ISLAMABAD: Pakistan’s tax-to-GDP ratio rose to 10.8% in the second quarter of the 2024-25 fiscal year, a statement from the Senate Standing Committee on Finance and Revenue said on Thursday, below the target of 13.6% agreed with the International Monetary Fund (IMF) when it approved a $7 billion bailout loan for the cash-strapped country last year.
The South Asian nation is navigating a challenging economic recovery path buttressed by the 37-month loan program that comes with tough measures especially on the taxation front, such as broadening the tax base to include previously undertaxed sectors such as agriculture, industrialists, and developers, abolishing exemptions and bringing the retail, agriculture, and export sectors into the normal income tax regime and imposing new taxes on the construction and sale of buildings and plots, and on milk and lubricating oil.
The bailout has also called for increasing the tax rate on farm income, continuing fiscal consolidation to reduce the deficit and improve fiscal discipline, improving tax administration and compliance, strengthening federal-provincial institutional arrangements and improving public investment management.
“The tax-to-GDP ratio has risen to 10.8% in the second quarter [of FY24-25], up from 9.5% in the first quarter, although it remains below the IMF-agreed target of 13.6% by the end of the program,” said a press release after the Senate Standing Committee on Finance and Revenue met on Thursday. “By comparison, India’s tax-to-GDP ratio stands at 18%.”
During the meeting, the committee was briefed on Pakistan’s current revenue shortfall of Rs384 billion for the first half of the fiscal year. The FBR collected Rs5,624 billion in taxes, falling short of the targeted Rs6,008 billion.
Senator Saleem Mandviwala, the chair of the committee, expressed concerns over the Federal Bureau of Revenue’s handling of sales tax collection.
Finance Minister Muhammad Aurangzeb responded by highlighting ongoing reforms, including a move to simplify income tax forms for salaried individuals and a push for transparency in tax collection through technological innovations.
Aurangzeb also discussed the government’s intention to separate tax policy from FBR operations in the next financial year, aiming to ease the burden on the salaried class.
“We are taking steps to keep the tax form simple and easy,” he added.
The committee also stressed the need for reforms to reduce the administrative burden on taxpayers while ensuring that tax collection remained “efficient and fair.”
The possibility of converting certain taxes into a carbon tax, a proposal raised by Senator Sherry Rahman, was also discussed.
“While the finance minister acknowledged the World Bank’s 10-year $20 billion Country Partnership Framework, which includes climate and carbon concerns, some members, including Senator Farooq H. Naik, raised concerns about the impact of a carbon tax on inflation and its effect on the poor,” the statement said.
Under the IMF deal, the highest effective tax rate on farm income can rise to as much as 45% from the current 15%. It will be implemented from this year, a move that was termed “unprecedented” by brokerage and investment banking firm JS Global at the time the loan was approved last year.
“These changes could contribute to inflation, particularly in food prices, affecting consumers nationwide,” said Ghasharib Shaokat, head of product at Pakistan Agriculture Research, adding that larger farmers will be affected more.
Inflation averaged close to 30% in FY23 and 23.4% in FY24, which ended on June 30. The consumer inflation rate slowed to 4.1% year on year in December, the lowest in more than 6.5 years.
Prime Minister Shehbaz Sharif’s government is based on a weak coalition and faces political pressure from the party of popular jailed opposition leader, former premier Imran Khan.
But Sharif says his government is committed to the tough but unavoidable reforms mandated by the IMF.
Pakistan has been struggling with boom-and-bust cycles for decades, leading to 22 IMF bailouts since 1958.
Pakistan tax-to-GDP ratio rises 10.8% in FY25 second quarter, below IMF target
https://arab.news/jcu23
Pakistan tax-to-GDP ratio rises 10.8% in FY25 second quarter, below IMF target
- Pakistan navigating challenging economic recovery path buttressed by $7 billion IMF program that comes with tough measures
- Senate Standing Committee of Revenue expresses concerns over Federal Bureau of Revenue’s handling of sales tax collection
Trump nominee for South Asia secretary backs Pakistan security cooperation ‘where beneficial for US’
Trump nominee for South Asia secretary backs Pakistan security cooperation ‘where beneficial for US’
- Paul Kapur says will continue to promote “longstanding US security interests with India and Pakistan”
- Kapur is professor at the US Naval Postgraduate School, visiting faculty member at Hoover Institution
ISLAMABAD: Paul Kapur, President Donald Trump’s nominee to be assistant secretary of state for South Asian affairs, said this week he would pursue security cooperation with Pakistan “where beneficial to US interests.”
Kapur was speaking during a confirmation hearing before the US Senate on Tuesday.
“On Pakistan, if confirmed, I will pursue security cooperation where beneficial to US interests, while seeking opportunities for bilateral collaboration in trade and investment,” Kapur said in his testimony.
“South Asia recently avoided a costly conflict, with the [US] Vice President and Secretary [of State Marco] Rubio intensely engaged on the issue. If confirmed, I will continue to promote longstanding US security interests with India and Pakistan through the pursuit of peace and stability, and the fight against terrorism.”
Kapur is, as of 2025, a professor at the US Naval Postgraduate School. He is a visiting faculty member at the Hoover Institution and has taught at Claremont McKenna College. He was also a visiting professor at Stanford University.
In 2025, Kapur was nominated as the Assistant Secretary of State for South and Central Asian Affairs by the second Trump administration, succeeding Donald Lu.
Pakistani observers are carefully watching Kapur’s appointment as he wrote in his book ‘Jihad as Grand Strategy’ that jihad was a major part of Pakistan’s grand strategy, and not just a “political instrument” it used. He has claimed that the utilization of jihad by Pakistan is an intentional government strategy.
US warns against attending UN conference on Israel-Palestinian two-state solution
- Two close allies France and Saudi Arabia are co-hosting the gathering next week in New York
- It aims to lay out parameters for roadmap to Palestinian state while ensuring Israel’s security
PARIS/WASHINGTON: US President Donald Trump’s administration is discouraging governments around the world from attending a UN conference next week on a possible two-state solution between Israel and the Palestinians, according to a US cable seen by Reuters.
The diplomatic demarche, sent on Tuesday, says countries that take “anti-Israel actions” following the conference will be viewed as acting in opposition to US foreign policy interests and could face diplomatic consequences from Washington.
The demarche, which was not previously reported, runs squarely against the diplomacy of two close allies France and Saudi Arabia, who are co-hosting the gathering next week in New York that aims to lay out the parameters for a roadmap to a Palestinian state, while ensuring Israel’s security.
“We are urging governments not to participate in the conference, which we view as counterproductive to ongoing, lifesaving efforts to end the war in Gaza and free hostages,” read the cable.
President Emmanuel Macron has suggested France could recognize a Palestinian state in Israeli-occupied territory at the conference.
French officials say they have been working to avoid a clash with the US, Israel’s staunchest major ally.
“The United States opposes any steps that would unilaterally recognize a conjectural Palestinian state, which adds significant legal and political obstacles to the eventual resolution of the conflict and could coerce Israel during a war, thereby supporting its enemies,” the cable read.
This week Britain and Canada, also G7 allies of the United States, were joined by other countries in placing sanctions on two Israeli far-right government ministers to pressure Prime Minister Benjamin Netanyahu to bring the Gaza war to an end.
“The United States opposes the implied support of the conference for potential actions including boycotts and sanctions on Israel as well as other punitive measures,” the cable read.
Israel has repeatedly criticized the conference, saying it rewards Hamas for the Oct. 7, 2023 attack on Israel that triggered the latest Gaza war, and it has lobbied France against recognizing a Palestinian state.
The US State Department and the French Foreign Ministry did not immediately respond to requests for comment.
US CENTCOM chief calls Pakistan ‘phenomenal partner’ in ongoing counterterrorism fight
- Pakistan and the United States have a long, if at times turbulent, history of counterterrorism cooperation
- Pakistani officials last year arrested and extradited a Daesh militant accused of planning 2021 bombing in Kabul
KARACHI: The head of United States Central Command (CENTCOM), General Michael Kurilla, this week praised Pakistan as a “phenomenal partner” in counterterrorism efforts, citing continued operations against militant groups and active intelligence-sharing between the two countries.
Pakistan and the United States have a long, if at times turbulent, history of counterterrorism cooperation dating back to the aftermath of the September 11, 2001, attacks. Islamabad was a key partner during the US-led war in Afghanistan, and over the years has captured and handed over numerous Al-Qaeda operatives to US authorities.
In a more recent high-profile case, Pakistani officials last year arrested and extradited a Daesh militant accused of planning the 2021 Abbey Gate bombing in Kabul, which killed 13 American service members and more than 160 Afghan civilians during the US military withdrawal.
“They’re in an active counter-terrorism fight right now and they have been a phenomenal partner in the counter-terrorism world,” Kurilla said during a testimony before the House Armed Services Committee in Washington on Tuesday.
Kurilla pointed to recent Pakistani operations targeting Daesh (ISIS-Khorasan), particularly in the tribal areas bordering Afghanistan.
“Through a phenomenal partnership with Pakistan, they have gone after Daesh Khorasan (Daesh) killing dozens of them through a relationship we have with them providing intelligence. They have captured at least five Daesh Khorasan (Daesh) high value individuals,” he said.
“So, we are seeing Pakistan with limited intelligence that provided them go after them using their means to do that and we’re seeing an effect on Daesh (Daesh).”
Kurtis added that both Pakistan and the Afghan Taliban were conducting parallel operations against Daesh along the border.
Kurilla also noted the close personal coordination between military leaders, recalling that Pakistan’s army chief had informed him directly of a major capture.
“Field Marshal Asim Munir called me to tell me they had captured one of the Daesh-K individuals,” he said.
While Pak-Us relations have often been strained by mutual mistrust — particularly over drone strikes, militant sanctuaries, and geopolitical alignment — security cooperation between the two militaries has persisted, especially in the intelligence domain.
Pakistan and the United States reaffirmed their commitment to counterterrorism cooperation during a bilateral dialogue held in Washington in May. The talks focused on threats from groups such as the Tehreek-e-Taliban Pakistan (TTP) and Daesh, both of which remain active in the region.
Another round of counterterrorism talks is scheduled to take place later this month between Islamabad and Washington as part of broader efforts to rebuild ties and coordinate on shared security priorities.
US officials have increasingly acknowledged Pakistan’s role in containing regional terrorist threats, even as Islamabad faces internal challenges from a resurgent TTP and growing political and economic instability.
Newlyweds die by suicide in Pakistan after family unable to arrange honeymoon funding — police
- Police say factory worker Sajjad Ali, wife Fauzia Bibi jumped in front of train after brother could not arrange funds to pay for honeymoon
- Brother Fahad says unaware of reasons for suicide, found out about incident from locals who reported deaths at nearby railway station
KARACHI: A newlywed couple in the Pakistani city of Faisalabad died by suicide this week from jumping in front of a moving train after their family could not arrange funds for their honeymoon, police said, while the man’s family said they did not know the reason why the duo decided to end their lives.
Station House Officer Mazhar Irfan told Arab News the couple, identified as factory worker Sajjad Ali and his wife Fauzia Bibi, had married four months ago but could not afford a honeymoon trip to the hill station town of Murree.
“Ali, a factory worker, had asked his elder brother Fahad for money for the trip. Fahad… couldn’t help,” Irfan said, adding that the couple then went to the railway tracks near the city’s Gatti Station, from where Ali called his brother to say they were going to take their own lives.
“Then they jumped in front of the train.”
The incident occurred around 5:45 a.m. near Nishatabad Bridge on Tuesday, when the Badar Express traveling from Faisalabad to Lahore struck the pair, according to Railways Police spokesperson Kanwar Umair Sajid.
However, Fahad, the older brother of Ali, said he was unaware of the reasons for the couple’s actions.
“I don’t know why they committed suicide… I only found out when people from the area told me someone had died near the railway station,” Fahad said, adding that he was shocked to identify the bodies as his brother and sister-in-law.
The investigation has been closed at the family’s request, Irfan, the SHO, said.
Suicide remains deeply taboo in Pakistan, where mental health services are limited. Official statistics are scarce, but estimates suggest rates may be underreported.
Citing an analysis of newspaper reports, around 2,295 suicides occurred over 2019-2020, with 14.1 percent linked to financial problems. According to Dawn, the suicide rate rose from 7.3 per 100,000 in 2019 to 9.8 in 2022.
Experts link stealth financial pressure and social stigma to increased mental health suffering across households. Psychiatrists say financial hardship is among the most common suicide stressors for young people in low-income communities in Pakistan.
With few mental health resources, just one psychiatrist per roughly 500,000 people and less than 1 percent of health budgets devoted to mental care, Pakistan struggles to support those in crisis.
Pakistan says won’t be baited into ‘war theatrics,’ warns India against Indus Treaty violation
- Pakistani delegation says India threatening missile strikes “not display of strength but dangerous sign of regional instability”
- Weeks after worst military confrontation in decades, India and Pakistan have dispatched delegations to press their cases in US, UK
KARACHI: The head of an official delegation visiting world capitals to present Islamabad’s position following a recent military standoff with New Delhi on Wednesday accused Indian external affairs minister S. Jaishankar of behaving like a “warmonger, not a diplomat” but said Pakistan would not be baited into “war theatrics.”
Speaking at a press conference in London, former Pakistani foreign minister Bilawal Bhutto Zardari, who is heading the high-level delegation lobbying Western governments, rejected what he called “recycled allegations” from New Delhi about Islamabad’s role in cross-border terrorism and warned that India’s threats to stop Pakistan’s flow of river water could escalate into an open conflict.
Speaking in Brussels on Tuesday, the Indian foreign minister had warned the West that Pakistan-sponsored terrorism would “eventually come back to haunt you.”
“Mr. Jaishankar speaks like a warmonger and not a diplomat. If he believes that threatening nuclear war is diplomacy, then India’s problem isn’t Pakistan, it’s extremism inside its own cabinet,” Bhutto Zardari said. “Threatening missile strikes and boasting about escalation is not a display of strength. It’s a dangerous sign of regional instability.”
He also mocked India’s claim that Pakistan was behind a April 22 militant attack in Indian-administered Kashmir that triggered a four-day military confrontation in May. Pakistan has denied the accusations and demanded India present evidence.
“If Jaishankar is so enamored by Google images, I suggest he Google Abhinandan Chaiwala,” he said, referring to a 2019 dogfight after which Indian pilot Abhinandan Varthaman was captured and then released by Pakistan.
“India knows that Pakistan had nothing to do with this attack. This was indigenous terrorism within Indian-occupied Kashmir, a secure intelligence failure of the Indian government,” he added.
On water, Bhutto Zardari issued a stern warning against what Islamabad described as India’s “weaponization” of shared rivers under the 1960 Indus Waters Treaty, brokered by the World Bank.
After the April 22 attack, India had announced it was unilaterally terminating the treaty and would halt Pakistan’s waters. The agreement had long been considered a rare pillar of cooperation between the two sides.
“If India actually carries out this threat, then Pakistan has already said that this declaration will be a war,” Bhutto Zardari said.
“If we want to create an environment for dialogue, where we can talk about the issue of Kashmir or any other issue, then it is very important to follow the old treaties.”
DIPLOMATIC BLITZ
Pakistan and India have launched competing diplomatic offensives across major capitals weeks after their worst military escalation in decades in which the two nuclear-armed nations exchanged missile, drone, and artillery fire until the United States and other allies brokered a ceasefire on May 10.
Bhutto Zardari’s delegation is currently in London after visiting the United States and is scheduled to travel onwards to Brussels. Indian opposition MP and former UN under-secretary Shashi Tharoor is leading a parallel outreach effort for New Delhi, presenting India’s case that Kashmir is a domestic matter and accusing Pakistan of supporting terrorism — a charge Islamabad denies.
Earlier in London, Bhutto Zardari met with senior British diplomats and UK-based Kashmiri leaders, and accused India of violating international agreements, including the Indus Waters Treaty.
“The Jammu & Kashmir dispute remains the unfinished agenda of the United Nations and the unhealed wound of Partition,” he wrote in a post on X. “In all my interactions, Kashmir was central — its people’s inalienable right to self-determination under UNSC resolutions must be upheld.”
He also met with Christian Turner, former British High Commissioner to Pakistan and incoming UK Permanent Representative to the United Nations.
“Welcomed the UK’s emphasis on diplomacy and dialogue, and encouraged its continued, constructive role in supporting de-escalation and encouraging dialogue for resolution of the Jammu & Kashmir dispute, the unfinished agenda of Partition and British legacy,” Bhutto Zardari said after the meeting.
As both governments build their respective cases ahead of a high-level UN session on South Asia later this month, Pakistan has framed its position as one of restraint and diplomacy.
“We want peace, stability, and regional integration,” Bhutto Zardari said at the London press meet.
“Pakistan won’t be baited into war theatrics. We will defend ourselves if attacked, but we do not crave conflict.”
