Pakistan

As the government prepares to unveil the FY2027 budget, economists are sounding the alarm over potential new financial burdens on the public. Experts warn that the upcoming fiscal consolidation strategy relies heavily on increasing indirect taxes and slashing vital subsidies. Skyrocketing Power Tariffs A Heavy Blow to Citizens This specific policy direction is highly likely to trigger massive increases in energy prices across the country. Consequently, everyday households and the fragile middle class will face severe, renewed inflationary pressures. Economists argue that the government is reverting to short-term, aggressive measures simply to bridge its persistent fiscal deficit. This approach heavily utilizes regressive indirect taxes and arbitrary non-tax revenues to generate fast state liquidity. A prime example is the Petroleum Development Levy (PDL), which has transformed into a pure revenue-generation tool. The state targets an astronomical collection of around Rs1.7 trillion through this levy alone in the upcoming cycle. Currently, standard consumers already pay well above the average electricity tariff of Rs33.4 per unit after added taxes. Alarmingly, built-in capacity payments to power producers account for more than Rs17 per unit of that total cost. System inefficiencies, massive transmission losses, and debt burdens continue to artificially inflate what citizens pay. Experts stress that the true affordability threshold for middle-class households sits much lower, around Rs25 to Rs30 per unit. Additionally, standard subsidy reforms may leave gaping holes in social safety nets for vulnerable populations. The Benazir Income Support Programme (BISP) might not fully cover all groups sliding into deep poverty.As a direct result, rising costs risk deepening energy poverty and could unfortunately encourage power theft in urban areas. True and sustainable fiscal consolidation must focus on broadening the tax base rather than punishing already compliant taxpayers.

KARACHI: Senior Vice President of the Karachi Chamber of Commerce and Industry (KCCI), Muhammad Raza has assumed the charge of Acting President, KCCI, with immediate effect. According to details, Rehan Hanif, President KCCI has proceeded abroad to attend Kunming Trade Fair in China along with Chairman Fairs, Exhibitions & Trade Delegation Subcommittee Imran Moiz. During his absence, Muhammad Raza will perform the duties and exercise the powers of the President. Upon assuming charge, Acting President KCCI Muhammad Raza reaffirmed his commitment to continue pursuing the Chamber’s agenda of protecting and promoting the interests of the business and industrial community. He emphasized that KCCI would maintain active engagement with government authorities and stakeholders on key economic, fiscal, trade, and industrial issues to ensure continuity and effectiveness in advocacy. He also assured KCCI members that all routine and strategic matters of the Chamber would be handled smoothly during this interim period, and ongoing initiatives would continue without interruption.

KARACHI: Pakistan SADC Chamber Trade Federation (PSCTF) has urged the federal government to undertake wide-ranging structural tax reforms in the FY2026-27 budget, advocating a shift from what it termed an “extractive revenue collection model” to a growth-oriented framework focused on investment, exports, industrial expansion and job creation. In a set of budget proposals submitted to the Ministry of Finance and the Federal Board of Revenue (FBR), the PSCTF said Pakistan’s economy continues to face deep-rooted structural challenges, including a low tax-to-GDP ratio, elevated energy costs, constrained industrial productivity and a widening trade deficit. SADC stands for Southern African Development Community. PSCTF’s Convener of Pakistan Chapter Syed Moizuddin shared with Business Recorder that among its key recommendations, the forum called for the restoration of the Final Tax Regime (FTR) for goods exporters, arguing that the current taxation framework has created liquidity pressures and increased compliance costs for export-oriented industries. It said a predictable tax regime would improve cash flows and enhance Pakistan’s export competitiveness in international markets. The PSCTF also proposed a legally binding mechanism requiring the FBR to process and disburse all valid export-related sales tax refunds within 30 to 45 days. Delayed refunds, it noted, continue to lock up billions of rupees in industrial working capital, undermining production and export growth. For improving Pakistan’s investment climate, the forum recommended a phased abolition of the Super Tax on corporations and a gradual reduction in the standard corporate income tax rate from 29 percent to 25 percent over the coming years. Such measures, it argued, would encourage business expansion, attract foreign direct investment and improve regional competitiveness. For the salaried class, the proposals seek an increase in the annual tax-exempt income threshold from Rs600,000 to Rs1.2 million, citing inflationary pressures and rising living costs that have eroded disposable incomes and accelerated the migration of skilled professionals abroad. Syed Moizuddin said the forum has emphasized long-term policy certainty for the information technology sector by maintaining the concessional tax regime for IT and IT-enabled services exports, describing predictability as essential for sustaining growth in one of Pakistan’s fastest-growing export industries. To broaden the tax base, the PSCTF advocated greater use of digital technology and data analytics, including cross-referencing banking, property, utility and travel records to identify undocumented income and bring non-filers into the formal economy. It also urged stricter enforcement of point-of-sale integration across the retail sector. In support of industrial modernization, the proposals recommend zero customs duty and sales tax on imports of non-locally manufactured industrial machinery, automation equipment and renewable energy technologies, measures the forum says would boost productivity and accelerate Pakistan’s transition toward cleaner energy sources. The PSCTF also proposed the introduction of a National Taxpayer Compliance Rating System, under which compliant taxpayers would receive incentives such as faster refunds, fewer audits and lower withholding tax rates. Additional tax credits were suggested for companies generating employment and investing in university-led research, innovation and workforce development. PSCTF’s Convener pleaded that while some measures may have a limited short-term fiscal impact, they would generate substantial long-term benefits by expanding the tax base, increasing exports, encouraging investment, creating jobs and raising Pakistan’s tax-to-GDP ratio. The recommendations come as the government prepares to unveil the federal budget for FY2026-27 amid efforts to balance fiscal consolidation with economic growth, export promotion and private-sector development.

Karachi 08 June 2026: The Beijing Jingwa Agricultural Science and Technology Innovation Center (Jingwa Center) and Pakistan’s Iftekhar Ahmed Food & Beverages Pvt. Ltd. have signed a Memorandum of Understanding (MoU) to develop and introduce high-quality tomato varieties tailored for industrial processing in Pakistan. The agreement was signed during the Pakistan-China Information Technology, Telecom, Battery Energy Storage System, and Agriculture B2B Investment Conference held in Hangzhou as part of Prime Minister Shehbaz Sharif’s official visit to China. The MoU was signed by Waheed Ahmed, Director Marketing of Iftekhar Ahmed Food & Beverages Pvt. Ltd., and Zhao Guodong, Director Business Development of the Jingwa Center. Under the agreement, the Chinese research institution will provide new tomato varieties specifically selected for industrial use, featuring high Brix levels, strong solids content, and superior pulp yield, making them suitable for the production of high-quality tomato paste and puree. The collaboration will begin with a research and development phase in Sindh, where six to seven candidate tomato varieties will undergo comprehensive field and greenhouse trials. Chinese and Pakistani experts will jointly evaluate the varieties for adaptability to local climatic conditions, soil characteristics, cultivation practices, and disease pressures. In addition to supplying seed varieties, the Jingwa Center will transfer advanced agricultural technologies, modern cultivation techniques, and technical expertise aimed at improving tomato productivity and quality. The partnership also seeks to promote year-round tomato production through controlled environment agriculture, helping ensure stable yields and consistent quality. Following successful trials and adaptation, the most suitable varieties will be introduced for commercial cultivation and industrial processing in Pakistan, with continued technical support from the Chinese side. Commenting on the agreement, Waheed Ahmed, Director Marketing of Iftekhar Ahmed Food & Beverages Pvt. Ltd., said the collaboration with the Chinese research institution would play an important role in promoting research and development in Pakistan’s agriculture sector. He said the development and local cultivation of suitable industrial tomato varieties would help save foreign exchange currently spent on importing tomato paste, which amounts to approximately $1 million annually. In addition, the initiative is expected to boost Pakistan’s exports of value-added agricultural products. Waheed Ahmed further stated that the partnership could attract investments of up to $7 million in the local production of industrial tomato varieties. He added that the final selected seed variety would be registered in Pakistan and made available to farmers on a large scale, paving the way for wider adoption and significantly increasing tomato production in the country. Representatives of both organizations described the agreement as an important step toward strengthening agricultural cooperation between Pakistan and China and modernizing Pakistan’s tomato value chain. The partnership is expected to support Pakistan’s import substitution efforts, reduce dependence on imported tomato paste, enhance local processing capacity, and contribute to food security through the development of a sustainable and climate-resilient tomato production system in Sindh. Iftekhar Ahmed Food & Beverages Pvt. Ltd., operating under the 60-year legacy of Iftekhar Ahmed & Co. (IAC), is among Pakistan’s leading fruit and vegetable processing and export companies. The company exports products to more than 30 countries and operates Pakistan’s largest aseptic processing facility for fruit pulps, concentrates, and tomato paste, along with a 35,000-metric-ton cold storage network in Karachi and Sargodha.