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Pakistan moves closer to IMF target as tax-to-GDP ratio climbs to 10.6 percent

Pakistan moves closer to IMF target as tax-to-GDP ratio climbs to 10.6 percent
People walk past a sidewalk money exchange showcase, which is decorated with pictures of currency notes, in Karachi, Pakistan on September 12, 2023. (REUTERS/File)
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Updated 53 min 32 sec ago

Pakistan moves closer to IMF target as tax-to-GDP ratio climbs to 10.6 percent

Pakistan moves closer to IMF target as tax-to-GDP ratio climbs to 10.6 percent
  • Pakistan aims to meet 13% tax-to-GDP ratio under 37-month IMF program
  • Income tax filers rise to 7.2 million, with $1.6 billion jump from retail sector

ISLAMABAD: Pakistan’s tax-to-GDP ratio rose by 1.5 percentage points in fiscal year 2024–25 to reach 10.6%, officials said on Wednesday, marking progress toward the government’s 13% target under a three-year International Monetary Fund (IMF) reform program.

The increase comes as part of fiscal commitments under a 37-month Extended Fund Facility (EFF) with the IMF approved last year. During a review meeting in Islamabad, Prime Minister Shehbaz Sharif called for tighter oversight and accelerated digital reforms to expand the country’s tax base and bring more of the informal economy into the net.

The tax-to-GDP ratio had stood at 9.1% the previous year, and rose to 10.6% by the end of June 2025, according to a briefing at the meeting chaired by the prime minister.

The government aims to continue raising the ratio under a wider economic and structural reform agenda backed by the IMF, which includes digitization of the Federal Board of Revenue (FBR), to improve enforcement and increase compliance.

“Digitization at the FBR has helped meet targets, but steps must now be taken to ensure the system becomes sustainable,” the prime minister was quoted as saying in a statement released by his office. “Enforcement must be strengthened further to curb the informal economy.”

The meeting was told that total tax revenue collected in FY2024–25 crossed Rs20.4 trillion ($71.4 billion), while the number of income tax return filers jumped from 4.5 million in 2024 to over 7.2 million by June 2025.

Officials credited the increase to enhanced enforcement, including reforms in the retail sector, integration of point-of-sale systems, and an expanded digital footprint.

They said tax revenue from the retail sector alone rose by Rs455 billion ($1.6 billion) compared to the previous year.

The prime minister instructed FBR to fast-track the restructuring of its digital wing, set deadlines for implementation, and consult all stakeholders, including taxpayers and the business community, to ensure the reform process remains inclusive.

He also praised FBR officials and directed them to present actionable targets for the next phase of reforms within a week.


Deputy PM Dar invites New York investors to leverage Pakistan’s youth, consumer base

Deputy PM Dar invites New York investors to leverage Pakistan’s youth, consumer base
Updated 11 sec ago

Deputy PM Dar invites New York investors to leverage Pakistan’s youth, consumer base

Deputy PM Dar invites New York investors to leverage Pakistan’s youth, consumer base
  • Ishaq Dar informs investors about Pakistan’s streamlined processes for investment in priority sectors
  • Pakistan has eyed increasing foreign investment in recent years to escape prolonged economic crisis

ISLAMABAD: Deputy Prime Minister Ishaq Dar on Wednesday urged investors in New York to leverage Pakistan’s young population and large consumer base for diverse investment opportunities, Pakistan’s foreign ministry said.

Pakistan has increasingly eyed foreign investment from regional allies and partners, particularly since it formed the Special Investment Facilitation Council (SIFC) in 2023, to escape a prolonged macroeconomic crisis. The SIFC aims to attract investment in key economic sectors such as minerals, IT, tourism, agriculture and livestock.

Dar, who also serves as Pakistan’s foreign minister, arrived in the United States on July 21 and is scheduled to lead high-level signature events at the UN headquarters till July 28. The deputy premier met a group of businessmen and investors in New York to share his perspective on Pakistan’s improving economic landscape, the foreign ministry said.

“He encouraged the participants to explore diverse investment opportunities in Pakistan with a view to leveraging the large consumer base, young population, growing digital economy, and advantageous geographic positioning toward mutually rewarding outcomes,” the statement said.

Pakistan has a sizable population of over 240 million people, where nearly 64 percent are under the age of 30. Islamabad has recently taken several measures to adopt digital financial assets to ensure economic growth as the world embraces new forms of currency.

Dar stressed the critical role of the Pakistani diaspora toward realizing the trade, investment and economic ties between Pakistan and the US, the statement added.

He informed investors about the SIFC’s streamlined processes for investors across priority sectors such as agriculture, IT, minerals, energy and tourism.

“The participants expressed their commitment to fostering deeper economic collaboration and long-term investment engagement between the two countries,” the ministry concluded.

Pakistan considers the US an important trade ally as it is the South Asian country’s top export destination. Pakistan’s exports to the US totaled $5.44 billion in FY2024, as per official data.

Prime Minister Shehbaz Sharif’s government has linked Pakistan’s economic revival to an export-driven growth and partnerships based on what the premier describes as “mutually beneficial” with allies.


Afghanistan and Pakistan sign preferential trade deal to slash tariffs on key fruits, vegetables

Afghanistan and Pakistan sign preferential trade deal to slash tariffs on key fruits, vegetables
Updated 7 min 47 sec ago

Afghanistan and Pakistan sign preferential trade deal to slash tariffs on key fruits, vegetables

Afghanistan and Pakistan sign preferential trade deal to slash tariffs on key fruits, vegetables
  • Tariffs on eight exports between Pakistan and Afghanistan to drop from over 60% to 27%
  • Agreement begins on August 1, 2025 and is renewable with scope to add more products

ISLAMABAD: Afghanistan and Pakistan have signed a Preferential Trade Agreement (PTA) to reduce tariffs on eight agricultural products, the Afghan embassy in Islamabad announced on Wednesday, in a rare move of economic cooperation between the two neighbors with often-tense ties.

The agreement, signed by senior commerce officials from both countries, will reduce customs duties on four Afghan exports to Pakistan — grapes, pomegranates, apples, and tomatoes — and four Pakistani exports to Afghanistan — mangoes, kinnows, bananas, and potatoes.

Tariff rates on these items, which previously exceeded 60%, will now be capped at 27%.

“This agreement will be effective for a period of one year, commencing on August 1, 2025,” the Afghan embassy said on X.

“It is renewable and also allows for the inclusion of additional items in the future.”

The deal was signed by Mullah Ahmadullah Zahid, Deputy Minister at Afghanistan’s Ministry of Industry and Commerce, and Jawad Paul, Pakistan’s Deputy Commerce Minister.

The agreement comes at a time of strained political and security relations between Kabul and Islamabad, marked by border closures, mutual accusations over cross-border militant activity, and reduced formal trade volumes since the Taliban returned to power in 2021.

Still, both countries remain heavily reliant on overland trade routes, and fruit exports have long played a vital role in seasonal cross-border commerce.

In the first half of 2025, Pakistan and Afghanistan’s bilateral trade reached nearly $1 billion, with Afghan exports to Pakistan totaling $277 million and Pakistan’s exports to Afghanistan reaching $712 million. This growth is partly attributed to increased Pakistani exports, including medical supplies, parboiled rice, and sugar. However, trade volume is still below potential, with estimates suggesting it could reach $8 to $10 billion annually if obstacles are overcome.

Obstacles to trade between Pakistan and Afghanistan include border closures, security concerns, and issues with trade facilitation. Specifically, frequent closures of border crossing points like Torkham and Spin Boldak, triggered by political tensions or security incidents, disrupt trade flows and cause financial losses for businesses. Additionally, challenges related to trade facilitation, customs procedures, and transit infrastructure further hinder the smooth movement of goods.


Zahir Jaffer files petition for Pakistan top court to overturn death sentence for Noor Mukadam murder 

Zahir Jaffer files petition for Pakistan top court to overturn death sentence for Noor Mukadam murder 
Updated 41 min 42 sec ago

Zahir Jaffer files petition for Pakistan top court to overturn death sentence for Noor Mukadam murder 

Zahir Jaffer files petition for Pakistan top court to overturn death sentence for Noor Mukadam murder 
  • Convicted killer claims top court ignored key evidence and made due process errors
  • Final petition calls for acquittal or retrial nearly three years after brutal killing of envoy’s daughter 

ISLAMABAD: Zahir Zakir Jaffer, the man convicted of one of Pakistan’s most harrowing femicide cases, has filed a review petition at the Supreme Court to overturn his death sentence for the 2021 beheading of Noor Mukadam.

In the petition, filed under Article 188 of the Constitution and seen by Arab News on Wednesday, Jaffer argues that the May 2024 judgment upholding his death sentence contains “mistakes floating on the surface of the record.” He alleges that the court failed to consider material facts and due process violations that, if reviewed, would prove his innocence.

The petition argues that widespread social media coverage had fueled public hostility toward Jaffer during the investigation, trial, and appeals process, undermining his right to a fair trial. It also cites a ruling from another case to suggest that procedural errors occurred because the case was handled in haste.

“The impugned judgment may very graciously be reviewed, recalled and set aside,” the petition states, “and the petitioner may very graciously be acquitted of the charges or in the alternate, may be ordered to be re-tried afresh.”

The Supreme Court had previously declared the evidence against Jaffer “overwhelming” and found no merit in his insanity defense. But in this final legal challenge, Jaffer’s lawyers argue the case involved “misreading and non-reading of material evidence,” and claim that he was denied a fair trial.

Jaffer, a dual Pakistani-American citizen from a wealthy business family, was convicted of torturing and beheading Mukadam, the daughter of a former ambassador, at his Islamabad home in July 2021. The murder triggered national outrage, women-led protests, and rare scrutiny of elite impunity in Pakistan’s legal system

Jaffer was sentenced to death in February 2022 and lost appeals in the Islamabad High Court and Supreme Court. In its May ruling, the apex court said Jaffer had confined Mukadam for two days, ignored her pleas, and “beheaded her in a gruesome manner.”

“All the evidence pointed squarely to the petitioner,” the justices wrote, citing testimony from guards, digital records, and Mukadam’s attempts to flee the house.

The scope of review petitions in Pakistan is extremely narrow and restricted to identifying legal errors, not reassessing facts. Unless the Supreme Court admits the review, Jaffer’s last option will be a clemency request to the President of Pakistan, which the Mukadam family has vowed to challenge.


Trump aide Richard Grenell meets Imran Khan’s sons, urges release of jailed former PM

Trump aide Richard Grenell meets Imran Khan’s sons, urges release of jailed former PM
Updated 23 July 2025

Trump aide Richard Grenell meets Imran Khan’s sons, urges release of jailed former PM

Trump aide Richard Grenell meets Imran Khan’s sons, urges release of jailed former PM
  • Grenell has backed Khan in recent months, with his support seen as symbolically important by PTI followers
  • Khan’s sons are expected to join a planned protest campaign early next month, calling for their father’s release

ISLAMABAD: Richard Grenell, the US Envoy for Special Missions under President Donald Trump, met with the jailed former Pakistani Prime Minister Imran Khan’s sons in California on Wednesday and renewed calls for their father’s release, describing his imprisonment as “political prosecution.”

A close aide to the US president, Grenell has been a vocal supporter of Khan in recent months. His endorsement is seen as symbolically significant by supporters of Khan’s Pakistan Tehreek-e-Insaf (PTI) party who are seeking international attention on the issue.

In a post on social media platform X, Grenell shared a photo with Sulaiman and Kasim Khan, saying:

“You must stay strong. There are millions of people around the world who are sick of political prosecutions. You are not alone. #FreeImranKhan.”

The meeting comes as PTI prepares to launch a protest campaign in Pakistan demanding Khan’s release. The party has announced that Khan’s sons, who have largely avoided political engagement, will also participate in the campaign.

Khan, 71, has been jailed since August 2023 and is currently serving a sentence on a number of charges. PTI says he faces more than 100 legal cases, all of which he calls politically motivated.

PTI also remains under pressure, with several senior leaders behind bars and others in hiding or facing legal challenges. Rights groups have accused Pakistani authorities of cracking down on dissent and curbing space for political opposition.

In a rare social media post last month, Khan’s sons raised concerns about their father’s prison conditions and called for his release, saying they feared for his health and well-being.

The PTI has yet to finalize details of its planned protest campaign, expected to begin in early August to coincide with the second anniversary of Khan’s arrest.

The party has framed the movement as a democratic struggle for civil liberties and judicial independence.


Pakistan seeks UN Human Rights Council seat, pledges consensus-based engagement

Pakistan seeks UN Human Rights Council seat, pledges consensus-based engagement
Updated 23 July 2025

Pakistan seeks UN Human Rights Council seat, pledges consensus-based engagement

Pakistan seeks UN Human Rights Council seat, pledges consensus-based engagement
  • Pakistan has previously served multiple terms on the Geneva-based Human Rights Council
  • Dar reaffirms support for UN reforms, multilateral diplomacy during Security Council presidency

ISLAMABAD: Pakistan has this week formally announced its candidacy for a seat on the United Nations Human Rights Council for the 2026–2028 term, vowing to pursue a platform based on tolerance, universality and consensus-building.

The announcement was made by Deputy Prime Minister and Foreign Minister Ishaq Dar on Wednesday during a reception hosted by Pakistan’s Mission in New York as the country assumed the rotating presidency of the UN Security Council for the month of July.

Pakistan has previously served multiple terms on the Geneva-based Human Rights Council, which is composed of 47 member states elected for staggered three-year terms by the UN General Assembly. The next round of elections is scheduled for late 2025.

“Pakistan has also presented its candidature for election to the Human Rights Council for the term 2026–2028. Our engagement with the Human Rights Council is guided by the idea of truth, tolerance, respect, universality, consensus-building and engagement,” Dar said at the dinner.

“Pakistan’s candidature is endorsed by the Asia-Pacific Group, and we hope to count on your valuable support.”

The announcement coincides with Pakistan’s broader push for UN reform, its active participation in Security Council deliberations this month and its ongoing diplomatic efforts to strengthen the UN system’s focus on peace, development, and rights.

Dar also used the reception to reaffirm Pakistan’s commitment to multilateral diplomacy and UN Charter principles, especially the peaceful resolution of disputes and the non-use of force. 

As part of its Security Council presidency, Pakistan has prioritized three areas: the peaceful settlement of disputes, multilateralism and enhanced cooperation between the UN and regional bodies such as the Organization of Islamic Cooperation (OIC), Dar explained. 

“These same guiding principles continue to shape our contributions to the Council’s work, including in our presidency this month, both in deliberations and in action,” the deputy prime minister said, noting that Pakistan continues to support “reform of the United Nations to make this organization stronger, more effective, and more responsive to the interest and priorities of the general membership.”

Pakistan, he added, has “championed strengthening of the three pillars of the United Nations — peace and security, development and human rights,” including across the General Assembly, ECOSOC, and other multilateral platforms.

On Tuesday, under Pakistan’s presidency, the UNSC unanimously adopted a resolution calling on member states to use peaceful means to resolve disputes.

The resolution encourages states to make full use of existing mechanisms such as “negotiation, mediation, arbitration, judicial settlement or other peaceful means,” in accordance with the UN Charter.