Moody’s has cautioned that social risks in Pakistan are likely to increase due to the conditions associated with new multilateral financing. The agency projects that interest payments in Pakistan will account for nearly 40 percent of total expenditures by 2025, up from about 25 percent in 2021.

In its report titled “2025 Outlook – Stable as Economic Risks Recede, Geopolitical and Trade Risks Persist,” Moody’s noted that Pakistan has recently agreed to a new $7 billion program with the International Monetary Fund (IMF) to help alleviate liquidity issues.

However, financing from concessional lenders may not fully cover the maturing debt of sovereigns. Additionally, fulfilling the conditions of new multilateral financing can be challenging and may heighten social risks.

The report indicated that government debt affordability in Pakistan will remain weaker than it was prior to the pandemic. Among countries in the Asia-Pacific region, Pakistan is particularly susceptible to food security crises. Overall, government debt affordability in emerging and frontier markets is expected to stay lower than before the pandemic, especially in Pakistan (Caa2 positive), Nigeria (Caa1 positive), and Egypt.

Several sovereign nations will face eurobond redemptions exceeding 10 percent of their available international reserves in 2025, including Bahrain (B2 stable) and Tunisia. Many sovereigns will also have significant local currency financing needs, with gross domestic financing requirements surpassing 10 percent of GDP in both Pakistan and Zambia (Caa2 stable), even post-default. Consequently, liquidity risks in both local and foreign currencies will remain a major factor in potential defaults.

In advanced economies, median debt affordability is projected to be stronger in 2025 compared to pre-pandemic levels, although some gains may be diminished. Greece is an exception, as it is expected to see continued improvements in debt affordability due to deleveraging. Conversely, debt affordability in the US and France is anticipated to decline significantly.

Moody’s also pointed out that geopolitical tensions are contributing to an increase in global military spending. Years of underinvestment and the rising threat from Russia have led many European governments to boost defense budgets to meet NATO’s target of at least 2 percent of GDP. Japan’s Defense Capability Buildup Program is expected to consume an increasingly large portion of its budget in 2025, while India’s defense spending is also projected to rise sharply amid ongoing tensions with China and Pakistan.

The Government of Pakistan collected at least Rs92 billion from mobile phone users in advance tax in the fiscal year 2023-24, marking a 15% increase compared to the last year, according to the finance ministry.

The ministry said this in a report on advance tax paid by users over the last five years in the National Assembly on Monday.

In the previous fiscal year, Rs80 billion was collected while Rs61 billion was gathered in 2022, and Rs55 billion in 2021, and Rs50 billion in 2020.

The advance tax collected from mobile phone users “is adjustable, allowing consumers to claim refunds in their income tax returns.”

In the fiscal year 2024-25 budget, the government ended the ongoing regime of sales tax for mobile phones which utilised a slab-based structure depending on pricing and had nominal sales tax.

The government is charging a flat 18% ad valorem sales tax on all mobile phones up to the value of $500 for the three categories of imported completely built, imported semi-built and locally manufactured completely built.

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For cellphones costing above $500, the sales tax rate will be: 25% ad valorem for imported completely built and 18% for imported semi-built and locally manufactured completely built.

“Concessionary rates create distortions by only benefiting some specific items in the market while the standard rate ensures that everyone gets equal opportunity and market forces work effectively,” the finance minister said in his budget speech on June 12.

Pakistan’s salaried class has become the third-largest contributor to income tax collection in the recently concluded fiscal year (FY24), surpassing even the country’s affluent textile exporters. This comes after a significant increase in income tax revenue from the banking sector, which now holds the top spot.

According to a report by Dawn, The banking sector saw a remarkable 66% rise in income tax contributions, reaching Rs946.08 billion in FY24. This increase reflects the sector’s growing profitability and its significant share of income tax collection, now at 20.88%.

While banks contribute significantly to income tax, their contributions to other taxes like sales tax, federal excise duty, and customs remain relatively low.

The salaried class contributed Rs367.8 billion to income tax in FY24, a 39.42% increase from the previous year. This contribution surpasses that of textile exporters by a significant margin, despite the sector’s export value reaching $16.655 billion in FY24.

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The textile sector’s income tax contribution saw a modest 7.4% increase, reaching Rs111.23 billion. This is attributed to the government’s revised fixed tax regime for exporters and the increased tax rate implemented in the budget.

Petroleum products (POL) remain a major source of federal tax revenue, generating Rs1.195 trillion in FY24. Within this sector, income tax collection rose 6% to Rs413.48 billion.

The power sector has also emerged as a significant revenue generator for the Federal Board of Revenue (FBR). Tax collection from the power sector increased by 38.7% to Rs640.61 billion in FY24. This increase is primarily driven by a surge in sales tax collection, which rose by over 40%.

The high taxation on petroleum products and electricity has placed a heavy burden on the public, leading to increased utility bills and transportation costs. These factors have contributed significantly to the overall inflation rate, which reached 23.41% in FY24.

The federal government has increased the income tax rate for people earning Rs100,000 or above per month in the federal budget for the fiscal year 2024-25.

The tax rate has increased from 2.5% to 5% for those earning between Rs600,000 and Rs1,200,000 per annum.

The government maintained the tax slabs to six, as the tax burden continues to increase on the inflation-burdened salaried class.

The salaried class paid Rs158 billion in taxes during the first half of the last fiscal year, becoming the fourth-largest income tax contributor.

Individuals might think twice before seeing their pay cheque at the start of the month as the new rates have further affected the post-tax earnings of people earning more than Rs600,000 per annum.

Here is your guide to quickly calculate how the new tax rate has affected your post-tax earnings and how much tax you will be paying annually.

We have also reproduced the next tax slab as laid out in the finance bill for FY 2024-25.

Tax slabs

Furthermore, those earning between Rs3,200,000 to Rs4,100,000 per annum will pay a fixed tax of Rs430,000 and 30% on income above Rs3,200,000 will be levied.

For those earning above Rs4,100,000 per annum, a fixed tax of Rs700,000 plus 35% on income above Rs4,100,000 will be applicable.

The government has maintained the existing six tax slabs but has adjusted the tax rates. Previously, the 35% tax rate was applicable on monthly incomes above Rs600,000 (Rs7,200,000 per annum), while the lower slabs had a 27.5% tax rate.

Pakistan’s central bank will likely cut its key interest rate again on Monday in its first policy meeting following the signing of a staff level agreement with the International Monetary Fund and a new state budget, analysts said.

Pakistan and the IMF reached an agreement for the 37-month loan program this month. Tough measures such as raising tax on agricultural incomes and lifting electricity prices have prompted concern among poor and middle class Pakistanis grappling with rising inflation and the prospect of higher taxes.

In June, Pakistan’s central bank cut its key interest rate by 150 bps from an all time high of 22%, in a widely expected move, marking its first rate reduction in nearly four years in its effort to boost growth amid a sharp decline in retail inflation.

However, inflation has slowed down. Pakistan’s consumer price index (CPI) in May rose 11.8% from a year earlier, giving the central bank room to cut, analysts say.

Only one analyst out of 14 predicted that rates would be held at 20.5%; the rest forecast a central bank cut. Seven analysts said they expected a 100 basis-points cut, five a 150 bps cut, while one analyst anticipated a 200 bps cut.

“An inflationary spike following the budget has not materialised as feared,” said Mustafa Pasha, chief investment officer at Lakson Investments.

In June, the central bank warned of possible inflationary effects from the budget, saying limited progress in structural reforms to broaden the tax base meant increased revenue must come from hiking taxes.

The South Asian country set a challenging tax revenue target of Rs13 trillion ($47 billion) for the ongoing fiscal year that started July 1, a near-40% jump from the previous year, and a sharp drop in its fiscal deficit to 5.9% of GDP from 7.4% for the previous year, to secure key funding from the IMF.

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Pasha added that clarity on the IMF programme, stability in the currency markets, and stable foreign inflows trickling into domestic debt and equities, provide “ample comfort to the SBP in continuing to ease the policy rate in July and beyond”.

However, Muhammad Ali, senior investment analyst at AKD securities said that the State Bank of Pakistan is likely to hold rates because it still needs to gauge food inflation for the next several months.

“Food commodities [eg wheat] have significant upside potential,” he said, adding that cuts of 150-200 bps each are possible in September and December policy meetings.

The Federal Board of Revenue (FBR) has slightly lowered its annual tax collection target for the fiscal year 2024-25, from Rs12.97 trillion to Rs12.913 trillion.

This revised target was agreed upon between the FBR and the International Monetary Fund (IMF) after the FBR rationalized its expenditures.

The IMF has stipulated that if the agreed quarterly revenue targets are not met, additional revenue measures will be implemented.

The FBR has set a tax collection target of Rs2.642 trillion for the July-September quarter of FY25, with monthly targets of Rs656 billion for July, Rs898 billion for August, and Rs1.098 trillion for September.

Despite the lower tax target, the overall fiscal deficit and primary surplus targets for the current fiscal year remain unchanged.

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FBR expects to collect Rs50 billion from retailers through the Tajir Dost Special Procedure, 2024 during the current fiscal year and plans a media campaign to promote the Tajir Dost Scheme’s online integration.

Regarding tax notices to approximately 5 million tax evaders identified by McKinsey consulting firm, the FBR has already sent notices to individuals who stopped filing tax returns.

Indian shares reversed early gains to drop marginally in morning trade on Tuesday, with volatility rising ahead of the union budget, due at 11 a.m. IST, which could have a huge bearing on the trajectory of markets.

The NSE Nifty 50 and S&P BSE Sensex opened about 0.3% higher but were trading about 0.2% lower as of 10:22 a.m. IST.

Volatility rose to a six-week-high of 15.79.

“Volatility will remain elevated today as budget announcements will decide the direction of markets in intraday trade,” said ICICI Securities analysts led by Dharmesh Shah.

A market correction cannot be ruled out, given the high valuations, they added.

The Nifty has hit multiple all-time highs through its roughly 13% rally this year, despite a near 6% slide on June 4 when Prime Minister Narendra Modi’s party returned to power but by unexpectedly having to rely on allies.

Still, the index has risen in each of the seven weeks since.

The budget is expected to focus on job creation and boosting consumption, which analysts expect will be positive for sectors such as consumer goods, real estate and autos.

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But, analysts said investors are also cautious of negative surprises, especially related to taxes on capital gains or derivatives trading.

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“If there are no changes in long-term capital gains tax that will be a big relief for the market and the market is likely to react positively to that,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

On the day, 11 of the 13 major sectors logged losses. Federal Bank jumped 2.7% after the central bank cleared the appointment of veteran banker KVS Manian as the lender’s CEO.

It was the top gainer in among mid-caps, which was down 0.2%. Small-caps were 0.5% lower.

People sitting in the federal government and Sindh are “duffers”, former Federal Board of Revenue chairman Shabbar Zaidi has said as he lamented the state of Karachi where more than 25 million people live.

“They are duffers as they don’t understand that by unintentionally committing genocide they destroyed the economy,” he said while appearing on News Insight with Amir Zia aired on Aaj News on Tuesday.

Zaidi was responding to a question related to an “economic genocide of Karachi” which he used in the recent past about Pakistan’s financial hub.

He clarified that he did not support it, but warned the stakeholders that the city was heading towards such a situation.

He interpreted Article 2C of the UN convention on genocide, saying that managing economics in a way that leads to genocide. This case was raised by Bangladeshis in 1971, he said and wondered about the lack of resources in Karachi.

“I am saying economic genocide is not happening, but we are heading towards it. There is a perpetrator of this genocide. Tell me which city has six cantonments and Rangers have been in the city for the past 20 years. Tell me in which city water is sold by hydrants. Tell me which city has 80% of its roads broken,” Zaidi said.

He asked whether the Sindh government had any plan to send Rangers back. “We are the only city where there is the least allocation per person from the provincial budget,” he said.

According to the former FB chairman, Pakistan would not progress until Karachi progresses. “Because of enmity with Karachi, they unintentionally damaged Pakistan.”

He went on to add that exports of Pakistan and Vietnam were $10 billion in 1990, but “today Vietnam’s exports stand at $600 billion and Pakistan’s at $30 billion.” He claimed that such kind of situation is genocide. “If today I file cases under Article 2C, I will win. But I don’t want to win. I want to show them they are duffers by living with them.”

God forbid, Zaidi added that if the economic genocide case were filed, then the first culprit would be the party with the highest number of seats in Karachi.

Tax subject

Zaidi was of the view that the whole country was giving tax on consumption but not on salaries. “Basic law of tax says the consumption tax is equal for poor and rich. Tax should be more on salary not on consumption,” he said.

According to the former FBR chief, the tax recovery on salary was not difficult. “The incompetent governments in the world increase indirect taxes and direct taxes get less.”

He added that tax was considered an urban subject in the country and asked how many butchers and raw milk sellers paid taxes.

“The biggest problem of Pakistan’s taxation is that we think tax can be collected from big cities, not from small cities.”

He went on to add that Prime Minister Shehbaz Sharif, who has been head of the Lahore Chamber of Commerce and Industry, can ask all the shopkeepers to come into the tax net as the country is going through difficult times.

“Either the shopkeepers are dishonest or the government is a hypocrite.”

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He claimed that the opposition parties did not oppose the budget with facts and propositions.

When asked, Zaidi called for friendship with India to improve the economic situation. “First of all, India is not our enemy. You should tell the public about law and order. Tell them what is happening. The state has no enmity with India.”

He added that India did not break the pact as the neighbouring country scrapped Article 370 of its own Constitution.

Prime Minister Shehbaz Sharif has reiterated that he would tolerate any pressure while stressing the need for taking austerity measures to improve the economy.

“If there’s any honest mistake, we’ll rectify that. I will quit if I need to, but I will not come under any pressure, I want that to be loud and clear,” told ministers and Federal Board of Revenue officials in Islamabad.

“We need to tighten our belts and serve the public,” he said, “for the first and last time, we need to act in the national interest.”

He visited the FBR headquarters after the International Monetary Fund agreed to loan Pakistan $7 billion to bolster its faltering economy. The South Asian nation agreed to the deal – its 24th IMF payout since 1958 – in exchange for unpopular reforms, including widening its chronically low tax base.

Pakistan last year came to the brink of default as the economy shrivelled amid political chaos following catastrophic 2022 monsoon floods and decades of mismanagement, as well as a global economic downturn.

It was saved by last-minute loans from friendly countries, as well as an IMF rescue package, but its finances remain in dire straits, with high inflation and staggering public debts.

PM Shehbaz lauded his cabinet for working to make sure the government secured the loan. But he called for pursuing a “difficult journey” to augment the macroeconomic numbers.

“We will have to make sacrifices. Now is the time, it is our responsibility to act speedily and work tirelessly. Only then will this be the final IMF programme in this country,” he said.

“If we want to get rid of loans, we need to consider this IMF programme as the final one,” he said, “we should tax those who are not being taxed.”

Dealing with a downturn

Islamabad wrangled for months with IMF officials to unlock the new loan announced Friday, which will be paid out over three years subject to approval by the organisation’s Executive Board.

It came on condition of far-reaching reforms including hiking household bills to remedy a permanently crisis-stricken energy sector and uplifting pitiful tax takings.

In a nation of over 240 million people and where most jobs are in the informal sector, only 5.2 million filed income tax returns in 2022.

During the 2024-25 fiscal year that started at the beginning of July, the government aims to raise nearly $46 billion in taxes, a 40 percent increase from the previous year.

More unusual methods have seen the tax authority block 210,000 SIM cards of mobile users who have not filed tax returns in a bid to widen the revenue bracket.

Under the deal “revenue collections will be supported by simpler and fairer direct and indirect taxation including by bringing net income from the retail, export, and agriculture sectors properly into the tax system”, IMF Pakistan Mission Chief Nathan Porter said in a statement.

Islamabad also aims to reduce its fiscal deficit by 1.5 per cent to 5.9 per cent in the coming year, heeding another key IMF demand.

The IMF said the loan and its conditions should allow Pakistan to “cement macroeconomic stability and create conditions for stronger, more inclusive and resilient growth”.

But Pakistan’s public debt remains huge at $242 billion, and servicing it will still swallow up half of the government’s income in 2024, according to the IMF.

Analysts have criticised Islamabad’s measures as surface-level reforms aimed at courting the IMF without addressing underlying problems.

“It is hard to not see old patterns in this new IMF deal,” Ali Hasanain, associate professor of economics at the Lahore University of Management Sciences, told AFP.

“The IMF has issued a loan similar in size and conditions as the one agreed to five years ago, and five years before that.”

“Will authorities seize the opportunity thus created to embark on fundamental reforms to how the country is run?” he asked. “You would be well-advised not to hold your breath.”

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Ending taxpayers’ burden

According to PM Shehbaz putting extra taxes on taxpayers was like a “premium for those who don’t pay [taxes] and it’s a penalty for honest taxpayers”. He was of the view that the government should adopt new strategies and employ advanced technology used by tax authorities throughout the world.

“We collect billions, trillions and we’re still going to the World Bank and others. A country cannot run like this,” he said and told the members that he would provide every financial support to acquire the gadgetries required for such a purpose.

The premier reiterated the need for austerity measures.

(With input from AFP)

Following the imposition of new taxes in the 2024-25 budget, prices of cooking oil and ghee have increased in the country.

The prices of cooking oil and other food items have surged due to the new taxes, with cooking oil seeing an increase of Rs 30-40 per kilogram. Additionally, the prices of powdered milk, packaged milk, tea, and other food items have also risen in the month of July.

Here are the latest prices for the cooking oil and ghee according to the brand:

• Rafhan Corn Oil 5 litre: Rs4,900
• OK Cooking Oil 5 litre: Rs2,025
• Dalda Cooking Oil 5 litre: Rs2,585
• Dalda Sunflower Oil 5 litre: Rs2,585
• MEZAN Cooking Oil 5 litre: Rs2,400
• Dalda Cooking Oil 1 litre: Rs525
• Eva Cooking Oil 5 litre: Rs2,590
• Seasons Canola Oil 3 litre: Rs1,351
• Dalda Canola Oil 5 litre: Rs2,585
• Sufi Canola Oil 5 litre: Rs2,600
• Habib Cooking Oil 5 litre: Rs2,445
• Sufi Sunflower Oil 5 litre: Rs2,650

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Flour mills across Pakistan have begun a nationwide strike on Thursday, protesting the implementation of a 5% withholding tax imposed by the government.

The Pakistan Flour Mills Association (PFMA) Chairman Aamir Abdullah stated that the government imposed the “unjustified” withholding tax on flour mills starting July 1, 2024.

Abdullah further argued that flour mills are already part of the tax net and cannot bear the additional burden.

Prior to the strike, flour mills attempted to reach out to relevant government officials and authorities on July 3rd but received no response.

“We have initiated a nationwide strike for an indefinite period until our demands are met,” Abdullah declared.

He added that approximately 2,000 flour mills, including 250 in Sindh, have completely halted operations in protest of the withholding tax, leading to a nationwide disruption in the supply of flour and wheat products.

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Abdullah emphasized the unity of flour mills across Pakistan, stating that the government’s action has resulted in rising prices of essential commodities, particularly flour, which had become more affordable in recent years. The strike is expected to exacerbate the flour crisis in Karachi and other parts of the country.

“Yesterday, we stopped wheat cleaning, and today (Thursday), flour mills have stopped grinding wheat,” Abdullah concluded.

Prime Minister Shehbaz Sharif announced on Tuesday that the government will provide relief to people consuming less than 200 units of electricity for the next three months.

The PM made the announcement while addressing an event in Islamabad.

Media reports early in the day had suggested the government has proposed to withdraw the tariff increase for both protected and non-protected consumers using up to 200 units. Prime Minister Shehbaz Sharif has directed the cabinet to approve the proposal on an urgent basis.

The proposed relief, which would apply from July to September 2024, aims to alleviate the burden on low-income households. The federal government will allocate a subsidy of Rs50 billion to offset the tariff reduction.

This decision comes after the federal cabinet approved a significant increase in the base tariff for domestic electricity consumers last week, fulfilling a key condition imposed by the International Monetary Fund (IMF). The cabinet had approved a Rs7.12 increase per unit, leading to a corresponding rise in electricity bills for consumers.

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The cabinet had previously approved a base tariff increase of Rs48.84 per unit, which, after adding sales tax, would reach Rs57.63 per unit. The total tariff, including adjustments and taxes, was expected to exceed Rs65 per unit.

The cabinet had also approved a Rs3.95 increase per unit for protected consumers using 1 to 100 units, a Rs4.10 increase for protected consumers using 101 to 200 units, a Rs7.11 increase for non-protected consumers using 1 to 100 units, and a Rs7.12 increase for non-protected consumers using 101 to 200 units.

Economist Kaiser Bengali has warned that Pakistan would approach the International Monetary Fund for another bailout package after one year if the government does not reduce its expenses.

“They [government] say that we will have to again go before the IMF after three years if they kept on doing this [increasing expenses] then they will have to go to IMF after one year,” he said while appearing on Spotlight with Munizae Jahangir aired on Aaj News on Monday.

“The fundamental point is that the solution to fiscal crisis is not more taxes. It is more expenditure reduction.”

Several times, the government has called for taking measures to stop going to the Fund for a bailout package. Ministers have spoken about the austerity measures, but nothing concrete has so far being seen on reducing expenses.

He was responding to a question related to the incumbent government’s demand for taxing agriculture and property. PML-N Senator Afnanullah Khan and PTI Senator Humayun Mohmand were the other two guests on the show.

In his response, he said that the fiscal deficit would not be fixed by increasing taxes. “For this, we will have to reduce our expenses because the more you will increase tax, the economy will shrink,” Bengali said and added that the economy does not have the capacity to have electricity burden, further pay tax, and further buy expensive petrol.

“The economy does not have the capacity to have more taxes. The tax has to be lowered to boost the economy,” he said.

Bengali, who had joined the show via video link from Karachi, went on to add that the federal government was an “agent” in tax collection by provinces. He wondered how the government could blame provinces, which he described as “principle”.

According to the economist, the federal government was responsible for the circular debt, not the provinces. He explained that the tax base was necessary, saying: “If you have a large income base then your income tax will be high. If you have a large property base, your property tax will be high.”

While speaking about the agriculture sector, Bengali said that he was also of the view that agriculture should be further taxed but the data, available to him, showed that 80 per cent of farmers were small farmers who do not fall in the tax net. The rest are big landlords, which are in small numbers, he said.

“So the total number is very small. Even if you tax all of them fully, the total revenue will not be large. You will have tax, but the revenue will not be large because the number of taxpayers will not be large. The big landlords are not even 1,000,” he said.

Bengal, the former adviser to the Sindh chief minister on planning and development, said that the space for property tax was in Karachi, Lahore, Gujranwala, and Faisalabad.

“60 per cent of the properties in Karachi are katchi abadis from where you cannot generate property tax. 90% of properties in Hyderabad are so bad that the property tax cannot be generated,” he said and added that several people were hypothetically calling for taxing properties just because it was a big revenue source of revenue in the US.

“You impose a property tax on those which has a certain quality threshold. That’s the law.”

NFC award

Bengali, who was Sindh’s representative on the seventh National Finance Commission Award, stated that around 55% share of divisible pool was with federal government before seventh NFC Award and 45% was with the provinces.

The seventh NFC almost reversed it and 57.5% is with provinces and 42.5% is with federal government, he said.

“The point is that the reversal of resource share was a reason that the concurrent list was abolished and around 40 subjects in the lists returned to the provinces and it is no more with federal government. It was a view that when subjects will end with federal government, their expenses will decrease and provinces expenses will increase. This was the reason for reversing ratio to fixing.”

He was of the view that the problem was not the NFC, but the fact that the federal government cut did not its expenses. “It did not shut those ministries, divisions, departments, whose functions returned to the provinces. It’s been 14 years and still, it is consuming the federal government’s resources. This is the problem.”

PML-N Senator Afnanullah was of the view that the 18th Constitutional Amendment cannot be rolled back as the kind of support required for it would not be available. He added that the Federal Board of Revenue should tax agriculture and real estate.

PTI’s Mohmand said his party was also in favour of taxing the two above mentioned sectors when it was in power. He added that the ministries were increasing so was the burden of salaries.

Mohmad claimed that the land reforms were inconclusive and called for taxing the two sectors. “Our decisions about power, there are companies which not generated not a single unit and took Rs28 billion.”

‘70% to 80% of pensions is of non-civilians’

While agreeing with reducing expenses, PML-N leader Afnanullah said: “Pension has to be seen as 70% to 80% of it is of non-civilians. Work is under way and the service structure will change by next year.”

He expressed hope that it would create a fiscal gap. “We have to cut our expenses or else we will keep going to the IMF.”

PTI’s Mohmand stated that provinces should give their share in ending circular debt and take responsibility as electricity units were used in provinces.

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But Bengali disagreed with the opinion that provinces should pay for the circular debt.

“The reason for circular debt is capacity payments. The agreements were signed with power companies. We even pay for not producing electricity, so the electricity that was not produced and provinces did not use so how they should pay for it,” he said and added that there was no logic in asking provinces to pay for the electricity that was not even delivered to them.

When asked about the circular debt bill, he said: “This is 100% the federal government’s responsibility as it signed agreements. From 2001 to 2004, I was in the Social Policy Development Centre and these agreements were being signed at that time. We raised voices against these agreements and said these are disasters and don’t do this, but despite that they [government] deliberately did this.”

The economist stated that the cost-plus revenue, capacity payments, and dollarised payments were also a disaster.

Pakistan’s Finance Minister Muhammad Aurangzeb has stated that the country will continue seeking financial assistance packages from the International Monetary Fund (IMF) if it does not significantly increase its tax revenues.

This statement comes shortly after the Pakistani president signed the federal budget for the current fiscal year, which has been criticized by opposition groups, trade organizations, and even the government’s allies for setting ambitious tax collection targets.

The budget aims to raise Rs13 trillion ($46.6 billion) in tax revenues by July 2025, representing a roughly 40% increase from the current financial year, Business Recorder reported.

Financial experts believe this tax-heavy budget is designed to satisfy the IMF, which has repeatedly called for Pakistan to implement tax reforms to stabilize its fragile economy.

According to Finance Minister Muhammad Aurangzeb, speaking to the British newspaper Financial Times, he is “relatively confident” that Pakistan will reach a staff-level agreement with the IMF this month for a loan that the government has estimated to be between $6-$8 billion.

However, Aurangzeb cautioned that this would not be Pakistan’s last IMF program if the country did not significantly increase its tax revenues.

Pakistan hopes this IMF bailout package will help stabilize its struggling economy, which has been plagued by double-digit inflation, slow growth, and dwindling foreign exchange reserves - making it one of the worst-performing economies in Asia.

“The direction of travel is positive, and investors are showing confidence in the stock market,” Aurangzeb said.

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“People don’t want to deal with the tax authority because of corruption, because of harassment, because of people asking for speed money, facilitation money. That’s not sustainable,” Aurangzeb noted.

“We need to create the capacity to repay loans,” Aurangzeb said.

The finance minister lamented how Pakistan’s economy was reliant on imports, stating that Islamabad had to borrow to pay off existing or accumulating debt.

The federal government would look into the concerns of traders and industrialists over the budget, Finance Minister Muhammad Aurangzeb said on Saturday as he admitted that the industry was facing difficulties due to “tough decisions.”

“To get rid of the IMF, we will have to lead exports and bring in direct foreign investment. We will look at the budget with a broad perspective and address the concerns of both traders and industrialists,” he said while addressing the business community at the Federation of Pakistan Chambers of Commerce and Industry in Lahore.

Pakistan recently approved its tax-heavy Fiscal Year 2024-25 budget as several business experts reiterated that the government failed to tax sacred cows despite Finance Minister Muhammad Aurangzeb’s ambitions.

The government further increased taxes on the salaried class. For those earning between Rs600,000 to Rs1,200,000 per annum, the tax rate has been increased from 2.5%% to 5%.

Aurangzeb added that taxes would be imposed on all traders without exception and at all costs amid concerns by small traders and retailers.

He reiterated that the government has to increase the tax-to-GDP ratio to improve the economy. “It takes two to tango,” he said while justifying his decision to impose taxes on every sector.

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According to Aurangzeb, the government was making efforts to digitise the Federal Board of Revenue to minimise human intervention.

He admitted that cabinet members’ decision to not take salaries won’t make difference to the national exchequer. “If this has to be the last IMF programme, then we should have an export-led economy,” Aurangzeb said, “domestic investors are as important as foreign investors.”

A strike by petrol pump owners across Pakistan began on Friday after negotiations between the All Pakistan Petroleum Dealers Association and the government over a new tax failed to reach a resolution.

The All Pakistan Petroleum Dealers Association is protesting against the government’s implementation of a 0.5% advance turnover tax on petroleum products. The association argues that the tax will place a significant burden on their businesses and has demanded its withdrawal.

The government, however, has remained steadfast in its position, stating that the tax is necessary to generate revenue.

The deadlock in negotiations prompted the Association to call for a nationwide strike, with petrol pumps across the country closing their doors. While the strike was not observed in Islamabad due to the recent passing of the Association’s vice president in Punjab, the association has confirmed that all petrol pumps across the country will remain closed until further notice.

The strike has led to long queues at petrol stations across the country as motorists scrambled to fill their tanks before the pumps closed. The Association has warned that the strike could be extended if their demands are not met.

Despite the ongoing strike, the Petroleum Division and the Oil and Gas Regulatory Authority (OGRA) have assured the public that there is sufficient supply of petroleum products in the country. OGRA spokesperson Imran Ghaznavi stated that all oil marketing companies have been instructed to ensure adequate supply to petrol stations and keep them open.

However, some petrol pump owners in Lahore have expressed their opposition to the strike, advocating for a negotiated solution instead.

The situation remains tense, with the Association threatening to extend the strike if their demands are not met. The government has yet to respond to the association’s demands, leaving the future of the strike uncertain

Petroleum products will be available nationwide, says govt after dealers strike call

Strike postponed in Islamabad

The All Pakistan Petroleum Dealers Association (APPEDA) has postponed its strike in the twin cities of Islamabad and Rawalpindi following the passing of the association’s vice president, Qazi Khalid.

All petrol pumps in the twin cities will remain open. The strike will continue in other cities across Pakistan.

Karachi

Residents of Karachi are facing difficulties due to the ongoing strike by petrol pump owners protesting against the implementation of a double taxation policy.

Petrol pumps across the city began closing their doors last night in support of the strike. Many stations have been closed with banners and signs, while others remain open with long queues of vehicles waiting for fuel.

The Association had announced a nationwide strike on July 5th, with 13,000 petrol pumps closing their doors in protest against the government’s implementation of an advance turnover tax.

Speaking to the media last night, Association President Abdul Sami said that the association had repeatedly requested the government to withdraw the tax but their demands were ignored. He stated that no further negotiations would take place until the government revoked the tax and that all 14,000 dealers across the country would be shutting down their petrol pumps at 6 am today.

However, Association spokesperson Hassan Shah has refuted the strike call by some Karachi dealers, claiming that they are more concerned with the interests of oil marketing companies than their own community.

Peshawar

Petrol pumps in Peshawar are closed today in response to a strike call issued by the All Pakistan Petroleum Dealers Association.

Fuel supply has been suspended at pumps across the city, including those on Ring Road and GT Road. However, PSO pumps continue to provide fuel.

Pakistan’s Finance Minister, Muhammad Aurangzeb, has reiterated the government’s determination to impose taxes on agriculture and property, asserting that the current system cannot function without these sectors contributing to the tax net.

Speaking on the news program “Spotlight” today, Aurangzeb emphasized the need for provinces to participate in social protection initiatives and contribute to the national revenue pool.

He highlighted that 60% of the federal government’s collected revenue is allocated to the provinces.

Aurangzeb described the current budget as a roadmap for the future, stating that Pakistan cannot sustain a tax-to-GDP ratio of 9.5%. The government aims to increase this ratio to 13%.

He acknowledged public concerns regarding the category of non-filers, stating that it is a unique phenomenon in the world.

Aurangzeb reiterated his previous statement, emphasizing that the government has pushed prices to such a level that non-filers will be forced to reconsider their status. He expressed his intention to eliminate the term “non-filer” from the Pakistani lexicon in the coming years.

Responding to a question regarding the possibility of reduced electricity bills, Aurangzeb acknowledged that it would take time to see results. He highlighted the government’s plan to replace politically appointed individuals on the boards of distribution companies (DISCOs) with professionals from the private sector. He emphasized that the chairmanship of these boards should be entrusted to a private sector individual.

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Aurangzeb explained that the government had attempted to implement this change through a presidential ordinance but faced legal challenges. The bill is currently pending in the Senate and will subsequently be presented to the National Assembly. He acknowledged the time-consuming nature of the legislative process but expressed the government’s desire to have implemented these changes upon assuming office. He stated that nominations for these positions have been received and all preparations are complete.

Aurangzeb stressed the importance of these changes in paving the way for privatization of DISCOs. He also mentioned the government’s efforts to control the gross subsidy provided to industries.

Responding to a question about the digital economy, Aurangzeb emphasized its crucial role in Pakistan’s economic development. He highlighted that the government’s revenue target for the current fiscal year was Rs9.4 trillion, and although they have reached close to this target at Rs9.3 trillion, a significant amount of money, approximately Rs9 trillion, remains outside the formal financial system. He stressed the need for digitization to bring this money back into the economy.

Aurangzeb concluded by announcing that the Prime Minister will soon announce the launch of a digital initiative, with leadership entrusted to a private sector individual.

Pakistan is looking to clinch a staff level agreement on an International Monetary Fund bailout of more than $6 billion this month after addressing all of the lender’s requirements in its annual budget, its junior finance minister told Reuters.

The South Asian country has set challenging revenue targets in its annual budget to help it win approval from the IMF for a loan to stave off another economic meltdown, even as domestic anger rises at new taxation measures.

“We hope to culminate this (IMF) process in the next three to four weeks,” Minister of State for Finance, Revenue and Power Ali Pervaiz Malik said on Wednesday, with the aim of thrashing out a staff level agreement before the IMF board recess.

“I think it will be north of $6 billion,” he said of the size of the package, though he added at this point the IMF’s validation was primary focus.

The IMF did not respond immediately to a request for comment.

Pakistan has set a tax revenue target of 13 trillion rupees ($47 billion) for the fiscal year that began on July 1, a near-40% jump from the prior year, and a sharp drop in its fiscal deficit to 5.9% of gross domestic product from 7.4% the previous year.

Malik said the point of pushing out a tough and unpopular budget was to use it a stepping stone for an IMF programme, adding the lender was satisfied with the revenue measures taken, based on their talks.

“There are no major issues left to address, now that all major prior actions have been met, the budget being one of them,” Malik said.

While the budget may win approval from the IMF, it could fuel public anger, according to analysts.

“Obviously they (budget reforms) are burdensome for the local economy but the IMF program is all about stabilisation,” Malik said.

Sakib Sherani, an economist who heads private firm Macro Economic Insights, said a quick deal with the IMF was needed to avoid pressure on Pakistan’s foreign exchange reserves and the currency given the country’s maturing debt repayments and the effects of unwinding of capital and import controls that were applied earlier.

“If it takes longer, then the central bank may be forced to temporarily re-instate import and capital controls,” he said. “There will be a period of uncertainty, and one casualty is likely to be the rally in equities.”

Pakistan’s benchmark share index closed up 0.9% on Wednesday, reaching a record intraday high of 80,405 points before closing at 80,332 points.

The index has rallied roughly 10% since the budget was presented on June 12, helped by continued optimism on getting an IMF bailout package to bolster the struggling economy. Pakistan’s sovereign dollar bonds rallied, with the 2036 maturity gaining the most, rising by 1.19 cents to trade at 74.79 cents on the dollar by 1132 GMT.

New import tax have been introduced in Pakistan’s latest federal budget, and the prices of common lentils have risen between Rs40 and Rs50 per kg.

The most dramatic price hike has been observed in masoor dal (red lentils), which is now being sold at Rs520 per kilogram and has seen a jump of Rs40 rupees per kg.

Chana dal (chickpea lentils) has also seen a Rs40 increase and is now priced at Rs230 per kg.

Mong dal (mung bean) prices have risen by Rs40, now selling at Rs260 per kg, while large Kabuli chana (chickpeas) have become Rs10 more expensive, now priced at Rs320 per kg.

After the imposition of the withholding tax on packaged flour, the price of a 20 kg bag of flour is expected to reach Rs1,830, and an 80 kg bag of fine semolina is anticipated to reach Rs8,600.

The price of a 20 kg bag of flour may increase by Rs185, while the price of semolina and fine flour may rise by up to Rs800 per bag.

There are concerns that the imposition of withholding tax on the business of wheat dealers, wholesalers, and flour mills will lead to an increase in the prices of flour, semolina, and fine flour as well.

The Flour Mills Association has called for the withdrawal of the withholding tax.

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Jamaat-e-Islami in Karachi likely to stage protests on July 4 and 6 due to electricity disruption and ‘unjust’ fiscal year 2024-25 budget.

JI Karachi Chief Munem Zafar announced the protest at a seminar in Idara Noor-e-Haq, attended by many trade leaders.

According to Zafar, the protest will staged in Saddar this Thursday and and Liaquatabad on Saturday.

Zafar stated that the country is in deep social unrest due to poor economic policies, which have triggered historic levels of inflation. He warned that those suffering the most from the growing cost of living will resort to drastic actions.

Zafar criticized the government’s economic policies, as reflected in the new budget proposals, saying they have devastated traders, industrialists, exporters, and the salaried class alike.

He claimed the tax system widely favors the rich while squeezing the poor and middle class, with the government primarily focused on collecting taxes from salaried individuals, amounting to Rs360 billion, while only collecting Rs4 billion from large landowners.

The JI leader censured the coalition government for providing an Rs174 billion subsidy to K-Electric, which he referred to as the “murderer electric”, stating that the public’s daily life has been disrupted by higher fuel, water, and electricity costs.

He added that the government has ended subsidies of Rs3000 billion on essential items like flour, pulses, milk, and medicines, which will further exacerbate the economic problems of the poor.

Zafar also criticized the government for increasing the spending on the President’s House and Prime Minister’s House by 30% in the next fiscal year, allocating Rs17500 billion.

Karachi Tajir Ittehad Atiq Mir had expressed that IMF has dictated the country’s economic policies, indicating towards IMF who had ruined 70 other economies of different countries of the world and now has aimed to fail Pakistan’s economy.

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Former finance minister Miftah Ismail has said that everyone was a sacred cow in Pakistan and the country needed a “butcher”—a colloquial term for a daring person according to him.

“It’s every part of the budget that you cannot touch,” he said while appearing on Spotlight with Munizae Jahangir aired on Aaj News on Tuesday.

He was asked about any part of the budget that a finance minister cannot touch. Ismail served in the same capacity twice. His last stint was brief, but crucial when the country was on the brink of default and led the ministry for talks with the International Monetary Fund.

“You think the defence is not giving information, the railways [department] also does not. Everyone is a sacred cow. We need a butcher to slaughter them.”

Pakistan recently approved its tax-heavy Fiscal Year 2024-25 budget as several business experts reiterated that the government failed to tax sacred cows despite Finance Minister Muhammad Aurangzeb’s ambitions.

The government further increased taxes on the salaried class. For those earning between Rs600,000 to Rs1,200,000 per annum, the tax rate has been increased from 2.5%% to 5%.

According to Ismail, provinces do not collect taxes on agriculture and property as people belonging to such sectors were part of the provincial “chambers”.

When asked, he said the armed forces budget has increased from Rs1,500 billion in 2017-18 to over Rs2,000 billion in the current fiscal year.

Ismail, along with Abbasi, is set to launch Awaam Pakistan party on July 5. The two leaders parted ways with the PML-N after the change of narrative and economic plans.

They and former PPP senator Mustafa Nawaz Khokhar had conducted seminars under ‘Reimagining Pakistan’ in the recent past. But Khokhar is not part of the party.

When asked, he said that the former senator was of the view that the party should be launched before elections. But Ismail said people were speaking about former prime minister Imran Khan in constituencies.

“Now, Mustafa thinks space is there but time is not right as many things are happening in politics, judiciary and a clash-like situation of institutions is seen,” the former PML-N leader said.

Goals of Awaam Pakistan

Firstly, he said that the party wants to give the opportunity to every Pakistani, irrespective of their gender, caste, and religion, to lead by giving them education, health, basic income and a job after graduation.

Secondly, Ismail added that the party wants to empower depressed youngsters and free them from the controlling mechanism in the country.

‘Every MPA in Punjab has been given Rs1b’

Ismail, who has slammed the annual outlay, said that the federal government has allocated Rs75 billion for MNAs projects and more than Rs500 billion has been allocated by provinces. “In Punjab, every MPA has been given Rs1 billion for their areas project.”

He was of the view that the prime minister’s decision to not take salary was a penny. “The PM must take a salary, but take right decisions and decrease the Rs500 billion allocated for the PSDP as it is serious money,” the former finance minister said.

Ismail went on to add that Rs30,000, which is the government’s expenditure was equal to 25 per cent of the national income.

Pensions breakdown

He revealed that more than Rs600 billion was allocated for defence institutions’ retired employees – out of the total Rs1,0109 billion budget.

Ismail stressed the need for reforms in pensions. “There should not be two pensions and it should not be more than the salary,” he said and warned that the government would not be able to pay pensions if the amount continues to increase after eight years.

He lamented that the government did not show any intention to do it despite making the statement.

7E and 236 C

While responding to State Finance Minister Ali Pervaiz’s comments on the withholding tax, he clarified that the 7E (tax on deemed income) law was introduced when Shehbaz Sharif was the prime minister during the PDM’s rule.

Ismail added that it was the 236C (advance tax on sale or transfer of immovable property) law, not the 7E. “It is nowhere written that these are those plots,” he said.

Finance minister’s domain

When asked whether the finance minister was being given room to implement his economic vision, he said: “Absolutely not because I think Aurangzeb cannot be blamed for the mistakes done in the budget.”

He reiterated that there was no need to spend so much on the PSPD. Ismail claimed that if the suggestions of Aurangzeb or the finance ministry were heard then the National Finance Commission award could have been revisited and provinces fund would have been decreased.

Ismail added that the provinces can still cut 10 per cent of their expenses.

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Deal with IMF

He claimed that the government did not comply with the IMF’s suggestions of revisiting the NFC award and taxing the property and agriculture sectors.

According to Ismail, the government has given nothing to the erstwhile Federally Administered Tribal Areas (Fata) and only given sales tax and customs duty relief to some companies

“The tax on salaried class was enough. When did IMF ask you to tax salaried class,” he said and accused the government of blaming the IMF for imposing further taxes.

“I think this budget will not last the whole year as there are anomalies in it. They will have to relook it,” he said.

Economic expert Khaqan Najeeb, who joined the show via video link, said that the approach to the budget was wrong as the government did not control its expenditure and brought any reforms.

The Federal Board of Revenue (FBR) has announced a significant increase in customs duties on a wide range of imported goods, effective July 1, 2024. This move aims to generate additional revenue for the government and potentially curb the import of luxury and non-essential items.

The most notable change is the imposition of a 2% additional customs duty (ACD) on over 2,200 items, including components for the assembly of vehicles, tractors, and other machinery.

This ACD applies to goods previously subject to zero percent duty. Additionally, the FBR has levied regulatory duties (RD) ranging from 5% to 55% on 657 luxury and non-essential items.

Among the items facing increased duties are:

• Cars, Jeeps, Light Commercial Vehicles (CKD) exceeding 1,000cc: 7% ACD
• Heavy Commercial Vehicles (CKD): 7% ACD
• Perfumes and Sprays: 20% RD
• Watches: 30% RD
• Sunglasses: 30% RD
• Imported Cycles: 10% RD
• Dairy Products: 20-25% RD
• Natural Honey: 30% RD
• Dates and Other Fruits: 25% RD
• Cosmetics: 55% RD
• Shaving Cream and Soap: 50% RD
• Gents and Ladies Apparel: 10% RD
• Imported Jewelry: 45% RD
• Oral Hygiene Products: 50% RD
• Cheese and Curd: 25% RD
• Potatoes and Other Vegetables: 50-55% RD
• Sugar Confectionery: 40% RD
• Tobacco: 50% RD
• Pet Food: 50% RD
• Leather Apparel and Accessories: 50% RD
• Video Game Consoles and Machines: 50% RD

The FBR has clarified that certain imports will be exempt from these new duties, including Imports under specific notifications: SRO.678, Chapter 99 of the First Schedule of the Customs Act, Temporary Importation Scheme, Fifth Schedule to the Customs Act, and others.

Also exempted are specific items such as special steel round bars and rods, rubber aprons and cots, vehicles (CBU) by new entrants, input materials for auto parts manufacturing, and electric vehicles (2-3 wheelers) till June 30, 2025.

The FBR’s move is expected to have a significant impact on the import sector and consumer prices. The government hopes that these measures will help to improve the country’s trade balance and reduce reliance on foreign imports.

However, the increased duties are likely burden consumers and businesses, potentially hindering economic growth.

The Sindh government has increased the sales tax on services by 2%, which took effect today.

The Sindh Sales Tax (SST) rate has been raised from 13% to 15%, applicable to hotels, farm houses, restaurants, caterers, and wedding halls.

With the start of the new financial year, petrol prices have increased as well.

Additionally, the SST has also been increased for guest houses, farm houses, and clubs.

The Sindh government has increased the rate of services GST from 13% to 15% in the new financial year 2024-25 and has also expanded the scope of GST on services to several new sectors.

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The Sindh government has levied taxes on air tickets, both domestic and international.

The federal government would provide relief to the salaried class at the first opportunity it gets, Finance Minister Muhammad Aurangzeb has said.

“I understand the pain and empathise with what people are saying. As far as I am concerned, the first opportunity that we get we will hopefully take it to relief,” he said while appearing on News Insight with Amir Zia aired on Aaj News on Monday.

“It will happen over a period of time. We will decrease it over a while gradually at the very first opportunity we get.”

Aurangzeb, the former Habib Bank Limited chief executive officer, admitted that there were concerns by the salaried and revealed that he was one of the highest taxpayers when he belonged to the same class.

Several economic experts criticised the federal government for imposing further taxes on the salaried class in the budget that was one of the largest income tax contributors in the country.

They added that the budget was not different from the past and lamented that the government did not tax other sectors.

Aurangzeb, who appeared on the show via video link from Islamabad, claimed that the government was working hard to bring retailers into the tax net. He added that the new punitive actions would lead non-filers to think “three, four or five times about why they are not part of the net.”

The government hopes to achieve a staff-level agreement with the International Monetary Fund in July, he said and added that the size of the programme was under consideration.

According to media reports, Pakistan was seeking $6 to $8 billion from the Fund under the Extended Fund Facility for a three-year programme.

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The minister admitted that Pakistan only has enough dollars to last a few months leading to the country running back to the IMF again and again. He said that an extended program with the IMF would be a stamp of approval for the economy’s stability.

According to Aurangzeb, there was a positive progress on both sides related to the loan programme. He reiterated that the country needed reforms in the energy sector and the state owned enterprises to stop economic losses.

If the country did not take necessary measures then it would continue to seeking the IMF programme, he added.

But he admitted that structural reforms were a difficult task. “These are very unpopular decisions,” he said and added that the government removed political appointees and brought in private sector people to improve governance.

“I see it as we have to be very clear about the road to market. There can be a discussion on export-led growth, foreign direct investment, access to international capital markets,” he said.

The finance minister said that the tax expansion was under discussion and traders and builders were the two sectors that have to be brought into the tax net. More than 40,000 people have registered with the Federal Board of Revenue, he said.

“On the industry side, for the first time we have asked exporters to end the presumptive regime and this is not a tax on export but on income. If there is a loss then there is no tax. Just to make sure, we have to discuss that it was a real concern and right complaint from our exporting community that you take our refunds,” he said, “we are returning the determining sale refunds and we will clear all these in two days till the end of June because it takes two to tango. We also have to deliver.”

He added that he Public Sector Development Programme was revised and 81% of the funds were allocated for the ongoing projects while the remaining funds were allocated for the new projects.

Aurangzeb revealed that Rs1 trillion was the per annum cost of pensions in terms of unfunded liability. He added that after every two months, the government would update the people about its austerity measures under which some ministries would be closed, merged or devolved.

He shunned the impression that it was a mini-budget and that agriculture and information technology were the two sectors that had to be boosted.

The minister expressed hope that the currency would be stable and have macroeconomic stability after the EFF

He was of the view that the real interest has to be kept in a “positive regime,” as enough cushion was available to bring it further down.

When asked, he said that it was a huge privilege for him to serve the country as a finance minister. “It’s easy to give advice from the outside, so I said let’s now go and try to help execute what has been out there for the longest time.”

The Federal Board of Revenue (FBR) has announced a significant achievement, exceeding its revenue collection target for the fiscal year 2023-24 by a remarkable margin. The FBR collected a total of Rs 9,306 billion, surpassing the target of Rs 9,252 billion by Rs 54 billion.

This impressive performance represents a 30% increase compared to the previous year’s collection.

The FBR attributes this success to a record-breaking collection throughout the fiscal year, with an increase of Rs 2,142 billion compared to the previous year’s collection of Rs 7,164 billion. The month of June 2024 alone saw a collection of Rs 1,183 billion.

This achievement is particularly noteworthy considering the reduction in imports from $55 billion to $53 billion during the fiscal year. The FBR managed to compensate for the shortfall in import taxes by focusing on domestic revenue collection.

The FBR’s success is attributed to a strategic shift in policy, emphasizing domestic resource mobilization, increased direct taxation from the wealthy, and facilitating businesses and exporters through prompt refund issuance. This policy shift has been driven by the directives of the Prime Minister and Finance Minister, who have prioritized revenue generation.

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Direct taxes contributed 47% to the total revenue collection, demonstrating the government’s commitment to taxing the affluent.

Meanwhile, domestic taxes saw a 37% increase, reaching Rs 6,128 billion, while import taxes grew by 18% to Rs 3,178 billion despite the reduction in imports.

The FBR disbursed Rs 469 billion in refunds during the fiscal year, a 42% increase compared to the previous year, reflecting the government’s commitment to supporting businesses.

The FBR is confident in its ability to meet the revenue collection target for the upcoming fiscal year 2024-25. The organization is committed to overcoming challenges and achieving further success, recognizing the crucial role of revenue collection in Pakistan’s economic growth.