Pakistani trade bodies warn tax-heavy budget may trigger brain drains, stifle growth 

In this picture taken on May 19, 2021, Pakistani nationals, wearing face masks amid concerns over the spread of the Covid-19 coronavirus, wait in a queue to apply for a visa outside Afghanistan's embassy in Islamabad. (AFP/File)
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Updated 27 June 2024
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Pakistani trade bodies warn tax-heavy budget may trigger brain drains, stifle growth 

  • Pakistani trade bodies, businesspersons accuse government of ignoring their budget recommendations
  • Builders say increased taxes on construction sector will cause people to transfer remittances to other countries

KARACHI: Pakistan’s apex trade bodies on Thursday warned that the proposed taxation measures in the federal budget 2024-25 could trigger a brain drain in the country, especially in its Information Technology sector, and stifle growth and innovation. 

Atif Iqbal Sheikh, the president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) briefed journalists regarding the IT industry’s grievances on the proposed federal budget 2024-25. 

The tax-heavy budget presented earlier this month by Finance Minister Muhammad Aurangzeb, has invited criticism from the government’s allies and opposition. Lawmakers have urged the government to do away with heavy taxes on the salaried class and items of necessary use. 

Sheikh said despite repeated assurances from the government, the IT industry’s budgetary proposals were completely ignored.

“The measures would expedite brain drain from the country due to high taxation which would stifle growth and innovation,” Sheikh told reporters at a news conference.

The FPCCI president said the proposed budget confirms the finance division’s “short-sightedness vis-à-vis IT industry,” adding that it would “derail” the sector. 

Saquib Fayyaz Magoon, senior vice president of the FPCCI, said Pakistan Software Houses Association (P@SHA) has highlighted that the taxes imposed on the salaried class could lead to a brain drain.

“This issue is compounded by the remote worker tax regime, which undermines the government’s goal of increasing revenue and expanding the tax net,” he explained. 

Magoon highlighted that the Rs79 billion amount allocated in the budget is primarily for government projects and IT parks, meaning it had neglected the broader IT industry. 

'BLEAK FUTURE'

P@SHA Chairman Muhammad Zohaib Khan agreed that the remote worker tax regime further undermines the government’s revenue goals.

“Remote workers, often paid in foreign currencies, face lower tax burdens compared to domestic employees,” Khan explained, adding that this move incentivizes companies to reclassify senior staff as remote workers, which in turn leads to inefficiencies and tax revenue loss for the government. 

Khan said to address these discrepancies, P@SHA proposes a competitive tax rate for payroll, such as a flat 5 percent for P@SHA and PSEB-registered IT companies. This would encourage formal employment and prevent brain drain, he said. 

He lamented the government’s move to increase GST (goods and services tax) on laptops and desktop computer imports. 

“The association points out anomalies in current tax laws, such as increased GST on laptop and desktop imports, depicting a bleak future for Pakistan’s IT industry,” Khan lamented. 

BUILDERS VOICE CONCERN

Meanwhile, Karachi’s prominent builders and developers also expressed concerns over the taxation measures in the budget, describing it as “destructive” for the construction sector.

“The burden of more taxes on the construction industry in budget 2024-25 will shift remittances to other countries and the local industry will be destroyed,” Asif Sumsum, chairman of the Association of Builders and Developers of Pakistan (ABAD) said in a statement. 

He warned such measures would cause millions in the country to be unemployed and lose their homes. 

Sumsum pointed out that a large part of the foreign exchange sent by Pakistanis living abroad is invested in the construction industry. He said protecting local industries and providing employment to citizens were among the government’s main responsibilities. 

“The government should provide protection to the local industries to prevent the increase in unemployment in the country,” he said.


VISA to triple Pakistan office size, partner with 1-Link, PayPak — finance minister

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VISA to triple Pakistan office size, partner with 1-Link, PayPak — finance minister

  • Muhammad Aurangzeb hails company’s role in advancing digital payments and financial inclusion
  • The finance minister also assures the US financial services company of the government’s full support

ISLAMABAD: Finance Minister Muhammad Aurangzeb said on Thursday US financial services company Visa will triple the size of its office in Pakistan and collaborate with the country’s first-ever domestic payment card scheme, 1Link and PayPak.
Visa Inc. is a global payments technology company that operates one of the world’s largest electronic payment networks, enabling consumers and businesses to make payments using Visa-branded credit, debit and prepaid cards.
Visa doesn’t issue cards itself but partners with banks and financial institutions to do so. 1Link and PayPak is similar in concept to Visa or Mastercard but is designed specifically for local use within Pakistan.
The Pakistani minister, currently in Washington, appreciated Visa’s role in the digitalization of his country’s economy during a meeting with the company’s regional vice president, Andrew Torre.
“He [Aurangzeb] noted that Visa’s decision to triple the size of its office in Pakistan and its collaboration with 1Link and PayPak would contribute significantly to promoting financial inclusion, e-commerce, transaction security, and payment gateways in Pakistan, as well as facilitate remittances,” the finance ministry said in a statement issued after the meeting.
It added the finance minister also assured the company of the government’s full support in resolving any issues faced by them.
Aurangzeb’s meeting with Torre came as the country works toward a more inclusive and digitally empowered economy, with government backing and private sector innovation aligned.


Pakistan Senate rejects Indian attempt to link it to Kashmir tourist attack

Updated 32 min 53 sec ago
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Pakistan Senate rejects Indian attempt to link it to Kashmir tourist attack

  • Deputy PM Ishaq Dar says India must be held accountable for its acts of ‘terrorism’ in Pakistan
  • He also reaffirms Pakistan’s ‘moral, political and diplomatic’ support to the people of Kashmir

ISLAMABAD: Pakistan’s Senate on Friday unanimously passed a resolution condemning what it called India’s “frivolous and baseless” attempts to link Islamabad to a deadly shooting in the disputed Himalayan region of Kashmir, rejecting the allegation and accusing New Delhi of using “terrorism” as a political tool.
India has blamed Pakistan for the attack in the scenic town of Pahalgam in Kashmir’s Anantnag district, where gunmen killed 26 civilians on Tuesday in the deadliest assault on non-combatants in nearly two decades.
Pakistan has denied any involvement in the incident, with Deputy Prime Minister Ishaq Dar reading out the resolution in the upper house of parliament that was later adopted by all the lawmakers.
“The Senate of Pakistan condemns terrorism in all its forms and manifestation, emphasizes that killing of innocent civilians is contrary to the values upheld by Pakistan [and] rejects all frivolous and baseless attempts to link Pakistan with the Pahalgam attack of 22nd April 2025 in Indian Illegally Occupied Jammu and Kashmir,” he said.
The resolution denounced India’s suspension of the decades-old Indus Waters Treaty and reaffirmed Pakistan’s support for the Kashmiri people’s right to self-determination.
It also accused India of waging a “mala fide campaign” to malign Pakistan.
“The country’s sovereignty, security and interests demand that India should be held accountable for its involvement in different acts of terrorism and targeted assassinations on the soil of other countries, including Pakistan,” Dar continued.
He also reaffirmed Pakistan’s “unwavering moral, political and diplomatic support for and commitment to the Kashmiri people’s just struggle for realization of their inalienable right to self determination.”


Detained Pakistan rights activist Dr. Mahrang Baloch launches hunger strike

Updated 47 min 50 sec ago
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Detained Pakistan rights activist Dr. Mahrang Baloch launches hunger strike

  • Baloch, 32, was arrested last month on charges of terrorism, sedition and murder
  • Dozen UN experts called on Pakistan in March to immediately release Baloch rights defenders

QUETTA: Detained activist Dr. Mahrang Baloch, one of the leading campaigners for Pakistan’s Baloch minority, has launched a hunger strike along with other detainees, her sister told AFP on Friday.
Mahrang Baloch, 32, was arrested last month on charges of terrorism, sedition and murder.
In her native Balochistan, an impoverished province that borders Afghanistan and Iran, security forces are battling a growing insurgency.
Rights groups say the violence has been countered with a severe crackdown that has swept up innocent people. Authorities deny heavyhandedness. 
Mahrang’s hunger strike “is aimed at denouncing the misconduct of the police and the failure of the justice system to protect... prisoners,” her younger sister, Nadia Baloch, said.
Nadia said the hunger strike was launched on Thursday after the attempted “abduction” of one of the Baloch detainees.
Mahrang’s organization, the Baloch Yakjehti Committee (BYC), said the inmate was beaten by security officials and taken from the prison to an unknown location.
A security official said the detainee was moved to another prison and denied any mistreatment.
BYC said four other detained Baloch activists have joined the hunger strike.
“All of them are peaceful political workers, imprisoned for raising their voices... Their only ‘crime’ is organizing peacefully in an environment saturated with state terror and violence,” the group said.
Activists say in the crackdown against militancy in the region authorities have harassed and carried out extrajudicial killings of Baloch civilians.
Pakistani authorities reject the “baseless allegations.”
A dozen UN experts called on Pakistan in March to immediately release Baloch rights defenders, including Mahrang, and to end the repression of their peaceful protests.
UN special rapporteur for human rights defenders Mary Lawlor said she was “disturbed by reports of further mistreatment in prison.”
The judiciary has declined to rule on Mahrang’s detention, effectively halting any appeal and placing the matter solely in the hands of the provincial government.
Insurgents in Balochistan accuse outsiders of plundering the province’s rich natural resources and launched a dramatic train siege in March, during which officials said about 60 people were killed.


Pakistan joins Muslim world in sending condolences ahead of Pope’s funeral on Saturday

Updated 25 April 2025
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Pakistan joins Muslim world in sending condolences ahead of Pope’s funeral on Saturday

  • Over 128,000 people have already paid last respects to Francis, whose coffin will be closed at 1800 GMT in ceremony attended by senior cardinals
  • Francis will be interred in the ground, his simple tomb marked with just one word: Franciscus, people will be able to visit the tomb from Sunday morning

ISLAMABAD: Pakistan joined the Muslim world in sending condolences as the Vatican made final preparations Friday for Pope Francis’s funeral and the last of the huge crowds of mourners filed through St. Peter’s Basilica to view his open coffin.
Over 128,000 people have already paid their last respects to Francis, whose coffin will be closed at 8:00pm (1800 GMT) in a ceremony attended by senior cardinals.
Many of the 50 heads of state and 10 monarchs attending Saturday’s ceremony in St. Peter’s Square, including US President Donald Trump and Ukrainian leader Volodymyr Zelensky, are expected to arrive later Friday in Rome.
“Pakistan conveys its heartfelt condolences on the passing of His Holiness, Pope Francis, a revered spiritual figure and a worldwide advocate for peace, interfaith dialogue and compassion,” the foreign office said. 
“His Holiness demonstrated unwavering commitment to fostering unity among world religions, advocating for the oppressed and promoting the inherent dignity of all humankind. Pakistan deeply values his tireless efforts to enhance mutual respect and understanding among diverse cultures and faiths.”
The foreign office said the pope’s legacy was marked by “profound humility, selfless service and a unifying vision for humanity,” which would serve as an inspiration for generations to come. 
“At this moment of profound sorrow, Pakistan stands in solidarity with our Catholic brothers and sisters worldwide and with all those touched by the extraordinary life of service.”
Italian and Vatican authorities have placed the area around St. Peter’s under tight security with drones blocked, snipers on roofs and fighter jets on standby. Further checkpoints will be activated on Friday night, police said.
Vast crowds of people on Friday morning packed Via della Conciliazione, the wide avenue leading to the Vatican, for the third and final day of the pope’s lying-in-state.
For a second night in a row, the Vatican kept St. Peter’s open past the scheduled hours to accommodate the queues, only closing the doors between 2:30am (0030 GMT) and 5:40am Friday.
Cardinal Kevin Farrell, Camerlengo of the Holy Roman Church, will preside at the Rite of Sealing of the Coffin of the late Pope Francis on Friday, April 25, at 8:00 PM, ahead of the papal funeral on Saturday morning.
The Catholic Church’s first Latin American pope died on Monday aged 88, less than a month after spending weeks in hospital with severe pneumonia.
The Argentine pontiff, who had long suffered failing health, defied doctors’ orders by appearing at Easter, the most important moment in the Catholic calendar.
It was his last public appearance.
Condolences have flooded in from around the world for the Jesuit, an energetic reformer who championed those on the fringes of society in his 12 years as head of the world’s 1.4 billion Catholics.
He used his last speech to rail against those who stir up “contempt... toward the vulnerable, the marginalized, and migrants.”
After the funeral, Francis’s coffin will be driven at a walking pace to be buried at his favorite church, Rome’s papal basilica of Santa Maria Maggiore.
The hearse will pass down Rome’s Fori Imperiali – where the city’s ancient temples lie – and past the Colosseum, according to officials.
Big screens will be set up along the route on which to watch the ceremony, Interior Minister Matteo Piantedosi said.
Francis will be interred in the ground, his simple tomb marked with just one word: Franciscus.
People will be able to visit the tomb from Sunday morning, as all eyes turn to the process of choosing Francis’s successor.
With inputs from AP


Families heartbroken as Pakistan closes airspace for Indian planes, land border shut

Updated 6 min 30 sec ago
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Families heartbroken as Pakistan closes airspace for Indian planes, land border shut

  • Militant attack in Indian-administered Kashmir has triggered diplomatic crisis between Islamabad and New Delhi
  • Diplomatic relations between Pakistan and India were weak even before the latest measures were announced

KARACHI: A 79-year-old Pakistani man, Ali Hasan Baqai, lamented about not being able to meet his siblings living in India as he sat with his wife and grandchildren at his house in Pakistan’s Karachi, hours after Pakistan closed its air space for Indian airlines on Thursday.
The move came in retaliation to a raft of actions by India after a deadly militant attack on tourists in Indian-administered Kashmir that New Delhi says Pakistan is involved in. Pakistani officials have rejected the accusations.
The latest diplomatic crisis was triggered by the killing of 26 men at a popular tourist destination in Indian-administered Kashmir on Tuesday, in the worst attack on civilians since the 2008 Mumbai shootings. The tit-for-tat announcements took relations between the nuclear-armed neighbors, who have fought three wars, to the lowest level in years.
Whenever relations deteriorate between Pakistan and India, elderly Baqai is besieged with a feeling of longing for his siblings and his birthplace on the other side of the border with India.
“I was planning to visit India. My sisters there were also planning to travel to Pakistan. But all of a sudden this attack happened. We could not even think of it. The situation was absolutely normal but suddenly the situation turned bad,” Baqai told Reuters Television.
Ali was born in 1946 in Delhi, India, a year before the partition of the subcontinent in 1947. He was last able to visit Delhi in 2014. Two of his sisters, along with his mother, passed away in the subsequent years. His three brothers died in India last year.
“If we don’t get a chance and the borders are closed for a long time, the only way left is we go to Dubai and meet each other there,” he said.
“You can’t meet your relatives. We can neither go there, nor can they come. It has become a mockery now. There is no hope left.”