Pakistan envoy identifies textiles, agriculture as key sectors to focus in exports to Saudi Arabia

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.

ISLAMABAD: The World Health Organization on Thursday commended Pakistan for having reduced polio cases by over 99% since 1994, saying it would stand alongside Pakistan to “run the last mile” and end the crippling disease. 
Pakistan reported at least 73 cases last year, up from only one in 2021, and the disease is now rapidly spreading in the country’s most volatile regions, the northwestern Khyber Pakhtunkhwa province and Balochistan in the southwest. The first case of polio was reported last Wednesday from Khyber Pakhtunkhwa.
Pakistan, along with neighboring Afghanistan, remains one of the last two polio-endemic countries in the world. In the early 1990s, Pakistan reported around 20,000 cases annually, but by 2018, the number had dropped to just eight cases. Only six cases were reported in 2023, and one in 2021.
However, Pakistan’s polio eradication efforts have faced several challenges in recent years, including attacks by militants and misinformation spread by religious hard-liners.
“Since 1994, Pakistan has reduced polio cases by over 99%,” the WHO said on X after Islamabad hosted the Technical Advisory Group for Polio Eradication, a crucial forum that engages global experts and partners to “reinforce the response and seize the historic opportunity to end the global threat of polio.”
 “WHO stands alongside Pakistan to run the last mile and end this global threat. No child will be safe from polio until all children are safe.”

On Wednesday, Hanan Balkhy, WHO’s regional director for the Eastern Mediterranean, cautioned that the eradication of polio in Afghanistan and Pakistan was threatened by US President Donald Trump ordering an unprecedented 90-day suspension of almost all foreign aid. On his first day back in the White House, Trump also announced he was withdrawing the United States from WHO.
In a video posted on X on Jan. 28, WHO’s Deputy Director Dr. Mike Ryan said despite support from donors in 2025, there remained a funding gap of $68 million for WHO’s polio eradication work in Pakistan.
“Urgent funding is required so the hard-fought gains are not jeopardized,” he cautioned. 

The Pakistan Polio Eradication Program is scheduled to hold the country’s first nationwide vaccination drive of this year from Feb. 3-9.