Pakistan unveils five-year tariff reform plan, warns of additional taxes if compliance measures blocked​​

Special Pakistan unveils five-year tariff reform plan, warns of additional taxes if compliance measures blocked​​
Pakistan’s Finance Minister Muhammad Aurangzeb, along with Chairman of the Federal Board of Revenue (FBR) Rashid Mahmood Langrial and Secretary of Finance Imdad Ullah Bosal, addresses a post-budget press briefing in Islamabad, Pakistan June 11, 2025. (REUTERS)
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Updated 12 June 2025
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Pakistan unveils five-year tariff reform plan, warns of additional taxes if compliance measures blocked​​

Pakistan unveils five-year tariff reform plan, warns of additional taxes if compliance measures blocked​​
  • Pakistan plans to cut overall tariff regime by more than 4% to shift the country towards an export-led growth model
  • Government has removed additional customs duties on 4,000 tariff lines, reduced them on another 2,700, out of total 7,000

KARACHI: Pakistan plans to cut its overall tariff regime by more than 4% over the next five years, part of sweeping reforms aimed at boosting exports and shifting the country towards an export-led growth model, Finance Minister Muhammad Aurangzeb said on Wednesday.

At a post-budget press conference in Islamabad, Aurangzeb outlined details of the proposed tariff rationalization, saying the government had already removed additional customs duties on 4,000 tariff lines and reduced them on another 2,700, out of a total 7,000.

The reforms align with Pakistan’s commitments under a $7 billion IMF program approved last year and signal a shift toward an export‑oriented growth model built on a leaner tariff structure, protection of social welfare, and improved tax collection.

“First, the goal is to change the overall protected regime. When you lower protection and dismantle walls around it, you improve the economy’s resource allocation, better capital allocation, better human resource allocation, so that’s the overall macroeconomic framework," Aurangzeb said, adding that the changes would reduce input costs for exporters and improve competitiveness.

The reforms are part of the National Tariff Policy 2025–30 under which the government plans to abolish additional customs duties, regulatory duties, and the fifth schedule of the Customs Act, 1969. The policy envisions a streamlined customs structure with just four duty slabs ranging from 0 to 15%, which would become the maximum rate.

“According to the World Bank, after the successful implementation of these reforms, Pakistan’s average tariff will decline to the lowest level in the region,” Aurangzeb had said during his full-year budget speech on Tuesday, when he presented the Rs17.6 trillion ($62 billion) federal budget for FY2025–26.




Pakistan’s Finance Minister Muhammad Aurangzeb speaks during a media briefing in Islamabad on June 11, 2025, a day after presenting the 2025–26 fiscal budget. (AFP)

Describing the initiative as Pakistan’s “East Asia moment” during the post-budget speech, the minister said the plan was designed to help the country avoid recurring balance-of-payments crises.

“So that when we go toward growth we don’t get into the dollar situation, we don’t get into a balance of payment problem,” he said. “So that we can continue to grow at a certain pace which is export-led.”

Aurangzeb emphasized that the tariff cuts would be phased in gradually, starting this year.

“This I am talking about year one. We will take it towards a more than 4 percent reduction in the overall tariff regime in Pakistan,” he said.




Vehicles move past a shipping container yard along a road in Karachi, Pakistan, on June 10, 2025. (REUTERS)

The government is aiming to lift exports, which grew more than 6% year-on-year to $26.9 billion during July-April, against imports of $48.3 billion, up 8% in the same period.

ENFORCEMENT, ADDITIONAL TAXES

Aurangzeb also warned that the government could be forced to impose Rs400–500 billion ($1.4-1.75 billion) in additional taxes if the Pakistani parliament failed to pass enabling legislation needed to implement enforcement provisions tied to Rs312 billion ($1.1 billion) in proposed new tax measures for the coming fiscal year.

“The parliament should help us in enabling amendments so we don’t opt for additional measures to stop the leakages in the system,” he said.

The minister noted that enforcement actions in the current fiscal year had already yielded Rs400 billion ($1.4 billion) in additional revenue. Without legislative support, the government may be compelled to introduce further taxation to close gaps.




Corporate employees watching television screens as Pakistan Finance Minister Muhammad Aurangzeb presents Pakistan’s $62 billion federal budget for fiscal year 2025–26, in Islamabad on June 10, 2025. (APP)

Without naming them directly, Aurangzeb said international financial institutions had signed off on Rs389 billion ($1.36 billion) in additional taxes for FY26 as part of budget negotiations.

“We now have the credibility and trust internally and externally that we can do the enforcement,” he said.

BUDGET NUMBERS “LOCKED” WITH IMF

Flanking the finance minister, Finance Secretary Imdadullah Bosal said the government had “locked” all key budget numbers with the IMF. The $7 billion loan program the lender approved for Pakistan in 2024 comes with a strict reforms agenda on fiscal consolidation, debt rationalization, revenue mobilization, among other issues.

The IMF, in a recent statement, confirmed Pakistan had committed to continued fiscal consolidation while safeguarding social and priority spending in the new budget.




This handout photograph taken on June 10, 2025, and released by Pakistan's National Assembly shows Finance Minister Muhammad Aurangzeb presenting the 2025–26 fiscal budget at the Parliament House in Islamabad. (AFP)

Bosal said the government had managed to reduce current expenditures to under 2% growth in FY25 from 26% in FY24.

“This is our response back to those people who are paying taxes in this country,” Aurangzeb said, adding that the budget had attempted to extend relief to pensioners, salaried individuals, and businesses, despite fiscal constraints.

“The federal government, whatever it is giving, is from the loans that we are taking because we start [the new year] with a deficit.”


Pakistan eyes Google collaboration for community-driven innovation and AI adoption

Pakistan eyes Google collaboration for community-driven innovation and AI adoption
Updated 38 sec ago
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Pakistan eyes Google collaboration for community-driven innovation and AI adoption

Pakistan eyes Google collaboration for community-driven innovation and AI adoption
  • Pakistan is currently focused on AI training in the fields of education, workforce development and industrial innovation
  • Minister says enhanced collaboration will accelerate Pakistan’s integration into the global AI ecosystem, digital empowerment

ISLAMABAD: Pakistan and American multinational corporation and technology giant Google are seeking to collaborate with each other in community-driven innovation and the adoption of artificial intelligence (AI) in the South Asian country, according to the Pakistani IT ministry.

The statement came after IT Minister Shaza Fatima Khawaja’s meeting with Google’s Regional AI Developer Ecosystem and Communities team to explore strategic collaboration in advancing Pakistan’s AI landscape.

The Google team provided an overview of their developer ecosystem, contributions of Google Developer Groups (GDGs), community-based AI initiatives, and impactful platforms like Taleemabad.

In the wider policy discussion, Khawaja emphasized the government’s focus on AI training across three critical domains: mainstream education, workforce development including freelancers, and industrial innovation.

“She stressed the need for inclusive access to tools such as the AI Seekho program, sandbox environments, and cloud credits,” the IT ministry said. 

“She called for enhanced collaboration between Google and the Ministry of IT & Telecommunication (MoITT) to accelerate Pakistan’s integration into the global AI ecosystem and promote equitable digital empowerment.”

During the meeting, Khawaja also had an interactive session with the N+1 team, a group of young Pakistani developers recently selected among the global top 10 in the Google Solution Challenge. The team proudly represented Pakistan at the regional showcase in the Philippines.

Khawaja praised their achievement and called it a testament to the country’s emerging talent pool and the importance of nurturing such success stories through structured support and mentorship, according to the IT ministry.

On Friday, Google said it has expanded access to its advanced video generation model, Veo 3, allowing users in Pakistan and over 150 other countries to create eight-second videos from photos with sound.

The move comes amid a global surge in interest in creative AI tools, with content creators using different platforms to generate video stories and bring still images to life. With Pakistan’s growing pool of digital creators, the rollout is expected to spur local innovation in short-form content.


Pakistan, Bahrain vow to boost security cooperation

Pakistan, Bahrain vow to boost security cooperation
Updated 12 July 2025
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Pakistan, Bahrain vow to boost security cooperation

Pakistan, Bahrain vow to boost security cooperation
  • Officials of the two countries held discussions in Manama on counter-terrorism, human trafficking and anti-narcotics
  • Pakistani interior minister calls enhancing cooperation in counter-narcotics, anti-human trafficking ‘need of the hour’

ISLAMABAD: Pakistan and Bahrain have resolved to further strengthen their security collaboration in various fields, Pakistani state media reported on Saturday.

The consensus was reached during a meeting between Pakistan’s Interior Minister Mohsin Naqvi and his Bahraini counterpart, General Sheikh Rashid bin Abdullah Al-Khalifa, in Manama.

The two sides held discussions on bilateral cooperation in counter-terrorism, combating human trafficking and anti-narcotics efforts as well as to make Pakistan-Bahrain Joint Security Committee more effective.

“Enhancing cooperation in counter-narcotics and anti-human trafficking efforts is the need of the hour,” Naqvi was quoted as saying by the Radio Pakistan broadcaster.

The Bahraini interior minister said his country valued Pakistan’s cooperation in security and other fields.

Bahrain is one of the important countries in the Gulf Cooperation Council (GCC), and a favorite destination for the Pakistani workforce since the early 1970s, according to the Pakistani foreign ministry.

Both countries have a Joint Ministerial Commission (JMC) at the level of the foreign ministers and a trade volume that has ranged between $500 million and $1 billion in recent years.


Pakistan plans to launch transshipment operations between Gwadar and Gulf region

Pakistan plans to launch transshipment operations between Gwadar and Gulf region
Updated 12 July 2025
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Pakistan plans to launch transshipment operations between Gwadar and Gulf region

Pakistan plans to launch transshipment operations between Gwadar and Gulf region
  • The country has been looking to capitalize on its geostrategic location to boost transit trade and foreign investment
  • Islamabad also seeks to cut container dwell time at ports by up to 70 percent to improve trade competitiveness, ease congestion

ISLAMABAD: The Pakistani government is actively engaging private shipping liners to commence transshipment operations between Gwadar and the Gulf region, Pakistani state media reported on Friday. 

The statement came from officials at a high-level meeting of the Cabinet Committee on Gwadar Port operationalization, which was presided over by Planning Minister Ahsan Iqbal.

Maritime officials informed the participants that initial cargo categories will include minerals, dates, seafood, and cement, targeting sectors such as mining, fisheries, and processing industries.

Iqbal said Gwadar’s geostrategic position as the shortest trade route to the Gulf and Central Asia highlighted the port’s potential as a regional transshipment hub, the Radio Pakistan broadcaster reported.

“Iqbal emphasized the need to showcase Gwadar Port in international road-shows as a strategic trade hub linking the Gulf and Central Asia,” the report read. “He directed stakeholders to promote the port’s cost-effective trade routes and available incentives for international businesses.”

Gwadar, situated along the Arabian Sea, lies at the heart of the China-Pakistan Economic Corridor (CPEC), under which Beijing has funneled tens of billions of dollars into massive transport, energy and infrastructure projects in Pakistan.

Pakistan, slowly recovering from a macroeconomic crisis under a $7 billion International Monetary Fund (IMF) deal, has been looking to capitalize on its geostrategic location to boost transit trade and foreign investment for a sustainable economic recovery.

The country plans to cut container dwell time at its seaports by up to 70 percent to improve trade competitiveness and ease congestion, while it last month reduced port charges for exporters by 50 percent at the country’s second biggest Port Qasim.


Three million Afghans likely to return this year after Pakistan, Iran introduce new policies

Three million Afghans likely to return this year after Pakistan, Iran introduce new policies
Updated 12 July 2025
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Three million Afghans likely to return this year after Pakistan, Iran introduce new policies

Three million Afghans likely to return this year after Pakistan, Iran introduce new policies
  • Over 1.6 million Afghans have already returned from Pakistan and Iran this year
  • The figure already exceeds the UNHCR’s initial forecasts of 1.4 million for 2025

UNITED NATIONS: Three million Afghans could return to their country this year, a UN refugee official said Friday, warning that the repatriation flow is placing intense pressure on an already major humanitarian crisis.

Iran and Pakistan have introduced new policies affecting displaced Afghans, with Tehran already having given four million “illegal” Afghans until July 6 to leave Iranian territory.

“What we are seeing is the undignified, disorganized and massive exodus of Afghans from both countries, which is generating enormous pressures on the homeland that is willing to receive them and yet utterly unprepared to do so,” the

UNHCR representative in Afghanistan, Arafat Jamal, said during a video press conference from Kabul.

“Of concern to us is this scale, the intensity and the manner in which returns are occurring.”

Over 1.6 million Afghans have already returned from Pakistan and Iran this year, the large majority from Iran, Jamal added. The figure already exceeds the UNHCR’s initial forecasts of 1.4 million for 2025.

The office of the United Nations High Commissioner for Refugees now estimates three million coming into Afghanistan this year, Jamal said.

The UN agency said over 30,000 people per day have streamed across the Islam Qala border into Afghanistan, with 50,000 crossing on July 4 alone.

“Many of these returnees are arriving having been abruptly uprooted and having undergone an arduous, exhausting and degrading journey. They arrive tired, disoriented, brutalized and often in despair,” Jamal said.

The United Nations has taken emergency measures to reinforce water and sanitation systems intended to serve 7,000 to 10,000 people per day, as well as vaccinations and nutrition services.

Many who have crossed the border have reported pressure from Iranian authorities, including arrests and expulsions.


Pakistan issues flood warning for multiple provinces till July 17

Pakistan issues flood warning for multiple provinces till July 17
Updated 12 July 2025
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Pakistan issues flood warning for multiple provinces till July 17

Pakistan issues flood warning for multiple provinces till July 17
  • The development came after nationwide death toll from rains, floods rose to 90 since late June
  • Relief efforts continue in several areas, with tents, ration and blankets distributed among affectees

ISLAMABAD: Pakistan’s National Disaster Management Authority (NDMA) has issued a fresh alert and warned of potential flood and flash flood risks in various regions of Punjab, Khyber Pakhtunkhwa (KP) and Balochistan provinces from July 12 till July 17, with at least 90 people killed in rain-related incidents since late June.

In Punjab, widespread rainfall is expected across districts including Jhelum, Chakwal, Talagang, Mandi Bahauddin, Sargodha, Hafizabad, Gujranwala, Gujrat, Sialkot, Faisalabad, Lahore, Narowal, DG Khan, Rajanpur and Rahim Yar Khan.

This weather activity may result in medium to high flows in torrents of DG Khan and Rajanpur, while nullahs originating from the Pir Panjal range in northeastern Punjab may experience a significant rise in water levels.

Rainfall is expected in KP’s Dir, Swat, Besham, Abbottabad, Mansehra, Haripur, Karak, Kohat, Kohistan, Nowshera, Peshawar, Mardan, Malakand, Charsadda, Bannu, Buner, Swabi, and Waziristan. This may lead to increased flows in the

Kabul River and its tributaries, including Swat, Panjkora, and Kalpani nullahs. River Swat and Panjkora, along with their associated streams, may swell due to rainfall in their catchments. River Kabul at Nowshera is expected to reach low flood levels.

In Balochistan, an active weather system is likely to trigger isolated rains and thunderstorms from July 13 till July 17 in Ziarat, Quetta, Mastung, Kalat, Surab, Zhob, Barkhan, Musakhel, Loralai, Awaran, Khuzdar, Dera Bugti and surrounding areas, with a possibility of flash flooding in local streams and nullahs, particularly in the torrents originating from the Kirthar Range, according to the NDMA.

“Authorities are advised to ensure the readiness of emergency teams, availability of machinery, and clearance of drainage systems. Tourists should avoid high-altitude areas, while residents in vulnerable zones must secure valuables, vehicles, and livestock, and keep essential supplies,” the NDMA said in its alert issued late Friday.

“District administrations, especially in northeastern and central Punjab, should deploy dewatering equipment to manage urban flooding. Citizens are urged to avoid flooded roads, low bridges, and causeways.”

The death toll from monsoon downpours in Pakistan rose to 90 on Friday after three children died in rain-related incidents in the eastern Punjab province, according to the NDMA.

Punjab has reported 32 deaths, followed by Khyber Pakhtunkhwa with 30 deaths, Sindh with 16 deaths, Balochistan with 11 fatalities and one man lost his life in Azad Jammu and Kashmir.

Meanwhile, relief operations continue in affected areas, with authorities distributing tents, ration bags, blankets, sandbags, quilts, gas cylinders, mattresses, kitchen sets, mosquito nets, plastic mats, hygiene kits and food packets to affected families. Pakistan has also rolled out a location-based SMS alert system to warn citizens living in flood-prone areas about imminent weather threats.

Pakistan, home to over 240 million people, is consistently ranked among the countries most vulnerable to climate change. In 2022, record-breaking monsoon rains and glacier melt triggered catastrophic floods that affected 33 million people and killed more than 1,700.