] and forms the root cause of our conflict.

“Your [UK] government too is well-placed to speak to the Indian government as a friend and explain to them that refusing to engage with their neighbor, for two nuclear-armed countries to have no dispute resolution mechanism, is not in anybody’s interest.”

Separately, Bhutto Zardari led Pakistan’s delegation in a discussion with the Financial Times Editorial Board in London.

“We reaffirmed Pakistan’s abiding commitment to peace, emphasizing that dialogue, not domination, remains the only sustainable path forward with India,” the leader wrote on X.

“Expressed grave concern over the erosion of strategic stability: India’s violations of the Indus Waters Treaty, the weaponization of water, and the dangerous descent toward conflict in a nuclearized region, a trajectory that threatens to condemn future generations to perpetual insecurity.”

 


Pakistan announces income tax relief for salaried class in FY2025-26 budget

Updated 10 June 2025
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Pakistan announces income tax relief for salaried class in FY2025-26 budget

  • Tax rate for those earning between $2,128–$4,255 annually to be cut from 5% to 2.5%
  • Pakistan’s tax-to-GDP ratio remains below 10%, among the lowest in the region

ISLAMABAD: Pakistan announced significant income tax relief for the salaried class on Tuesday as it announced its federal budget for the fiscal year 2025-26, aiming to ease the burden on working people amid high inflation and economic uncertainty.

Pakistan’s tax-to-GDP ratio remains below 10%, among the lowest in the region. The government has pledged to raise this ratio to 14% through tax reforms, digital enforcement, and expanding the tax base.

“First of all, we are providing relief where it is most needed, relief for the salaried class,” Finance Minister Muhammad Aurangzeb, presenting his first full-year budget in the National Assembly, said.

“In this regard, there is a proposition for a significant reduction in the income tax slabs for the working class.”

Aurangzeb said the income tax rate for individuals earning between Rs600,000 and Rs1.2 million ($2,128–$4,255) annually would be cut from 5% to 2.5%.

“For those earning up to Rs22,000,000 [$7,788], the tax rate has been proposed at 11% instead of 15%. Similarly, those who earn a higher salary, there is a proposition of tax reduction,” the finance minister said.

“For those who are earning between Rs22,000,000 [$7,788] up to Rs32,000,000 [$11,328], the tax rate has been proposed to be reduced from 25% to 23%.”

For high-income earners making over Rs10 million ($35,460) annually, a 1% reduction in the additional surcharge has been recommended to help curb the ongoing brain drain, the minister said.

Aurangzeb described the changes as part of broader efforts to simplify the tax structure and “strike a balance between inflationary pressures and take-home pay.”

The federal budget, with a total outlay of Rs17.57 trillion ($62 billion), comes as Pakistan seeks to stabilize its economy under a $7 billion International Monetary Fund (IMF) bailout program approved last year.

The budget also includes a 20% increase in defense spending, while total government expenditure is expected to be 7% lower year-on-year compared to the last fiscal, reflecting fiscal consolidation goals tied to IMF negotiations.

The proposed budget will be debated in parliament before final approval.