Pakistan’s top revenue-generating Sindh province unveils $12.4 billion budget with major tax cuts

Pakistan’s top revenue-generating Sindh province unveils $12.4 billion budget with major tax cuts
A man watches a live broadcast of Sindh Chief Minister Murad Ali Shah delivering the provincial budget speech in Karachi on June 13, 2025. (APP)
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Updated 14 June 2025
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Pakistan’s top revenue-generating Sindh province unveils $12.4 billion budget with major tax cuts

Pakistan’s top revenue-generating Sindh province unveils $12.4 billion budget with major tax cuts
  • Sindh, home to commercial hub Karachi, wants to abolish five taxes to ease pressure on individuals, businesses
  • Khyber Pakhtunkhwa, governed by jailed ex-PM Khan’s PTI, presents $7.63 billion budget for FY2025-26

KARACHI: Pakistan’s southern Sindh province on Friday proposed abolishing five taxes as it presented a Rs3.45 trillion ($12.41 billion) new budget for fiscal year 2025-26 to simplify taxation and alleviate financial pressure on people and small businesses.

Friday also saw Pakistan’s northwestern Khyber Pakhtunkhwa (KP) province announcing a surplus budget of Rs2,119 billion ($7.63 billion) for next year, without proposing any new taxes. The province allocated significant financial resources for the militancy-hit tribal districts and social welfare programs, according to the budget document.

SINDH

Sindh’s budget, which carries a deficit of Rs38.46 billion ($138.35 million), includes plans to eliminate professional tax, cotton fee and entertainment duty among other levies as part of broader reforms to support salaried individuals, small businesses, and cultural industries.

“I would like to share some important changes being planned to make our tax system simpler and to reduce the financial burden on both individuals and businesses,” Chief Minister Murad Ali Shah said while presenting the budget in the provincial assembly.

Sindh generates most of Pakistan’s revenues, more than 60 percent, and is the second most populous province ruled by Pakistan People’s Party of President Asif Ali Zardari, a coalition partner of Pakistan Muslim League-Nawaz party which leads the federal government.

Pakistan remains under a $7 billion International Monetary Fund (IMF) loan program approved last year and the Washington-based lender wants Islamabad to broaden its tax base by taxing incomes from agriculture, retail and real estate sectors at the provincial level.

The two provinces announced their new fiscal plans days after Pakistan’s federal government announced its FY26 budget targeting 4.2 percent economic growth, while aiming to arrest fiscal deficit at 3.9 percent of the GDP.

In Sindh, the province’s total revenue receipts are projected at Rs3.41 trillion ($12.27 billion) for FY2025-26, up 11.6 percent from the current fiscal year ending June. Transfers from the federal divisible pool, which account for 75 percent of revenue, are expected to rise 10.2 percent to Rs1.93 trillion ($6.94 billion). With additional grants and straight transfers, total federal receipts are estimated at Rs2.10 trillion ($7.55 billion).

Current Revenue Expenditure (CRE) has been set at Rs2.15 trillion ($7.73 billion), a 12.4 percent increase from the prior year, driven by higher salaries, pensions, and grants to non-financial institutions.

Allocations for key sectors have seen marked increases. The education budget has risen to Rs523.73 billion ($1.88 billion) – a 12.4 percent hike – with major investments in primary and secondary education. New initiatives include hiring 4,400 staff, opening four community colleges, and funding for 34,100 primary schools through cost centers.

The health sector will receive Rs326.5 billion ($1.17 billion), up 8 percent, including Rs19 billion ($68.35 million) for the Sindh Institute of Urology & Transplantation (SIUT) and Rs10 billion ($35.97 million) for a new hospital in Larkana.

Enhanced ambulance and mobile diagnostic services are also planned.

Grants-in-aid total Rs702 billion ($2.53 billion), reflecting allocations for hospitals, universities, and development bodies. A Rs520 billion ($1.87 billion) Annual Development Program (ADP) focuses on 475 new schemes targeting flood recovery, renewable energy, and underserved regions.

Karachi, the provincial capital of Sindh, will see major upgrades in transport and infrastructure. Fifty electric buses will launch this year, with 100 more expected by August. Bus Rapid Transit (BRT) Yellow Line is nearing completion, and the Red Line has passed the halfway mark.

The Karachi Safe City initiative will expand CCTV coverage using artificial intelligence, while blockchain-based land records, a KPI monitoring dashboard, and digital birth registration aim to enhance governance.

In rural areas, Rs20 billion ($71.95 million) has been allocated for pro-poor initiatives, while the new Benazir Hari Card will support 200,000 farmers. The Sindh Cooperative Bank is being explored to provide interest-free loans to progressive farmers.

KHYBER PAKHTUNKHWA

Presenting the new budget, Khyber Pakhtunkhwa’s Finance Minister Aftab Alam said the province achieved a Rs100 billion ($359.71 million) surplus in the outgoing fiscal year despite receiving Rs90 billion ($323.74 million) less in funds from the federal government.

The province is ruled by jailed former Prime Minister Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party, which is in opposition at the federal level.

“Against all odds and skepticism, we not only met our budget targets but also ensured timely debt repayments of Rs49 billion [$176.26 million],” Alam said.

He added that KP’s own non-tax revenues rose by 74 percent this year, while the KP Revenue Authority collected Rs41.37 billion ($148.79 million) in the first 10 months of the outgoing fiscal year.

The province has set a tax revenue target of Rs83.5 billion ($300 million) and a non-tax revenue target of Rs45.5 billion ($163.71 million) for the next fiscal year, aiming to widen the tax net rather than impose new levies.

Federal transfers, including Rs1,147.91 billion ($4.13 billion) from tax revenues and Rs58.15 billion ($209.17 million) in oil windfall levy, are expected to form the bulk of receipts.

The tribal districts are set to receive Rs292.34 billion ($1.05 billion), including Rs50 billion ($179.85 million) under an accelerated implementation program and Rs39 billion ($140.28 million) for development.

Key initiatives include the expansion of the Sehat Card Plus with life insurance coverage, recruitment of 16,000 teachers, and establishment of new degree colleges.

The province’s police force will receive Rs693.7 million ($2.49 million) for modern arms and Rs1.22 billion ($4.39 million) for vehicles.
 


Pakistan’s performance under $7 billion program has been ‘strong so far,’ IMF representative says

Pakistan’s performance under $7 billion program has been ‘strong so far,’ IMF representative says
Updated 13 July 2025
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Pakistan’s performance under $7 billion program has been ‘strong so far,’ IMF representative says

Pakistan’s performance under $7 billion program has been ‘strong so far,’ IMF representative says
  • Pakistan is currently navigating a long path to economic recovery under the 37-month IMF program secured in Sept.
  • Reforms to strengthen tax equity, improve business climate are key to economic sustainability, Mahir Binici says

ISLAMABAD: Mahir Binici, the International Monetary Fund (IMF) country representative for Pakistan, has described Islamabad’s performance under a $7 billion IMF loan program as being “strong so far,” the Islamabad-based Sustainable Development Policy Institute (SDPI) think tank said on Sunday.

Binici said this in his guest lecture at the Institute, during which he shed light on the evolving economic landscape across the Middle East and North Africa (MENA) region and Pakistan.

Pakistan narrowly avoided a sovereign default in mid-2023 thanks to a shorter $3 billion IMF facility. In Sept. last year, Islamabad secured the 37-month, $7 billion program after meeting targets under the previous arrangement.

The IMF representative said Pakistan’s successful completion of the first review of its loan program, secured last year, by the IMF executive board in May 2025 was a “key milestone.”

“Early policy measures have helped restore macroeconomic stability and rebuild investor confidence, despite persistent external challenges,” Binici was quoted as saying in an SDPI statement.

He, however, cautioned that “elevated trade tensions, geopolitical fragmentation, and weakening global cooperation continue to generate exceptional uncertainty and weigh on the global economic outlook,” underlining the urgent need for prudent and forward-looking policy actions.

“Growth across the Middle East, North Africa (MENA) region, and Pakistan is expected to strengthen in 2025 and beyond,” Binici said.

The IMF representative reaffirmed the global lender’s continued support for Pakistan’s economic and climate reforms agenda.

“Structural reforms remain central to Pakistan’s long-term economic sustainability, particularly reforms that strengthen tax equity, improve the business climate, and encourage private-sector-led investment,” he said.

Binici’s comments came a day after Prime Minister Shehbaz Sharif defended his government’s structural reform agenda, particularly in tax administration, saying that difficult and often unpopular decisions were necessary to rebuild national institutions as the country could no longer afford “business as usual.”

Speaking at a session of the Uraan Pakistan youth development program, he said his administration took on the “onerous task” of stabilizing the economy under immense pressure, choosing to pursue long-delayed reforms rather than temporary fixes.

“Pakistan had to undertake these long-overdue, deep structural changes, if we had to find our lost place in the comity of nations through hard and untiring efforts,” he said.

Sharif noted the transition from paper-based tax systems to digital and AI-led processes was already bearing fruit and his administration had prioritized accountability and removing senior revenue officials accused of corruption, resisting political pressure in doing so.

“It’s a long and thorny journey,” he said, assuring merit would remain the cornerstone of his governance model. “We are facing bumps on the way and mountain-like impediments. But I can assure you, we will not shy away from discharging our responsibility.”


Pakistani commerce minister embarks on ‘pivotal’ UK visit to deepen economic ties

Pakistani commerce minister embarks on ‘pivotal’ UK visit to deepen economic ties
Updated 13 July 2025
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Pakistani commerce minister embarks on ‘pivotal’ UK visit to deepen economic ties

Pakistani commerce minister embarks on ‘pivotal’ UK visit to deepen economic ties
  • The UK maintains zero-tariff access of Pakistan’s exports post-Brexit, making it Islamabad’s largest European export partner
  • The Pakistan-UK trade in goods and services reached £4.7 billion in 2024, an increase of 7.3 percent, compared to the previous year

ISLAMABAD: Pakistani Commerce Minister Jam Kamal Khan has embarked on a “pivotal” official visit to the United Kingdom (UK) from July 14 till July 20 to strengthen economic ties between the two countries, Khan’s ministry said on Sunday.

The minister is accompanied by Commerce Secretary Jawad Paul and this high-level visit aims to deepen bilateral commercial ties, strengthen institutional frameworks, and open new avenues for trade and investment between Pakistan and the UK.

Khan will engage with major Chambers of Commerce in London and Birmingham to advance bilateral trade and explore opportunities in emerging sectors, besides highlighting Pakistan’s export potential and fostering greater business-to-business collaboration.

“One of the central moments of the visit will be the signing of the Terms of Reference (ToRs) for the Pakistan-UK Trade Dialogue,” the commerce ministry said.

“This formalization marks a significant step toward institutionalizing bilateral trade cooperation, injecting greater standardization, transparency, and predictability into the economic relationship between the two countries.”

The UK maintains zero-tariff access of Pakistan’s exports post-Brexit, making it Pakistan’s largest European and third-largest individual export partner, according to the Pakistani foreign ministry.

The Pakistan-UK trade in goods and services reached £4.7 billion in 2024, an increase of 7.3 percent, or £320 million, compared to the previous year, according to the UK government data. Of this £4.7 billion, UK exports to Pakistan amounted to £2.2 billion, while its imports from Pakistan amounted to £2.5 billion.

During his visit, the Pakistani commerce minister is scheduled to meet with members of the UK’s All Parties Parliamentary Group (APPG), where he will advocate for stronger political support in enhancing trade and investment flows, according to the commerce ministry.

These discussions will aim to align parliamentary efforts with Pakistan’s broader economic diplomacy goals and strengthen long-term partnerships.

“Khan will interact with leading UK-based multi-million-dollar companies from key sectors such as food processing, information technology, engineering, fintech, and capital investment. These meetings aim to showcase Pakistan’s economic potential and attract targeted investments into high-growth industries,” the commerce ministry said.

“The visit also includes important meetings with the UK Pakistan Business Council, Pakistan Britain Business Council, and UK Pakistan Chamber of Commerce & Industry. These discussions will focus on strengthening institutional trade linkages and leveraging diaspora-led initiatives to boost trade volumes and visibility in the UK market.”

Pakistan is currently striving to draw overseas investment amid a gradually healing macroeconomic environment after a prolonged downturn that forced Islamabad to seek external financing from friendly nations and multiple loan programs from the International Monetary Fund (IMF).

Khan’s visit follows another trip to the UK in June by Pakistan’s Finance Minister Muhammad Aurangzeb and Prime Minister Shehbaz Sharif’s aide on privatization, Muhammad Ali, who held meetings with executives from renowned firms, including TTB Partners, STJ Partners, Deutsche Bank, Berenberg Bank, and Amundi Fund Group, to spotlight Pakistan’s privatization roadmap and its growing potential as a hub for strategic, long-term investment.

The Pakistani commerce ministry said Khan’s visit marks a “renewed thrust in Pakistan’s efforts to advance economic diplomacy, diversify export markets, and solidify its commercial footprint in global markets like the United Kingdom.”


Pakistan minister to attend tomorrow tri-nation conference in Tehran on pilgrim, border issues

Pakistan minister to attend tomorrow tri-nation conference in Tehran on pilgrim, border issues
Updated 13 July 2025
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Pakistan minister to attend tomorrow tri-nation conference in Tehran on pilgrim, border issues

Pakistan minister to attend tomorrow tri-nation conference in Tehran on pilgrim, border issues
  • The Pakistan-Iran-Iraq conference is being convened on Islamabad’s request
  • Thousands of Pakistanis travel to the two countries annually to visit holy sites

KARACHI: Pakistan’s Interior Minister Mohsin Naqvi is undertaking an official visit to Tehran to attend a tri-nation conference on pilgrim and border issues, the Pakistani interior ministry said on Sunday.

The conference of interior ministers from Pakistan, Iran and Iraq is being convened on a request from Islamabad, according to the Pakistani interior ministry.

Thousands of Pakistani Shiite Muslims, who travel annually to Iran and Iraq to visit holy sites, have often complained of issues at the border.

“Interior Minister Mohsin Naqvi will attend the trilateral conference on pilgrims and border issues in Tehran tomorrow,” the Pakistani interior ministry said on Sunday. “Naqvi will also meet with Iranian President Masoud Pezeshkian.”

Last month, Pakistan evacuated over 260 nationals from Iraq and another 450 Pakistanis who had been stranded in Iran during the Tehran-Israeli conflict.

The 12-day war between Iran and Israel, which began on June 13 Israeli airstrikes on Iranian nuclear facilities and military leadership, raised alarms in a region that was already on edge since the start of Israel’s war on Gaza in October 2023.

Pakistan remained engaged in talks with regional partners like Saudi Arabia, Iran, China and Qatar to de-escalate tensions in the Middle East after Iran conducted retaliatory strikes on Israel and a US base in Qatar, raising fears the conflict could draw in other regional states.


Imran Khan’s party says has launched 90-day ‘do-or-die’ movement against government

Imran Khan’s party says has launched 90-day ‘do-or-die’ movement against government
Updated 13 July 2025
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Imran Khan’s party says has launched 90-day ‘do-or-die’ movement against government

Imran Khan’s party says has launched 90-day ‘do-or-die’ movement against government
  • Ali Amin Gandapur, KP chief minister and a close Imran Khan aide, says movement to ‘reach its peak’ on August 5
  • Information Minister Attaullah Tarar calls the announcement a ‘political gimmick,’ saying Khan’s party is ‘heading toward irrelevance’

ISLAMABAD: Former prime minister Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party announced on Sunday that its 90-day “do-or-die” protest movement against the government has begun, saying that it would determine the future of the party. 

Earlier this month, the PTI announced it would launch a nationwide protest movement after the Islamic month of Muharram, following a ruling by Pakistan’s top court denying the party reserved parliamentary seats for minorities and women.

Tensions further escalated days earlier when 26 PTI provincial lawmakers were suspended by the speaker of the Punjab Assembly for 15 sessions, after they protested during Chief Minister Maryam Nawaz Sharif’s speech on June 27.

Gandapur arrived in the eastern city of Lahore from KP on Saturday to discuss the party’s political strategy and finalize its protest movement against the government.

“We have announced a 90-day protest movement, which began yesterday [Saturday]… And it will be a do-or-die [movement] for us, whether we remain there [in KP government] or not,” Gandapur, flanked by the PTI’s leadership, told reporters at a news conference in Lahore.

The KP chief minister vowed that the party’s anti-government protest movement will “reach its peak” on August 5, marking two years since Khan was arrested after being convicted by a court for illegally selling state gifts. 

Federal Information Minister Attaullah Tarar termed the PTI protest movement a “political gimmick,” saying that Khan’s party had made several such announcements.

“He [Gandapur] has made several such announcements and these are political gimmicks,” Tarar told Arab News.

“PTI has lost street power and its credibility, and is heading toward irrelevance,” the minister added.

Khan, who has remained in prison since then, says the charges against him are politically motivated and has denied wrongdoing. His party has held various protests demanding his release and an independent investigation into the elections of February 2024. 

Pakistan’s government has denied the PTI’s allegations and says the elections of February 2024 were transparent. It accuses the former prime minister and his party of attempting to disrupt the government’s efforts to achieve sustainable economic growth through violent protests.

In one of the PTI’s protests in November last year, the government said four troops were killed in clashes with Khan supporters. The PTI rejects this allegation. 

‘REAL DECISION-MAKERS’

Gandapur alleged that the PTI was being denied its right to hold peaceful protests, vowing that it would now mobilize people across the country.

“We will announce a plan accordingly, after taking all our local workers and leaders into confidence on how to proceed with this movement,” the chief minister said. 

On holding talks with the government, Gandapur said his government was ready to hold talks but with the “real decision-makers,” indirectly referring to the military. 

“Imran Khan has very clearly said this, ‘[I] will only negotiate with those who are decision-makers. What’s the point of talking to someone who doesn’t have any authority?’,” Gandapur said. 

Pakistan’s military says it does not interfere in political issues and rejects the PTI’s allegations that it conspired with Khan’s political opponents to oust his government in a parliamentary vote in April 2022.


Pakistan says atrocities in Palestine, Serbia must not go ‘unnoticed’

Pakistan says atrocities in Palestine, Serbia must not go ‘unnoticed’
Updated 13 July 2025
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Pakistan says atrocities in Palestine, Serbia must not go ‘unnoticed’

Pakistan says atrocities in Palestine, Serbia must not go ‘unnoticed’
  • State minister for overseas Pakistanis participates in memorial service for victims of 1995 Srebenica massacre
  • Aun Chaudhry expresses solidarity with oppressed communities in Palestine and Kashmir, reports state media

ISLAMABAD: Pakistan’s State Minister for Overseas Pakistanis Aun Chaudhry reaffirmed Islamabad’s commitment to protecting human rights globally, urging the world not to let atrocities in Palestine, Serbia and Kashmir go “unnoticed,” state-run media reported on Sunday.

Chaudhry was in Potočari, Bosnia, where he took part in a solemn memorial service in remembrance of the 30th anniversary of the 1995 killings in Srebenica. According to the UN, the Bosnian Serb army overran Srebrenica in July 1995, previously declared a safe area under a UN Security Council resolution, and brutally murdered thousands of men and teenagers there.

Chaudhry laid a floral wreath at the memorial site, paying tribute to those who were massacred in the event 30 years ago. He also spoke about the rights of the people of Gaza, where Israel has killed at least 57,882 Palestinians since the start of the war in 2023, according to the health ministry there. 

“Aun Chaudhary stressed that atrocities whether in Serbia, Palestine, Kashmir or anywhere else in the world must not go unnoticed,” state broadcaster Radio Pakistan reported. 

He reaffirmed Pakistan’s unwavering commitment to the protection of human rights globally, expressing solidarity with oppressed communities in Palestine and Kashmir, the state broadcaster said.

Pakistan, which does not have diplomatic ties with Israel, has consistently criticized Tel Aviv and called on world powers to intervene for an immediate ceasefire in Gaza.

Islamabad has repeatedly demanded an independent Palestinian state, with Al Quds Al Sharif as its capital and as per the pre-June 1967 border.