Pakistan tax-to-GDP ratio rises 10.8% in FY25 second quarter, below IMF target

Pakistan tax-to-GDP ratio rises 10.8% in FY25 second quarter, below IMF target
A man checks the quality of rice at a grocery shop in Karachi on September 26, 2024. (AFP/File)
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Updated 30 January 2025
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Pakistan tax-to-GDP ratio rises 10.8% in FY25 second quarter, below IMF target

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

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’s first ‘Made in Pakistan’ expo inaugurated in Jeddah to strengthen Saudi trade ties

Pakistan’s first ‘Made in Pakistan’ expo inaugurated in Jeddah to strengthen Saudi trade ties
Updated 11 sec ago
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Pakistan’s first ‘Made in Pakistan’ expo inaugurated in Jeddah to strengthen Saudi trade ties

Pakistan’s first ‘Made in Pakistan’ expo inaugurated in Jeddah to strengthen Saudi trade ties
  • Commerce Minister Jam Kamal Khan calls the event a testament to enduring Saudi-Pak relationship
  • The minister emphasizes joint ventures targeting African, Central Asian and Far Eastern markets

ISLAMABAD: Federal Minister for Commerce Jam Kamal Khan inaugurated the country’s first-ever solo “Made in Pakistan” exhibition in Jeddah, Saudi Arabia, on Wednesday, marking a significant milestone in the Saudi-Pak trade relations.

Saudi Arabia presents a key export opportunity for Pakistani businesses, given its strong consumer demand, large expatriate workforce and ambitious Vision 2030 economic reforms that emphasize diversification and foreign investments.

Pakistan has sought to strengthen business-to-business (B2B) ties with the Kingdom, with both sides announcing during Prime Minister Shehbaz Sharif’s visit to Riyadh last October that they had signed 34 memorandums of understanding and agreements worth $2.8 billion to enhance private sector collaboration and commercial partnerships.

Addressing a gathering of Saudi officials, business leaders and diplomats at the three-day event, the Pakistani minister emphasized the importance of enhancing bilateral economic cooperation and exhibiting his country’s diverse industrial potential.

“This event is a testament to the enduring relationship between Pakistan and Saudi Arabia, rooted in shared faith, cultural ties and strategic partnership,” he said, according to a statement released by his office.

Khan expressed his gratitude to Saudi Arabia for its unwavering support in organizing the exhibition.

He maintained the event served as a platform to present Pakistan’s best products and services, including textiles, sports goods, light engineering, food items, construction materials and more.

The minister underlined the government’s commitment to expanding trade and investment ties with Saudi Arabia through strategic economic initiatives.

He noted that Pakistan’s evolving industrial base and dynamic economy offered immense potential for collaboration, particularly in sectors like food security, energy, mining and human resource development.

“Our government is dedicated to fostering an investment-driven environment, and Saudi Arabia, with its Vision 2030, is ideally positioned to benefit from these opportunities,” he said.

Khan praised the contributions of the 2.7 million-strong Pakistani diaspora in Saudi Arabia, describing them as a cornerstone of the countries’ bilateral ties. He also highlighted that over 1.7 million Pakistani workers had migrated to the

Kingdom in the past five years, making it the top destination for Pakistani emigrants.

The minister stressed the need for joint efforts in skill development to further enhance employment opportunities for Pakistanis in Saudi Arabia.

He called for deeper collaborations between Pakistani and Saudi businesses, emphasizing the potential for joint ventures targeting markets in Africa, Central Asia, and the Far East.

“Together, we can explore new markets and create successful trilateral partnerships, leveraging the vast experience of Pakistani entrepreneurs,” he said.

Khan described the exhibition as a symbol of growing economic partnership between our nations, saying it would open new avenues for cooperation and mutual growth.

The Made in Pakistan Exhibition, featuring 137 Pakistani companies, has attracted a number of potential buyers and companies.

The event will run from February 5 to 7.


Pakistan vows legal job pathways abroad as bodies from Morocco boat tragedy arrive in Islamabad

Pakistan vows legal job pathways abroad as bodies from Morocco boat tragedy arrive in Islamabad
Updated 32 min 22 sec ago
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Pakistan vows legal job pathways abroad as bodies from Morocco boat tragedy arrive in Islamabad

Pakistan vows legal job pathways abroad as bodies from Morocco boat tragedy arrive in Islamabad
  • Chaudhry Salik Hussain says government signing agreements with other states for legal migration means
  • Pakistan said 13 bodies from January 16 boat tragedy had been identified following verification process

ISLAMABAD: A senior Pakistani minister said on Wednesday night the government was working to set up legal means for the youth to go abroad and make a living after the bodies of four nationals who died in a boat capsizing near Morocco last month while trying to reach Europe arrived in Islamabad, according to state media.

The Pakistani government has made several arrests of suspected human smugglers in recent weeks after the boat carrying 86 migrants to Europe, including several Pakistanis, capsized on Jan. 16, according to the rights group Walking Borders.

Moroccan authorities said a day later that 36 people had been rescued, while Pakistan’s foreign office confirmed that 22 of them were its nationals. Pakistani officials said earlier this week that 13 bodies had been identified following an extensive verification process.

“I have no words to express my pain and feeling over this incident,” Federal Minister for Overseas Pakistanis and Human Resource Development Chaudhry Salik Hussain was quoted as saying by the Associated Press of Pakistan, as the bodies of the four Pakistani nationals arrived at Islamabad International Airport.

He said his ministry was working to create legal avenues for employment abroad to prevent such tragedies.

“Our ministry is creating many opportunities for the youth by setting up offices at the local level so that the middlemen mafia can be eliminated,” he added.

Hussain said the government was signing agreements with several countries to facilitate legal migration pathways and prevent human smuggling networks from exploiting desperate job seekers.

The latest boat disaster is part of a growing trend of dangerous sea journeys by migrants seeking to reach developed countries.

In June 2023, an overcrowded vessel sank in international waters off the Greek town of Pylos, killing hundreds of migrants, including 262 Pakistanis, in one of the deadliest Mediterranean shipwrecks on record.

More recently, five Pakistani nationals died in a shipwreck off the Greek island of Gavdos on Dec. 14.


The sea was once a blessing for the Pakistani city of Gwadar. But it’s become a curse

The sea was once a blessing for the Pakistani city of Gwadar. But it’s become a curse
Updated 59 min 12 sec ago
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The sea was once a blessing for the Pakistani city of Gwadar. But it’s become a curse

The sea was once a blessing for the Pakistani city of Gwadar. But it’s become a curse
  • In several areas near Gwadar, waves have swallowed up mosques, schools and settlements
  • Authorities have built seawalls, but they are not enough to resolve the climate change issue

GWADAR, Pakistan: There was a time when few people in the coastal Pakistani city of Gwadar understood what climate change was. After a decade of extreme weather, many more do.

Rain battered Gwadar for almost 30 consecutive hours last February. Torrents washed out roads, bridges, and lines of communication, briefly cutting the peninsula town off from the rest of Pakistan. Homes look like bombs have struck them and drivers swerve to avoid craters where asphalt used to be.

Gwadar is in Balochistan, an arid, mountainous, and vast province in Pakistan’s southwest that has searing summers and harsh winters. The city, with about 90,000 people, is built on sand dunes and bordered by the Arabian Sea on three sides, at a low elevation that makes it vulnerable to climate change in a country that has already seen its share of catastrophe from it.

“It’s no less than an island nation situation,” warned Gwadar-based hydrologist Pazeer Ahmed. “Many low-lying areas in the town will be partially or completely submerged if the sea level continues to rise.”

Houses reflect in standing water in a neighborhod of Gwadar, Pakistan, on January 14, 2025. (AP)

The sea, once a blessing for Gwadar’s fishing and domestic tourism sectors, has become an existential threat to lives and livelihoods.

Warming oceans mean bigger and more powerful waves, and those waves get whipped higher by summer monsoon winds. Warmer air holds more moisture — about 7 percent more per degree Celsius (4 percent per degree Fahrenheit) — and that means more big rain events.

“Waves have become more violent due to the rising sea temperatures and eroded beaches,” said Abdul Rahim, deputy environment director at Gwadar Development Authority. “The tidal actions and patterns have changed. Hundreds of homes have been washed away. It is very alarming.”

Melting glaciers contribute to rising sea levels, another cause of coastal erosion. The sea level at Karachi rose almost 8 inches (almost 20 centimeters) between 1916 and 2016, according to data from the National Oceanic and Atmospheric Administration. It’s projected to rise another half-inch (about 1.3 centimeters) by 2040.

A laborer works at the construction site of a drainage system by the local government in the downtown of Gwadar, Pakistan, on January 13, 2025. (AP)

In areas near Gwadar, like Pishukan and Ganz, waves have swallowed up mosques, schools, and settlements. There are gashes in the cliffs at the popular picnic spot of Sunset Park, and rocks have cascaded onto the shore. Beaches run flat for dozens of kilometers because no structures remain on it.

Authorities have built seawalls from stone or concrete to hold back saltwater intrusion. But they’re a small solution to a massive problem as Gwadar’s people and businesses are fighting climate change on different fronts.

Saltwater pools on government land, salt crystals glistening in the sunshine. In the Shado Band neighborhood, former local councillor Qadir Baksh fretted about water seeping up through the ground and into his courtyard every day, held at bay only by regular pumping. Dozens of houses have the same problem, he said.

Amanullah shows a wall impacted by rising water in the compound of his home in a neighborhood of Gwadar, Pakistan, on January 14, 2025. (AP)

Officials, including Ahmed and Rahim, said changes in land use and unauthorized building are worsening flooding. Locals said some major construction projects have destroyed traditional drainage pathways.

Gwadar is the centerpiece of a massive Chinese-led initiative to create an overland route between its western Xinjiang region and the Arabian Sea through Gwadar. Hundreds of millions of dollars have poured into the town to create a deep seaport, an international airport, expressways and other infrastructure. The more sensitive projects, especially the port, are tightly secured by the Pakistani military, out of sight and off-limits to the public.

But there is no proper sewage or drainage system for residents despite a decade of foreign investment, and Gwadar’s porosity, high water table, rising sea levels, and heavier rainfall are rocket fuel for the town’s vulnerability.

There’s nowhere for the water to go.

People walk along a beach next to a cliff in Gwadar, Pakistan, on January 13, 2025. (AP)

“In the past when it rained, the water disappeared up to 10 days later,” said Baksh. “But the rain that came last year hasn’t gone. The water rises from the ground with such speed it will reach the four walls of my home if we don’t run the generator every day to extract it. Officials say it’s because of climate change but, whatever it is, we’re suffering.”

Gwadar’s fishing community is also hurting. Catches are smaller, native fish are disappearing, and migration patterns and fishing seasons have changed, said Ahmed and Rahim. There is also algae bloom and the invasion of unwanted marine species like pufferfish.

Illegal fishing and foreign trawlers are responsible for a few of these things, but it’s mostly rising sea temperatures.

People have migrated from places like Dasht and Kulanch because of water scarcity. What agriculture there was in Gwadar’s surrounding areas is vanishing due to loss of farmland and livestock deaths, according to locals. It’s part of a wider pattern in which Pakistan’s farmers are seeing declining crop yields and increasing crop diseases due to climate extremes, particularly floods, droughts and heat waves, according to the United Nations’ Intergovernmental Panel on Climate Change.

“There are heat waves and dust storms in Gwadar,” said Ahmed. “But the main impact of climate change here is that there is too much water and not enough of it. If nothing is done to address this problem, we will have no option but to retreat.”


Pioneering Pakistan woman MMA fighter breaks barriers ... and arms

Pioneering Pakistan woman MMA fighter breaks barriers ... and arms
Updated 06 February 2025
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Pioneering Pakistan woman MMA fighter breaks barriers ... and arms

Pioneering Pakistan woman MMA fighter breaks barriers ... and arms
  • Anita Karim comes from Gilgit-Baltistan and is nicknamed ‘the arm collector’ due to her fierce performances
  • She originally trained in taekwondo and jiu-jitsu before discovering MMA at high school in Islamabad

ISLAMABAD: Growing up in the rugged northern reaches of Pakistan, Anita Karim honed her combat skills fighting with three older brothers who pulled no punches.

The bruising experience prepared her for a career in Mixed Martial Arts (MMA) — blending Thai kickboxing, Japanese judo and wrestling — and she is now the nation’s pre-eminent woman fighter.

“The village where I come from, they support women fighters,” she told AFP. “But when I started MMA, they had no awareness of this sport.”

“They said it’s a men’s game exclusively and a woman cannot do that one,” the 28-year-old said.

In this photograph taken on December 11, 2024, Anita Karim (R) and Bushra Ahmed, mixed martial arts (MMA) fighters, take part in a training session at a club in Islamabad. (AFP/File)

Eight years ago she won the right to enter the ring, swiftly becoming Pakistan’s first internationally competing woman MMA fighter and appearing in Asia’s biggest promotion, ONE Championship.

“Now misogynistic comments and criticisms have stopped,” she said at her gym in the capital Islamabad, where she trains without heating in the octagonal “cage” where fighters face off.

It is unusual for women to take up sport in deeply conservative Pakistan, where it is often forbidden by families.

But Karim’s native Gilgit-Baltistan region — where female modesty codes are more relaxed — has become an incubator for women’s sport.

In October, two sisters from the region, Maliha and Maneesha Ali, brought back gold and bronze from a taekwondo competition in Indonesia.

Karim’s brother Uloomi, who became her coach after being on the receiving end of her blows, said support began at home.

In this photograph taken on December 11, 2024, Anita Karim (2L), a mixed martial arts (MMA) fighter, warms up with her brother and coach Uloomi (L) before a training session at a club in Islamabad. (AFP/File)

“When she showed the commitment, the dedication, we knew that she was going to make it,” said the 33-year-old, standing in their family-owned gym.

“We knew that she could take it and we did not have any issues with her training with any guy.”

Surprisingly timid outside the ring, Karim is at the head of a cohort of Pakistani female MMA fighters — five from Gilgit-Baltistan, according to the regional government.

“She’s shy, but when she enters the cage, it’s completely different,” said Uloomi, who has also competed in the sport.

Her speciality is the armlock, deployed with an agonizing all-body grip, which aims to force an opponent to “tap out” in submission before bones are broken or joints wrecked.

In 2022 she was pictured atop a podium in Pakistan with two opponents wearing slings on their injured arms — a performance that earned her the nickname “the arm collector.”

“They could have tapped to stop the fight, but they didn’t, so I went through with it,” she said.

In this photograph taken on December 11, 2024, Anita Karim (top) and Bushra Ahmed, mixed martial arts (MMA) fighters, take part in a training session at a club in Islamabad. (AFP/File)

In her hometown, Karim originally trained in taekwondo and jiu-jitsu before discovering MMA at high school in Islamabad — to the consternation of her community back home.

“A lot of people close to me criticized me, but that’s part of the game. Now they know how it works,” she said.

The message emanating from her hometown now is one of pride.

“The way she has made the name of Gilgit-Baltistan and all of Pakistan shine on the international level, serves as a lesson,” said the regional government’s sports chief Shah Muhammad.

After losing on her professional debut in 2018, where the referee refused to let her fight unless she raised her leggings above the knee, she moved to Thailand to train at an MMA academy.

She now earns a living from competition prizes, modest government grants and coaching at her Islamabad gym.

When she returns after competitions, small crowds gather to greet her at the airport and she is followed by a fledgling community of female fighters.

They too want to turn professional in a nation where only one in five women have jobs, according to United Nations figures.

“Anita is a role model for us,” said Bushra Ahmed, a few years Karim’s junior and out of breath as she trains alongside her, another woman and a dozen men.

Karim also wants to “give Pakistani women confidence and self-defense techniques,” with over 80 percent having been victims of public harassment, according to the UN.

Recently she “hit a man who was harassing me in a market in Islamabad,” Karim said.

“He left with his face stained with blood.”


Pakistan eyes tech-driven export growth as local firms join AI event in UAE

Pakistan eyes tech-driven export growth as local firms join AI event in UAE
Updated 56 min 24 sec ago
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Pakistan eyes tech-driven export growth as local firms join AI event in UAE

Pakistan eyes tech-driven export growth as local firms join AI event in UAE
  • AI Everything Global 2025 is one of the largest public-private artificial intelligence gatherings of the year
  • Eleven Pakistani companies and two start-ups are attending the event featuring several global tech giants

ISLAMABAD: Pakistan is participating in AI Everything Global 2025, a major artificial intelligence event in the United Arab Emirates, with hopes of leveraging technology to drive a significant jump in exports, its ambassador said on Wednesday.

AI Everything Global 2025 is one of the largest public-private AI gatherings of the year, bringing together over 500 exhibitors and 150 investors from 70 countries. The event, which began in Abu Dhabi on February 4 and continues in Dubai from February 5-6, serves as a platform for industry leaders, governments and innovators to explore AI’s impact on economic transformation.

It features global tech giants including ASUS, IBM, Zoom, Oracle and Intel presenting cutting-edge AI solutions.

Pakistan has made its presence felt at the event with a delegation of over 30 industry leaders, backed by the Pakistan Software Export Board (PSEB) and the Trade Development Authority of Pakistan (TDAP). The Commercial Section of Pakistan’s Consulate in Dubai is facilitating participation, which aims to strengthen Pakistan’s AI footprint and explore collaborations in the growing digital economy.

“There are 11 Pakistani companies and two start-ups [attending the event],” Ambassador Faisal Niaz Tirmizi said. “There are 30 delegates, and it’s a great opportunity [for them].”

“I always say if we harness technology, because the world depends on technology, our total [Pakistani] exports are $30 billion, and we can export even more through technology,” he added.

Particpants are pictures at the AI Everything Global 2025 in Dubai, UAE, on February 5, 2025. (AiEverythingGlobal/X)

The potential of Pakistan’s tech industry was also highlighted by Abu Bakar, CEO of PSEB, who said the country was making strides in IT exports.

“We have just started,” he said. “Our [IT] export was $3.2 billion last year. I think we have a lot of aspirations. God willing, this year [the IT export] will be more than $4 billion.”

“We have to go up to $15 billion,” he continued. “For that, everyone has to work together for brand Pakistan and tech destination Pakistan. And we feel very happy to see that our companies get a lot of recognition here [in the UAE].”

The event comes as AI is projected to contribute $100 billion to the UAE’s GDP by 2030, aligning with the country’s National Strategy for Artificial Intelligence 2031 and its ambition to become a global AI leader.

Pakistan’s participation reflects its efforts to integrate AI into its economy, upskill its workforce and expand the country’s digital exports.