ISLAMABAD: Pakistan’s plan to raise taxes in its 2024-25 budget and boost state revenues will help it win approval from the International Monetary Fund for a loan to stave off another economic meltdown, but could fuel public anger, a former finance official, experts and industrialists said.
The South Asian country has set a challenging tax revenue target of 13 trillion rupees ($47 billion) for the year starting July 1, a near-40 percent jump from the current year, and a sharp drop in its fiscal deficit to 5.9 percent of GDP from 7.4 percent for the current year.
Pakistan had to reduce its fiscal deficit as part of negotiations with the IMF, with which it is discussing a loan of $6-8 billion, as it seeks to avert a debt default for an economy growing at the slowest pace in the region.
“The budget is enough to get an IMF Programme, as long as ... the budget is passed in the way it is presented,” former finance minister Miftah Ismail said. But he said the revenue targets will be challenging, as will the growth target of 3.6 percent.
“The two cannot happen simultaneously,” said Ismail, who as then-finance minister successfully negotiated the revival of Pakistan’s last Extended Fund Facility (EFF) program in 2022.
Outside analysts largely concur.
Emerging Market Watch’s Metodi Tzanov believes the budget in its current form should be acceptable to the IMF.
“The government ticked almost all the right boxes to comply with IMF conditions, including withdrawal of tax exemptions, raising corporate tax for exporters, increasing the personal income tax rate, tightening the noose around non-filers, and hiking fuel tax,” he said.
But some said the IMF might baulk if it saw the tax target as unrealistic.
Finance Minister Muhammad Aurangzeb, who presented the budget for the first time, said he expected to seal a Staff-Level Agreement with the IMF in July.
The IMF did not immediately publicly comment on the budget and did not respond to questions sent by Reuters.
The big rise in the tax target is made up of a 48 percent increase in direct taxes and 35 percent hike in indirect taxes. Non-tax revenue, including petroleum levies, is seen increasing by a whopping 64 percent.
Taxes have notably been slapped on previously protected export-oriented sectors such as textiles, which consistently make up over half of Pakistan’s exports, and whose receipts keep a persistently high external account deficit in check.
The representative body for the sector, All Pakistan Textile Mills Association, called for a review of the budget, terming it “extremely regressive” and one that “threatens the collapse of the textile sector and its exports.”
It warned of “dire consequences for employment and external sector stability, as well as for overall economic and political stability and security.”
The Pakistan Business Council also called for budgetary measures to be reconsidered.
“The budget prioritizes securing another IMF EFF but lacks innovation for domestic economic growth,” said Musadaq Zulqarnain, director at the Pakistan Textile Council and chairman of Interloop, one of Pakistan’s largest textile manufacturers.
The coalition government of Prime Minister Shehbaz Sharif does not have the luxury of a parliamentary majority to help it pass the budget smoothly.
Sticking to the reform measures will require it to resist pushback from key economic sectors as well as a broader public already angry at the prospect of further price rises.
Sharif’s party had to convince its largest ally, the Pakistan Peoples Party (PPP), without whom it does not have a majority, to attend the budget session in parliamentary. PPP said it was not happy with some of the measures.
But analyst Yousaf Nazar, formerly of Citibank, believes the protestations are just political posturing. “(PPP) won’t rock the boat,” he said.
With few options in the short term to support Pakistan’s recent stability, an IMF program appears crucial.
Increasing the tax base in an economy where proper documentation is often lacking will require considerable time and effort. Pakistan’s undocumented parallel economy is huge and 44 percent of its nominal GDP does not contribute significantly toward direct tax revenue, according to the Tola Associates, a tax firm.
Traders and agriculturalists in particular, both politically influential, have resisted the government’s push to register themselves and document their sales.
“If the tax base is not going to increase, moving forward, the country’s tax revenues growth can drop further and it might end up as a dead weight loss to the economy,” Tola Associates said in a note.
“The real challenge is that of implementation,” said former central bank chief and Managing Director at Alvarez & Marsal Reza Baqir.
“For example, the budget targets an ambitious increase in the tax-to-GDP ratio. Many previous budgets have similarly targeted ambitious improvements. I would hope that the lessons from why those ambitions were not realized have been reflected in this budget.”
Pakistan’s tax-heavy budget likely to land IMF bailout, but stoke tensions
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Pakistan’s tax-heavy budget likely to land IMF bailout, but stoke tensions
- Coalition government of PM Sharif does not have the luxury of a parliamentary majority to help it pass the budget smoothly
- Pakistan has set challenging tax revenue target of $47 billion for the year starting July 1, near-40% jump from current year
At UNAOC forum, Pakistan raises concern over ‘alarming rise’ in attacks on mosques
- Statement comes amid ongoing Israeli invasion of Gaza where nearly 1,000 mosques have been destroyed
- Palestinian Religious Affairs Ministry has said about 300 Islamic scholars have been killed in the military strikes
ISLAMABAD: Pakistan has raised the issue of an “alarming rise” in attacks on mosques and other Islamic religious and heritage sites at the 10th UN Alliance of Civilizations (UNAOC) Global Forum, the foreign office said on Wednesday.
Additional Foreign Secretary Imran Ahmed Siddiqui represented Pakistan at the UNAOC Global Forum, the UNAOC High Level Group of Friends Ministerial Meeting and the Global Conference on safeguarding religious sites held in Cascais, Portugal, with the ambassador of Pakistan to Portugal, Khalid Ejaz, part of the Pakistan delegation.
“Additional Foreign Secretary reaffirmed Pakistan’s unwavering commitment to combating Islamophobia and expressed concern at the alarming rise in deliberate attacks on mosques, often carried out with impunity and state sanction,” the foreign office said.
“He urged the UNAOC to prioritize the protection of mosques and other Islamic religious and heritage sites that are under immediate threat of destruction.”
The statement comes amid the ongoing Israeli invasion of Gaza, which has resulted in significant destruction and damage to numerous religious sites including mosques and churches. By March this year, more than 1,000 mosques had been destroyed by Israeli attacks.
Hundreds of imams and religious scholars have also been killed as a result of the campaign in Gaza. The Palestinian Ministry of Awqaf and Religious Affairs has said about 300 Islamic scholars, including Qur’an teachers, Islamic preachers and imams, have been killed in strikes.
Bundoo Khan: How one restaurant parlayed barbeque into a Karachi landmark
- Founded in 1948, Bundoo Khan Restaurant is a mainstay for politicians, celebrities, and residents of the port city
- Eatery first gained prominence when its barbeque caught the eye of ex-president Ayub Khan at a local exhibition
KARACHI: For over seven decades, the Bundoo Khan Restaurant has been a culinary landmark in the Pakistani port city of Karachi, delighting generations of food lovers with its signature kebabs, sizzling chicken tikkas and crunchy parathas.
Founded in 1948 by Al Hajj Bundoo Khan, a migrant from Meerut in present day India, the restaurant began as a humble barbecue stall on Karachi’s MA Jinnah Road, then known as Bandar Road, using family recipes passed down from a maternal uncle.
While the eatery was a hit from the beginning, it gained visibility when its innovative approach to grilling and marinating caught the eye of General Ayub Khan, who served as the president of Pakistan from 1958 until his resignation in 1969. Becoming a favorite of the president turned the small eatery into the talk of the town, and it began to draw large crowds from all walks of life.
“My father can be called the founder of barbecue [in Karachi],” Akber Bundoo Khan, the founder’s 62-year-old son, told Arab News.
“No one knew how to make tikka [like him], how kebabs were made, how parathas were made or how halwa was made.”
Indeed, barbeque has become synonymous with the Bundoo Khan name in Karachi, cementing its reputation as a must-visit destination for the city’s residents and a gathering place for politicians, government officials, actors and singers.
“This brand has been around for 76 years,” said Waqar Mehmood, Bundoo Khan’s grandson who oversees a branch in the city’s Sindhi Muslim area.
“When we first set up an exhibition [during the first few decades], the first person to visit was [Pakistan’s former president] Ayub Khan who gave us the first prize and a gold medal for our barbecue.”
Mehmood spoke about visits to the restaurant by General Ayub Khan’s family, as well as Pakistan’s former first lady Ranaa Liaquat Ali Khan, ex-premier Zulfiqar Ali Bhutto and the now jailed former Prime Minister Imran Khan. Legendary Pakistani actors like Muhammad Ali, Zeba and Waheed Murad were also loyal patrons and iconic singer Noor Jehan continued to request Bundoo Khan’s food until her last days before she passed away in 2000.
“Every day, I would personally take her double-spiced chicken tikka and six kebabs to the hospital,” he said.
The restaurant’s influence has also been immortalized in Pakistani music, with songs like Ahmed Rushdi’s 1954 hit “Bandar Road Se Keamari” and Mehdi Hassan’s 1977 track “Makhan Jesi Larki,” both mentioning the eatery.
Pakistani TV and film actor Behroze Sabzwari recalled childhood memories of visiting the original branch on MA Jinnah Road and meeting the restaurant’s founder, who passed away in 1987 at the age of 105.
“I lived and grew up in the area right behind the Bundoo Khan [Restaurant] in Jacob Line,” he told Arab News. “It wasn’t much, but you could get tikka for just 10 or 15 rupees [$0.05] and everything else as well. And believe me, the taste from those days of that halwa, that tikka, those kebabs, that paratha still lingers with me to this day.”
Asad Sohail, an engineer and regular customer, also recalled visiting Bundoo Khan as a child with his father and grandfather, saying dinner at the restaurant was a must after a night out at the movies.
“We used to come here with my grandfather, wearing shorts, when we were little. Then, as kids, we came with our father,” he said.
“Their barbecue, I haven’t tasted anything like it anywhere in Pakistan. It’s truly unique. Their kebabs are so tender, the marination is perfect, and the tikka, what can I say? It’s completely different from anything else.”
Today, while the restaurant keeps attracting new customers at all its branches in Karachi and across Pakistan as well as in Dubai and Madinah, the first branch on MA Jinnah Road has seen a decline in clients in recent years due to a rise in crime in the area.
Still, Akber Bundoo Khan’s son insists the original location will never shut down.
“This is our asset,” he said. “The flavor that started here has spread all over the world. It’s because of this taste that we’re famous ... Our identity, our entire legacy, has been built from here.”
Pakistan’s largest province launches project to clean cities, sets three-month zero waste target
- Pakistan is estimated to generate approximately 49.6 million tons of solid waste per year
- Most collected waste in Punjab, province of 128 million people, is dumped in open sites
ISLAMABAD: Punjab Chief Minister Maryam Nawaz Sharif has launched a first of its kind project to clean up cities and villages in Pakistan’s largest province, setting a three-month zero waste target as the South Asian nation of 240 million grapples with a growing waste management problem.
According to the Waste Management update by the International Trade Administration, Pakistan generates nearly 49.6 million tons of solid waste annually. In big cities, 60 percent of the solid waste is collected daily while 40 percent remains in empty plots, street corners, abandoned buildings, open drains and nullahs.
Pakistan has few managed landfill sites for waste disposal. Most collected solid waste in Punjab, which has a population of around 128 million, is simply dumped in open sites.
All major cities face enormous challenges on how to manage urban waste. Bureaucratic hurdles, lack of urban planning, inadequate waste management equipment and technology, and low public awareness contribute to the problem.
“For the first time, the Punjab government has launched a program to clean cities and villages on a uniform basis,” Sharif said at a ceremony to launch the ‘Suthra Punjab’ program across the province. “Keeping our streets and neighborhods like our own houses is our foremost duty.”
She said around 100,000 people would be employed for the project within a few weeks and engaged to clean city roads and streets.
“As many as 21,000 modern machines and more than 80,000 equipment are being provided for cleaning and garbage collection across Punjab,” the CM said. “The industry related to sanitation and waste management will be promoted.”
Local and municipal governments are responsible for collecting waste throughout most of Pakistan’s major cities. In cities, about 60–70 percent of solid garbage is collected, with the garbage collection fleet typically consisting of open trucks, tractor/trolley systems, and arm roll containers/trucks for secondary collection and transfer. Handcarts and donkey pull-carts are used for primary collection. Some municipalities hire street sweepers and sanitary workers to augment other collection methods. They use wheelbarrows and brooms to collect solid waste from small heaps and dustbins, then store it in formal and informal depots.
Karachi, Pakistan’s largest city, makes use of three sanitary landfill sites, whereas Lahore, the country’s second-largest city and the provincial capital of Punjab, has two such sites. There are plans to construct appropriate landfill sites in other major cities as well. In several regions, solid waste is disposed of outside the boundaries of the urban areas.
Solid waste management capabilities and systems vary by province. In Punjab, Lahore is the only city with a proper solid waste management, treatment, and disposal system, which was outsourced to Turkish companies Albayrak and OzPak.
In Sindh, the Sindh Solid Waste Management Board (SSWMB) aims to improve solid waste management services in 20 cities, and regularly announces tenders for a wide range of waste management projects in the province. In Khyber Pakhtunkhwa, the Water and Sanitation Services Peshawar (WSSP) is planning to build a sanitary landfill. Balochistan, Pakistan’s largest province by area but with a sparse population of 6.9 million, has no significant infrastructure for waste management.
Much of Pakistan’s solid waste is retrieved for recycling, primarily by scavengers, before it ever reaches disposal locations, and a large portion of the country’s solid waste never makes it to final disposal sites.
Pakistani PM meets Macaron in Riyadh, invites him to invest in climate adaptation, renewable energy
- Government is seeking to focus on more sustainable forms of external financing like direct investment and climate financing
- South Asian nation is one of the most vulnerable countries to climate change, according to the Global Climate Risk Index
ISLAMABAD: Prime Minister Shehbaz Sharif on Tuesday held a bilateral meeting with the president of France, Emmanuel Macron, on the sidelines of the One Water Summit in Riyadh and invited him to explore investment opportunities in Pakistan, particularly in the domains of climate adaptation and renewable energy.
As the South Asian nation, one of the most vulnerable countries to climate change, pursues external financing avenues, its government is seeking to focus on more sustainable forms such as direct investment and climate financing.
“Prime Minister stressed upon the need to further strengthen mutually advantageous economic and trade ties between the two countries and encouraged France to take advantage of investment opportunities in Pakistan, especially in areas of climate adaptation and renewable energy,” Sharif’s office said in a statement after he met Macron.
“Both leaders agreed to enhance Pakistan France cooperation especially through the business to business contacts in the areas of agriculture, livestock, IT, skills development and clean drinking water.”
The statement said the two leaders exchanged views on the “full spectrum of Pakistan-France relationship, including political, economic, trade and investment, as well as cooperation at multilateral forums, including the United Nations.”
Pakistan–France relations span the military, defense, cultural, educational cooperation, and economic domains. Pakistani exports to France stood at $484.79 million during 2023, according to the United Nations COMTRADE database on international trade, while Pakistan imported were at $254.85 million.
Pakistan and France also have had a long-standing military relationship, with France being a key partner in enhancing the capabilities of Pakistan’s navy and air force. France and Pakistan began their military relationship in 1967 when France sold Pakistan its first batch of Mirage fighters and submarine technology. In 1990, Pakistan bought a second batch of Mirage fighters, and in 1996, the two countries signed a contract for 40 reconnaissance aircraft.
In February 2023, Pakistan and France signed a roadmap to deepen their defense and security cooperation, including on counter-terrorism.
Pakistan uses ECO platform to put spotlight on Israeli aggression in Palestine, Lebanon and Syria
- Deputy PM Ishaq Dar demands end to ‘genocide’ in Gaza, urges respect of Lebanon and Syria’s sovereignty
- The people of these countries and the wider region deserve to live free from fear and violence, he says
ISLAMABAD: Pakistan’s deputy prime minister and foreign minister, Ishaq Dar, on Tuesday condemned Israeli military actions in Palestine, Lebanon and Syria, calling for peace and security in the Middle East.
Dar said this while addressing a summit of the Economic Cooperation Organization’s (ECO) Council of Foreign Ministers in Mashhad, Iran. The ECO is a political and economic intergovernmental organization that promotes economic, technical, and cultural cooperation among member states.
In his address with the summit, Dar denounced the Israeli “genocide” in Gaza and its aggression against Lebanon and Syria, saying it had endangered peace in the Middle East.
“We are concerned over the escalating hostilities in the Middle East, wherein Israel has endangered regional peace and security. The people of Palestine, Lebanon, Syria and the wider region deserve to live free from fear and violence,” he said.
“Pakistan reiterates its call to uphold peace and security in this region, safeguard Lebanon’s and Syria’s sovereignty, and put an end to the ongoing humanitarian crisis in Palestine.”
Since Oct 7, 2023 attacks by Hamas, Israel’s military campaign in Gaza has killed over 43,000 people and injured thousands more. Israeli strikes on Lebanon, Iran and Syria have also heightened fears of a wider war in the Middle East.
Pakistan does not recognize nor have diplomatic relations with Israel and calls for an independent Palestinian state based on “internationally agreed parameters.”
The South Asian country has so far dispatched several relief consignments for Gaza and Lebanon, besides establishing the ‘Prime Minister’s Relief Fund for Gaza and Lebanon’ that aims to collect public donations for the war-affected people.
