KARACHI: Federal Minister for Finance and Revenue Muhammad Aurangzeb revealed on Thursday only 14 percent of companies in Pakistan were registered for sales tax, leading to an estimated loss of Rs3.4 trillion ($12.2 billion) due to tax evasion, highlighting significant compliance and revenue generation challenges in the country.
Pakistan’s narrow tax base and persistent issue of tax evasion have continuously contributed to insufficient revenue collection for the fragile national economy. This shortfall exacerbates the government’s reliance on running high fiscal deficits, often financed through domestic and international borrowing, which further increases the nation’s debt burden.
Last month, the authorities prepared a plan to revamp the Federal Board of Revenue’s (FBR) tax collection system, with the help of economic and technological experts, following a detailed analysis of tax collection patterns over the past 25 years.
The government has also decided to fully digitalize the tax system to prevent leakages, even as a large segment of the national economy remains undocumented.
“Only 14 percent of the companies are registered for sales tax,” the minister said in a televised news briefing in Islamabad. “I will not delve into the consequences of non-registration as I have already spoken about it earlier.”
In his media talk on the “war on tax fraud” alongside FBR Chairman Rashid Mahmood Langrial, he said the overall tax evasion in Pakistan amounted to approximately Rs7 trillion ($25 billion) of which income tax evasion was around Rs1.3 trillion ($4.6 billion).
Aurangzeb said tax fraud could be divided into many categories with the first and most important being the misreporting of turnover and input claims. He explained that companies involved in such malpractices claimed a high ratio of input tax so that tax payments could be “suppressed and mitigated.”
He highlighted the importance of being part of a tax regime which was “adaptable and fair” where all segments of society and classes play their role. He said data analytics were being used to “plug leakages” in tax collection to ease out the burden inflicted on lower classes.
Aurangzeb said it was imperative to raise the tax-to-GDP ratio to 13-13.5 percent so that Pakistan could become a sustainable country going in the right direction with strong remittances, exports, upgraded credit ratings and a decreased policy rate due to declining inflation that also brought the lending rates down.
He added that the country could not afford to have any kind of “leakage” in terms of tax collection anymore. He gave examples of businesses in different sectors and how they misrepresented data to evade taxes.
The finance minister said 19 businesses in the cement sector that represented 100 percent of total reported sales owed around Rs18 billion ($64.3 million) to the government. Similarly, he added that the shortfall in the beverages sector due to tax evasion amounted to Rs15 billion ($53.96 million) where 16 businesses represented almost 100 percent of the total sales.
Talking about the textile sector, the finance minister said 28 weaving businesses represented 80 percent of the total reported sales with tax evasion of up to Rs18 billion ($64.3 million).
Meanwhile, the FBR chairman said the businesses involved in tax evasion were the same ones whose owners would hold meetings with government officials and present plans on how to curb tax evasion.
“There is not a bigger fraud being conducted in this country than the input adjustment system,” he said.
“The real appeal today is to professional classes who work as chief financial officers or chief executive officers. They are not the beneficiaries of the fraud amounting to billions of rupees but their signatures are being used which is a criminal act that will have criminal consequences.”
Langrial said the FBR will take action against such people and arrest them after due legal process. He urged every company’s management to not sign the upcoming sales tax return due on October 15.
“There will be no forgiveness this time,” he said.
Finance minister says only 14% of companies registered for sales tax in Pakistan
https://arab.news/6gv83
Finance minister says only 14% of companies registered for sales tax in Pakistan
- Muhammad Aurangzeb says sales tax evasion amounts to an estimated $12.2 billion
- The government says it will act against companies misreporting turnover, input claims
Pakistan says not in contact with new Syrian leadership, supports efforts to uphold country’s unity
- Pakistan believes Syria’s future should correspond to aspirations of the Syrian people, says foreign office
- Opposition forces in Syria ousted former president Bashar Assad in December after lightening offensives
ISLAMABAD: Pakistan’s foreign office spokesperson confirmed on Thursday that Islamabad has not established direct contact with the new Syrian leadership yet, reiterating that it supports a solution that upholds the unity and territorial integrity of the Middle Eastern state.
Opposition forces in Syria, after lightening military campaigns, seized the capital Damascus in December 2024 as then-President Bashar Assad fled to Russia. The Syrian leader was ousted after 13 years of civil war and more than 50 years of his family’s rule over the country.
Days after Assad was ousted, Pakistan said it supported an “inclusive political process” in Syria and believed that the Middle Eastern nation’s future should be determined by its people without foreign interference.
“I would not like to comment on specific details, but at this stage we do not have direct contacts with the leadership of Syria,” Foreign Office Spokesperson Mumtaz Zahra Baloch said in response to a question. “But our embassy remains active in Syria.”
She said the Pakistani government has consistently supported efforts aimed at finding a “comprehensive solution” to the situation in Syria.
“The solution that upholds the unity, sovereignty and territorial integrity of Syria,” Baloch said, adding that Pakistan believes the future of Syria should correspond to the aspirations of the Syrian people for security, stability and development.
“And Pakistan will continue to promote peace and stability in Syria,” she said.
Following Assad family’s ouster after over five decades in power, opposition forces’ leader Ahmad Al-Sharaa’s Hayat Tahrir Al-Sham (HTS) stamped its authority on the Syrian state with the same lightning speed it seized the country.
The HTS deployed police, installed an interim government and has been meeting foreign envoys, raising concerns over how inclusive Damascus’ new rulers intend to be.
The appointment of Mohammed Al-Bashir, the head of the regional government in HTS’ enclave of Idlib, as Syria’s new interim prime minister last month underlined the group’s status as the most powerful of the armed groups that battled for more than 13 years to end Assad’s iron-fisted rule.
Libya boat tragedy: Pakistan’s FIA issues Interpol red notices to 20 human traffickers
- Around 262 Pakistanis drowned when overcrowded vessel sank off Greec coastal town of Pylos
- State media says Pakistan arrested 144 people, among them 16 lawyers, in connection to boat tragedy
ISLAMABAD: Pakistan’s Federal Investigation Agency (FIA) has issued red notices through Interpol for 20 foreign-based human traffickers involved in the 2023 Libyan boat tragedy that claimed the lives of over 260 Pakistanis, state media said on Thursday.
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. It was one of the deadliest boat disasters ever recorded in the Mediterranean Sea.
Following the tragedy, the issue of illegal immigration to Europe gained significant attention in Pakistan, with Prime Minister Shehbaz Sharif ordering “intensified efforts” against human traffickers.
The incident highlighted the perilous journeys many migrants undertake, often driven by economic hardship, as young individuals seek better financial prospects by attempting dangerous crossings to Europe.
“The red notices were issued through Interpol for 20 foreign-based traffickers,” the Associated Press of Pakistan (APP) said. “FIA said the arrests of these agents were initiated with the assistance of global law enforcement agencies.”
It added that FIA had also begun blocking identity cards and bank accounts linked to human trafficking facilitators involved in the Libyan boat accident.
The state media said that at least 144 people, among them 16 lawyers, were arrested by the FIA in connection with the boat tragedy. The FIA said it has registered 197 cases and blacklisted the passports of 55 others involved in the incident.
APP said DG FIA Ahmad Ishaq Jahangir directed officers deputed at the airport to ensure strict surveillance and prevent suspects from fleeing abroad.
Several Pakistanis, in a bid to escape economic hardships at home, often undertake these illegal and dangerous journeys to enter Europe. The latest incident involving Pakistani passengers took place last month, on Dec. 19, when Pakistan’s mission in Greece confirmed that five Pakistanis had been killed in a migrant boat tragedy off the Greek island of Gavdos.
Subsequently, on Dec. 27, Pakistani authorities arrested a woman along with two other human smugglers.
Pakistani prosthetics startup launches AI-powered limb factory in Gaza to aid amputees
- Established in 2016, BIONIKS says its mobile factory is equipped with AI tools to design limbs
- Company says its initiative is part of its belief that technology has the power to transform lives
KARACHI: BIONIKS, a Karachi-based startup specializing in orthotics and prosthetics, has launched a mobile AI-powered limb factory in Gaza to provide customized prosthetic arms and legs to amputees in the conflict-stricken region, the company announced in its newsletter on Wednesday.
The company, established in 2016, announced the initiative as part of its commitment to creating an inclusive world by leveraging cutting-edge technology to transform lives.
The mobile factory is equipped with advanced artificial intelligence tools to design and produce prosthetic limbs, enabling on-site assistance in underserved areas.
“We believe technology has the power to transform lives,” BIONIKS said in a statement. “By taking advanced prosthetic solutions directly to those in need, we aim to restore independence, mobility, and dignity to individuals affected by conflict and hardship.”
The initiative comes as Gaza grapples with a dire humanitarian crisis since the beginning of Israel’s military campaign in October 2023. BIONIKS said it hoped the factory would act as a lifeline for amputees by providing accessible and innovative solutions in regions where resources are limited.
BIONIKS gained international attention in 2021 when it provided a multi-grip bionic arm to four-year-old Mohammed Sideeq, making him the youngest recipient of such a prosthetic limb.
The startup’s co-founder, Anas Niaz, said designing the arm for a child so young was unprecedented.
“No one in the world has ever made a bionic arm for such a young age,” Niaz told Arab News in 2021. “We knew this was nearly impossible, but Mohammed had high hopes to get a bionic arm.”
The lightweight and durable arm allowed Sideeq to resume daily activities, including playing and buttoning his shirt, showcasing BIONIKS’ commitment to blending innovation with functionality.
Deputy PM Ishaq Dar denies diplomatic isolation claims, highlights Pakistan’s global presence
- Dar says government’s approach was to increase Pakistan’s diplomatic footprint in the region
- A flurry of visits by foreign dignitaries to strengthen business ties marked the last year in Pakistan
ISLAMABAD: Deputy Prime Minister Ishaq Dar on Thursday dismissed claims that Pakistan was diplomatically isolated, emphasizing that the country remained fully engaged on all international platforms last year.
Dar had promised to prioritize economic diplomacy to bolster Pakistan’s international standing and attract much-needed foreign investment after taking office last year. He highlighted the government’s active external engagements, marked by a flurry of visits from foreign dignitaries as Pakistan sought sustainable growth and investment in key economic sectors.
Efforts have focused on strengthening business and investment ties with regional allies, including Russia, Central Asian states and Gulf nations, as the country navigates economic recovery after a prolonged crisis.
“Faced with the unprecedented challenges at the national, regional and global levels, our consistent and successful approach was to improve our diplomatic footprint, especially in the region,” the deputy prime minister said while addressing a news conference.
“You witnessed that in the past year, the perception or reality [of diplomatic isolation] has vanished by the grace of God,” he added. “Today, Pakistan is fully activated [diplomatically].”
He also mentioned Saudi Foreign Minister Prince Faisal bin Farhan’s visit to Pakistan last year, noting that all global issues were discussed during his meetings with Pakistani officials.
Dar spoke about the late Iranian President Ebrahim Raisi, who visited the country last year to strengthen bilateral ties with Pakistan amid surging tensions in the Middle East.
He recalled that Pakistan had been represented by Prime Minister Shehbaz Sharif at the World Economic Forum in Saudi Arabia last year, praising him for speaking openly against Israel for its war in Gaza.
Dar said Sharif’s visits to the Kingdom, the United Arab Emirates, Azerbaijan and Kazakhstan were aimed at promoting investment, adding that Pakistan expected about $29 billion in business and commerce from these countries.
The deputy prime minister noted that Pakistan was also active on the humanitarian front, pointing out it had sent 14 relief consignments to Gaza, nine to Lebanon and four to Syria in 2024.
Pakistan military pardons 19 convicted for May 9 riots ‘on humanitarian grounds’
- Last month, a military court sentenced 85 civilians to prison terms ranging from two to 10 years
- May 9 riots followed ex-PM Khan’s brief arrests and involved the targeting of military properties
ISLAMABAD: Pakistan’s military on Thursday announced it had accepted the mercy petitions of 19 convicts involved in the May 9, 2023, violence, granting remission of their punishments “purely on humanitarian grounds,” according to an official statement.
Last month, a military court sentenced 85 civilians to prison terms ranging from two to ten years for their roles in the riots, during which supporters of former Prime Minister Imran Khan were accused of attacking military facilities.
The violence, sparked by Khan’s brief arrest in a corruption case, saw hundreds storming military and government installations, including the torching of a top commander’s house.
The trials, held under the Pakistan Army Act, included convictions of two former military officers, Brig. (retired) Javed Akram and Captain (retired) Viqas Ahmed Mohsin, as well as Khan’s nephew, Hassan Khan Niazi.
The military had initiated trials for over 100 individuals following the violence.
“A total of 67 convicts have given their mercy petitions,” the military’s media wing, Inter-Services Public Relations (ISPR), said in its statement. “48 petitions have been processed to Courts of Appeal, while petitions of 19 convicts have been accepted purely on humanitarian grounds, in accordance with the law.”
“Mercy petitions of the remaining will be decided in due course of time, following the legal process,” it added.
The military shared a list of the individuals whose petitions had been approved, adding that they would be released after completing procedural formalities.
The trials and convictions raised concerns that Khan himself could face prosecution under the Pakistan Army Act, with charges including treason and inciting mutiny in the military.
The former premier, jailed for over a year, has denied these allegations and multiple other charges, describing them as politically motivated attempts to sideline him from power.
Khan, however, faces accusations of orchestrating the May 9 riots, a claim he has consistently rejected. He remains imprisoned in a high-security facility in Rawalpindi.
“The remission of punishments is a testament to the strength of the due process and fairness, which ensures that justice is served while also taking into account the principles of compassion and mercy,” the ISPR said.
It also noted the military had released 20 convicts last year in April on humanitarian grounds and in accordance with law.
