Pakistan signs contract with consulting giant McKinsey in push to digitize tax collection system 

Visitors walk past the US global management consulting firm, McKinsey & Company, at the Mobile World Congress (MWC), the telecom industry's biggest annual gathering, in Barcelona on February 28, 2023. (AFP/File)
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Updated 11 May 2024
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Pakistan signs contract with consulting giant McKinsey in push to digitize tax collection system 

  • IMF-led structural reforms require Pakistan to raise tax to GDP ratio from around 9 percent to 13 percent-14 percent
  • Global lender wants Pakistan to broaden its existing tax base and improve tax administration

KARACHI: Pakistan signed an agreement with McKinsey and Company on Friday for the digitalization of its tax system, the finance ministry said, as the South Asian nation strives to deliver reforms amid talks with the International Monetary Fund for a new bailout loan.

Among reforms the IMF will likely push for a new package, like the last two packages, are strengthening public finances including through gradual fiscal consolidation, broadening the existing tax base, improving tax administration, and debt sustainability.

In a media brief in December 2023, Pakistan’s main tax collection agency, the Federal Board of Revenue (FBR), said the country had a “very narrow tax base” of around 5.2 million people in 2022, out of a population of 240 million people. The FBR said it plans to add 1.5 million new taxpayers to the existing base during the current fiscal year.

A high-level meeting was held at the FBR headquarters on Friday, following the signing of the contract with the global consulting firm, McKinsey and Company. The meeting was attended by officials from the ministry of finance, FBR, McKinsey and Karandaaz, a not-for-profit company promoting access to finance for small and medium sized enterprises and financial inclusion for individuals.

“The digitalization of the tax system is a pivotal step toward modernizing tax collection which will enhance transparency and revenue growth,” the finance division said in a statement.

“Digital transformation is a key priority for the government, and this collaboration [with McKinsey] underscores the government’s commitment to improving tax collection for promoting sustained economic growth. We look forward to seeing the positive impact of this initiative on Pakistan’s economy,” Finance Minister Muhammad Aurangzeb was quoted as saying in the statement. 

FBR Chairman Malik Amjed Zubair Tiwana said FBR was committed to enhancing revenue collection by leveraging technology to modernize its operations.

“This project [with McKinsey] is a significant step toward achieving FBR’s goals of transparency and efficiency to better serve the people of Pakistan,” Tiwana added. 

With a chronic balance of payment crisis, Pakistan needs $24 billion in payments for debt and interest servicing in the next fiscal year starting July 1 — three times more than its central bank’s foreign currency reserves.

The South Asian nation is seeking yet another long-term, larger IMF loan, with finance minister Aurangzeb saying Islamabad could secure a staff-level agreement on the new program by early July.

If successful, this would be the 25th IMF bailout for Pakistan.

The IMF-led structural reforms require Pakistan to raise its tax to GDP ratio, stop losses in state-owned enterprise and manage its energy sector losses which run into trillions of rupees. 

Pakistan’s finance ministry expects the economy to grow by 2.6 percent in the current fiscal year ending June, while average inflation is projected to stand at 24 percent, down from 29.2 percent in fiscal year 2023/2024.

Inflation soared to a record high of 38 percent last May but eased to 17.3 percent this April after staying above 20 percent for almost two years


Saudi aid agency KSrelief distributes over 2,000 food parcels in Pakistan

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Saudi aid agency KSrelief distributes over 2,000 food parcels in Pakistan

  • Food parcels in flood-affected Sindh and Khyber Pakhtunkhwa regions, benefiting 13,159 people
  • Latest initiative forms part of this year’s Food Security Support Project in Pakistan by KSrelief 

RIYADH: The Kingdom’s aid agency KSrelief has distributed 2,028 food parcels in Pakistan’s flood-affected Sindh and Khyber Pakhtunkhwa regions, benefiting 13,159 people, the Saudi Press Agency reported recently.

Sunday’s initiative forms part of this year’s Food Security Support Project in Pakistan.

The aid reflects the Kingdom’s ongoing humanitarian efforts through KSrelief to assist needy individuals in Pakistan.


Pakistan to cut tariff for electric vehicle charging stations by 44%

Updated 36 min 43 sec ago
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Pakistan to cut tariff for electric vehicle charging stations by 44%

  • The government aims for 30% of vehicles to run on electricity by 2030
  • It has announced a 15-day registration process for charging stations

KARACHI: Prime Minister Shehbaz Sharif announced a 44% reduction in electricity tariffs for electric vehicle (EV) charging stations on Wednesday, cutting rates from Rs71 per unit to Rs39.70 per unit, the power division said in a statement.

Pakistan has actively promoted EV adoption to combat environmental challenges, reduce reliance on imported fossil fuels and improve urban air quality. Under its Electric Vehicle Policy 2019-2024, the government aims for 30 percent of vehicles to run on electricity by 2030.

However, inadequate charging infrastructure, frequent power outages and the high cost of EVs have hindered progress.

“The electricity tariff for charging stations has been reduced from Rs71 to Rs39.70 per unit, marking the first time in Pakistan’s history that EV-specific rates have been lowered by 44 percent,” the statement said.

“In addition, the country’s first-ever regulations for establishing EV charging stations and battery swapping points have been implemented under the National Energy Conservation Authority, with an official gazette notification issued,” it added.

The power division highlighted the economic benefits of these measures, saying that switching motorcycles to electric technology at an average cost of Rs50,000 could save $6 billion annually on fuel.

Similarly, electrifying three-wheeled rickshaws could significantly reduce urban travel costs and help combat air pollution.

The reduced EV charging costs are also expected to lower transportation expenses, positively impacting goods delivery and essential commodity prices.

The government has decided to support these initiatives through a one-window registration process for setting up charging stations and battery points, allowing approvals within 15 days.

Registration fees have been set at Rs50,000 to encourage local and foreign investment.

The power division informed the regulations included provisions for technology neutrality and safety standards, with regular monitoring and audits to ensure compliance.


Pakistani PM orders cooperation with Interpol against suspects running human trafficking schemes abroad

Updated 57 min 24 sec ago
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Pakistani PM orders cooperation with Interpol against suspects running human trafficking schemes abroad

  • Illegal immigration in spotlight in Pakistan since last month after five Pakistani nationals killed in boat capsize off Greek coast 
  • In 2023, hundreds, including 262 Pakistani nationals, drowned when an overcrowded vessel sank off Greek coast

ISLAMABAD: Pakistani Prime Minister Shehbaz Sharif on Wednesday called on the Federal Investigation Agency (FIA) to work with international police organization Interpol for the extradition of suspects running the “heinous business of human trafficking abroad.”

The issue of illegal immigration has been in the spotlight in the South Asian nation since last month following the death of five Pakistanis when a migrant boat capsized off the southern Greek island of Gavdos. 

The tragedy, which occurred on Dec. 14, underscored the perilous journeys many migrants undertake due to military or political conflicts in their home countries or in search of better financial prospects. 

On Wednesday, Sharif presided over a review meeting to discuss progress on actions taken against human trafficking.

“Prime Minister instructed the FIA ​​to seek cooperation from Interpol for the extradition of the most wanted smugglers running the heinous business of human trafficking abroad,” the PM’s office said in a statement. 

“Ministry of Information and Broadcasting should run an effective awareness campaign about illegal foreign travel and human trafficking.”

Authorities told Sharif dozens of traffickers had been arrested in 2024 and several government officials who were found to be facilitating them had been dismissed and several more were facing disciplinary action.

“Punitive measures are being taken against government officials involved in human trafficking,” the statement added. “Assets worth over Rs 500 million of human traffickers have been seized and the process of confiscating more is underway rapidly … Special prosecutors have been appointed to prosecute human traffickers.”

In 2023, hundreds of migrants, including 262 Pakistanis, drowned when an overcrowded vessel traveling from Libya capsized and sank in international waters off the southwestern Greek coastal town of Pylos.


Another round of talks between Imran Khan’s party, government expected tomorrow

Updated 15 January 2025
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Another round of talks between Imran Khan’s party, government expected tomorrow

  • Khan’s Pakistan Tehreek-e-Insaf party held first round of talks with government on Dec. 23, second on Jan. 2
  • Party is demanding the release of political prisoners, judicial commission to probe allegations it led violent protests 

ISLAMABAD: The political party of Pakistan’s imprisoned former Prime Minister Imran Khan will hold another round of talks tomorrow, Thursday, with the government over the release of its leader and other political activists and the formation of a judicial commission to probe accusations the party led violent protests. 

Khan’s ouster in a parliamentary vote of no-confidence in 2022 has plunged the country into long-term political crisis, particularly since the founder of the Pakistan Tehreek-e-Insaf (PTI) was jailed in August last year on corruption and other charges, on which he remains behind bars. His party and supporters regularly hold protests calling for his release, with many of the demonstrations turning violent, including one in November last year in which the government says four troops were killed and the PTI says 12 of its supporters died. 

Khan had previously rejected talks with the government, saying his party would only speak to the ‘real powerbrokers’ in Pakistan, the all-powerful army, but last month he set up a negotiating committee of top party leaders to open dialogue with the government on two main demands: the release of political prisoners and the establishment of judicial commissions to investigate PTI-led protests on May 9, 2023, and Nov. 26, 2024, in which the government says his supporters engaged in violence and arson.

The first round of talks took place on Dec. 23 and the second on Jan. 2.

“We [government committee] told them [PTI] at the last meeting that if you want a judicial commission then what terms of reference do you want, do you have any conditions on who should head it, and similarly, can you give us a list of who you consider political prisoners and then we can answer whether these are political prisoners or not,” Rana Sanaullah, a senior leader of Prime Minister Shehbaz Sharif’s PML-N party, told Pakistan’s Geo News on Wednesday.

“Hopefully, at tomorrow’s [Thursday] meeting, they will give us this list and also their conditions on the judicial commission.” 

Speaking outside a sessions court in the federal capital, PTI Chairman Gohar Ali Khan, who is also Khan’s lawyer, confirmed that another round of talks would be held with the government committee on Thursday. 

“The third session of our negotiations with the government will take place tomorrow and we will submit our written demands,” he told reporters. 

“If the government engages with sincerity and seriousness, solutions to these issues can be found. Democracy and political stability require the release and relief of political prisoners ... We hope this process will conclude soon and bring good news.”

The talks opened last month as Khan had threatened a civil dissidence movement and amid growing concerns he could face trial by a military court for allegedly inciting attacks on sensitive security installations during the May 9 protests.

The negotiations also began two days after 25 civilians were sentenced by a military court to periods of two to 10 years of “rigorous imprisonment” in connection with attacks on military facilities on May 9, 2023. Just days later on Dec. 26, another 60 civilians were sentenced by a military court to jail time ranging from 2 to 10 years in connection with the May 9 attacks.

Khan’s arrest in May 2023 in a land graft case sparked countrywide protests that saw his supporters attack and ransack military installations in an unprecedented backlash against Pakistan’s powerful army generals. Although Khan was released days later, he was rearrested in August that year after being convicted in a corruption case. He remains in prison and says all cases against him are politically motivated. 


Pakistan smoking-related deaths surpass South Asia, global averages — survey

Updated 15 January 2025
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Pakistan smoking-related deaths surpass South Asia, global averages — survey

  • Pakistan’s annual rate is 91.1 per 100,000 people, with 80% smokers expressing desire to quit
  • Average death rate for South Asia is 78.1, while the global average is 72.6 per 100,000 people

ISLAMABAD: Pakistan’s annual smoking-related death rate of 91.1 per 100,000 people significantly exceeds both the South Asian and global averages, according to an analysis by Gallup Pakistan on Tuesday, based on the Global Burden of Disease 2024 report.
Smoking is often initiated at a young age in Pakistan, with many individuals beginning the habit during adolescence. Although laws exist to prevent the sale of cigarettes to anyone under 18 and prohibit sales near schools, enforcement remains weak.
The affordability of cigarettes further contributes to the easy accessibility of tobacco products for youth. Early initiation is additionally driven by peer pressure and the perceived glamor associated with smoking, despite restrictions on promotional activities.
“According to the Global Burden of Disease 2024, Pakistan reports an annual death rate from smoking of 91.1 per 100,000 people, notably higher than the averages for South Asia (78.1) and the rest of the world (72.6),” Gallup said.
“Between 1990 and 2021, Pakistan experienced a 35 percent relative decrease in smoking-related death rates, which is lower than the reductions achieved by India (37 percent), South Asia (38 percent), and the global average (42 percent),” it added.
Gallup also mentioned data from the World Health Organization, saying it showed that purchasing 100 packs of the most-sold cigarette brand requires 3.7 percent of the GDP per capita, significantly lower than India’s 9.8 percent and Bangladesh’s 4.2 percent.
However, cigarette affordability is still decreasing in the country, with the share of GDP per capita needed to buy 100 packs rising by 38 percent between 2012 and 2022 due to price increases.
Gallup also quoted its own 2022 opinion poll, saying 80 percent of smokers in the country expressed a desire to quit smoking.