Pakistan

FBR Tax Shortfall Widens to Rs684 Billion Amid Economic Pressures
Breaking News, Pakistan

FBR Tax Shortfall Widens to Rs684 Billion Amid Economic Pressures

The Federal Board of Revenue (FBR) tax shortfall has widened significantly, reaching Rs684 billion during the first 10 months of the current fiscal year, raising concerns over Pakistan’s revenue performance. According to reported data, Federal Board of Revenue collected Rs10,261 billion from July to April against a target of Rs10,945 billion, highlighting a substantial gap in tax collection. Revenue Targets Missed as Collection Slows The latest figures reveal that the FBR tax shortfall continues to grow as collection efforts fall behind expectations. In April 2026 alone, the FBR collected Rs956 billion against a target of Rs1,029 billion, resulting in a monthly shortfall of Rs73 billion. Officials acknowledged that the tax authority now faces mounting pressure to meet its revised annual target. To achieve the full-year goal of Rs13,979 billion, the FBR must collect an additional Rs3,718 billion in May and June—an ambitious target given the current pace of revenue generation. External Factors Deepen Fiscal Challenges Economic disruptions linked to the Gulf War have further aggravated the FBR tax shortfall. Officials noted that declining imports have led to a sharp drop in sales tax collection at the import stage, traditionally a major revenue source. At the same time, slowed economic activity has reduced overall taxable transactions, limiting income and sales tax inflows. An FBR official stated that both import contraction and reduced market activity have significantly constrained revenue growth in recent months. IMF Refuses to Revise Annual Target In light of the widening FBR tax shortfall, authorities approached the International Monetary Fund seeking a downward revision of the annual tax target. The FBR proposed reducing the target from Rs13,979 billion to around Rs13,400–13,500 billion. However, the IMF declined the request, maintaining strict fiscal targets as part of broader economic conditions tied to Pakistan’s financial programme. This decision has added further pressure on tax authorities to improve collection performance within a limited timeframe. Breakdown of Tax Collection Provisional data shows that the FBR tax shortfall persists despite contributions from multiple revenue streams. During the first 10 months: Income tax collection stood at Rs5,142 billionSales tax generated Rs3,825.5 billionFederal excise duty contributed Rs672.9 billionCustoms duty added Rs1,119.5 billion The total gross collection reached Rs10,760.6 billion. However, after issuing refunds amounting to Rs498.9 billion, the net collection remained Rs10,261.7 billion. Uncertainty Over Final Revenue Outcome Despite the widening FBR tax shortfall, officials indicated that achieving a collection between Rs13,000 billion and Rs13,200 billion by June could still be viewed as a reasonable outcome under current circumstances. However, meeting the original or even revised targets remains a major challenge. With only two months remaining in the fiscal year, the performance of key sectors, import trends, and enforcement measures will play a decisive role in determining the final revenue figures. The growing FBR tax shortfall underscores broader economic pressures facing Pakistan, as authorities struggle to balance fiscal discipline with slowing economic activity.

FMCG Industry Urges Expansion of Third Schedule GST to Improve Price Transparency
Pakistan

FMCG Industry Urges Expansion of Third Schedule GST to Improve Price Transparency

Pakistan’s fast-moving consumer goods (FMCG) sector has called on the government to expand the scope of the Third Schedule GST, arguing that the move can significantly improve price transparency, reduce tax evasion, and simplify the country’s complex taxation system without introducing any new taxes. Tax Collection Method Proposal The proposal centers on bringing more essential consumer goods under the Third Schedule GST framework. These products include cooking oil, milk, dairy items, infant formula, flour, noodles, frozen foods, and condiments. While the tax rate will remain unchanged at 18 percent, the key difference lies in how the tax is collected. Under the Third Schedule, the full tax is collected upfront at the manufacturing stage rather than across multiple stages of the supply chain. Industry stakeholders stress that this is not an additional burden on consumers or businesses but a structural reform aimed at improving efficiency and compliance. Current System At present, the standard GST system involves multiple layers of taxation, from manufacturers to distributors and retailers. This multi-stage structure increases administrative complexity and creates opportunities for underreporting and tax leakages. The Federal Board of Revenue faces challenges in monitoring compliance across such a fragmented system. Industry representatives argue that practices like transfer pricing and undocumented discounts often distort the actual tax base, leading to revenue losses for the government. In contrast, the Third Schedule GST ensures that the entire tax liability is settled at the first point of supply. This simplifies enforcement and reduces the need for extensive monitoring at later stages of distribution. Existing Coverage and Proven Benefits Currently, more than Rs2.5 trillion worth of FMCG products already fall under the Third Schedule. These include beverages, tea, soaps, and personal care items. One of the most significant features of this system is the mandatory printing of retail prices on product packaging. This requirement creates a clear reference point for both regulators and consumers. It limits price manipulation and helps ensure that consumers pay the correct amount for goods. Industry leaders believe that extending the Third Schedule GST to additional essential items will replicate these benefits across a wider segment of the market. Undocumented Retail Sector The push for reform comes at a time when the government is struggling to document the retail sector. Despite imposing additional taxes, compliance remains low. Unregistered retailers currently face a 4 percent further tax, while non-filers are subject to a 2.5 percent advance income tax. However, industry estimates suggest that more than 80 percent of retailers in Pakistan remain undocumented. This highlights the limited effectiveness of current measures aimed at broadening the tax net. Additional Taxes Create Business Challenges FMCG companies argue that these additional taxes have produced unintended consequences. Instead of improving compliance, they have increased the financial burden on businesses. Manufacturers often absorb part of the extra taxes to maintain retailer margins and ensure product availability. This reduces profitability and limits the ability of companies to adjust prices in response to market conditions. Stakeholders believe that expanding the Third Schedule GST would eliminate the need for such additional taxes. By collecting the full tax at the manufacturing stage, the system would become more predictable and easier to manage. Consumer Protection Another major advantage of the proposed reform is improved consumer protection. Under the current system, companies provide price lists to retailers, but these are often not displayed or followed. As a result, consumers frequently face overcharging and inconsistent pricing. Authorities have issued notices in several cases where retailers charged higher prices than those recommended by manufacturers. This lack of uniformity undermines consumer trust and creates instability in the market. By mandating printed retail prices on packaging, the Third Schedule GST can address these issues effectively. Consumers would have clear visibility of prices, reducing the risk of exploitation at the retail level. Transparent and Efficient Taxation Industry stakeholders maintain that expanding the Third Schedule GST offers a practical solution to multiple challenges facing Pakistan’s taxation system. It simplifies compliance, reduces evasion, enhances transparency, and protects consumers without increasing the overall tax burden.

One Year Later, Pakistan Questions India’s Silence on Pahalgam Evidence
Politics

One Year Later, Pakistan Questions India’s Silence on Pahalgam Evidence

Pakistan has once again raised serious questions over the Pahalgam attack allegations, with Information Minister Attaullah Tarar stating that India has failed to provide credible evidence even a year after the deadly incident. Read More: https://theboardroompk.com/bingx-lists-space-themed-meme-coin-asteroid-shiba/ The April 22, 2025 attack in Pahalgam killed 26 people, most of them tourists. It marked one of the deadliest incidents in the disputed Himalayan region in over two decades. However, the aftermath of the attack continues to fuel diplomatic tensions between Islamabad and New Delhi. Pakistan Questions Lack of Evidence Speaking on the first anniversary of the incident, Tarar said India has not presented any solid proof to support its claims against Pakistan. He emphasized that the absence of evidence weakens New Delhi’s narrative regarding the Pahalgam attack allegations. He stated that India also rejected Pakistan’s offer to conduct a neutral and transparent investigation. According to him, this refusal raises serious concerns and casts doubt on the credibility of the accusations. Tarar argued that without a fair inquiry, assigning blame remains questionable. He added that the international community continues to seek answers from India regarding the incident. Claims of “False Flag Operation” The minister went further by suggesting that the attack may have been a “false flag operation.” He claimed that the handling of the situation reflected what he described as a flawed approach driven by political motives. Tarar asserted that such actions undermine regional stability. He also warned that Pakistan would respond firmly to any future actions that threaten its security. His remarks mark a continuation of Pakistan’s strong stance on the Pahalgam attack allegations, which it has consistently rejected since the incident occurred. Questions Over FIR and Security Lapses Tarar also highlighted procedural concerns surrounding the incident. He questioned how the First Information Report (FIR) was registered within just 10 minutes of the attack. He pointed out that such rapid documentation raises doubts about the transparency of the investigation. Additionally, he noted that several think tanks have questioned the lack of adequate security at the site. According to the minister, these issues further complicate the narrative around the Pahalgam attack allegations and demand a more thorough and impartial review. Pakistan Expresses Sympathy Despite the ongoing dispute, Tarar reiterated that Pakistan had expressed full sympathy for the victims of the attack. He emphasized that Pakistan itself has suffered heavily from terrorism over the years. He said the country understands the pain of such incidents and stands against all forms of terrorism. However, he stressed that accusations must be backed by evidence and proper investigation. Criticism of Indian Media and Institutions Tarar also criticized Indian media outlets, accusing them of spreading propaganda related to the Pahalgam attack allegations. He claimed that certain segments of the media amplified unverified claims without factual backing. He further alleged that Indian institutions have become politicized and are being used to shape narratives rather than present facts. According to him, such practices damage credibility on the global stage. Allegations of Transnational Activities The minister also raised concerns about what he described as India’s involvement in transnational incidents. He referred to reports of attacks on Sikh leaders abroad and claimed that such actions reflect a broader pattern. Tarar stated that Pakistan has evidence of Indian involvement in activities on its soil. He said Islamabad regularly shares this information with the international community. These claims add another layer to the ongoing tensions linked to the Pahalgam attack allegations and broader regional security concerns. Kashmir and Terrorism Debate Tarar also addressed the broader geopolitical context. He argued that India presents its internal issues as external threats, while treating international matters as domestic concerns. He specifically mentioned the Kashmir dispute, which remains a longstanding issue between the two countries. According to him, India’s approach complicates efforts to resolve regional conflicts. Warning Against Escalation The minister issued a strong warning against any potential escalation. He stated that Pakistan would respond swiftly and decisively to any “misadventure” that threatens its sovereignty. He reaffirmed the government’s commitment to national defense and security. At the same time, he emphasized Pakistan’s stated goal of promoting peace in the region. Global Perception and Diplomatic Impact Tarar concluded by claiming that India is facing increasing global scrutiny due to its policies. He argued that unanswered questions surrounding the Pahalgam attack allegations have affected its international standing. In contrast, he said Pakistan continues to advocate for peace and stability while addressing security challenges at home. As the anniversary of the Pahalgam attack passes, the lack of consensus and evidence continues to fuel debate. The issue remains unresolved, highlighting the fragile nature of relations between the two nuclear-armed neighbors.

Pakistan Govt Holds Petrol, Diesel Prices Steady for Late January 2026
Pakistan

Pakistan Govt Holds Petrol, Diesel Prices Steady for Late January 2026

The federal government of Pakistan has decided to maintain the current prices of major petroleum products unchanged for the second fortnight of January 2026, effective from January 16, 2026. This announcement came via an official notification from the Ministry of Energy (Petroleum Division) and the Finance Division on January 15, 2026, dashing earlier expectations of a potential reduction of up to Rs5-6 per litre due to softening global crude oil prices. Read More: https://theboardroompk.com/pakistan-national-shipping-corporation-fleet-expansion-strengthens-maritime-capacity/ Motor Spirit (petrol) will continue to sell at Rs253.17 per litre, while High-Speed Diesel (HSD) remains at Rs257.08 per litre. The decision reflects a balance between global market volatility, rupee-dollar exchange rate stability, and the government’s ongoing efforts to curb inflationary pressures on the economy and consumers. Reasons Behind the Stability Decision The primary factors influencing this hold include fluctuating international crude oil rates, which hovered around USD 60 per barrel recently, and domestic considerations such as high petroleum levies (Rs82.12 per litre on petrol and Rs77.91 on HSD, including the Climate Support Levy). Although global trends had hinted at possible cuts following reductions in the first half of January (petrol down Rs10.28 and diesel down Rs8.57), the government opted for stability to avoid revenue shortfalls and provide predictability for transport, agriculture, and industry sectors heavily reliant on fuel. Implications for Consumers and Economy This price freeze offers short-term relief by preventing any immediate hike in transportation and commodity costs, especially as diesel influences food supply chains and public transport fares. However, with persistent high levies contributing significantly to pump prices, many consumers expressed disappointment over missed opportunities for further reductions amid lower global oil benchmarks. Analysts note that fortnightly reviews will continue, with potential adjustments in the next cycle depending on crude trends and exchange rates. The move underscores the government’s cautious approach to fiscal management while navigating external volatilities.

Pakistan Signs Deal with Trump-Linked World Liberty Financial to Explore $1 Stablecoin for Cross-Border Payments
World

Pakistan Signs Deal with Trump-Linked World Liberty Financial to Explore $1 Stable coin for Cross-Border Payments

ISLAMABAD — Pakistan has entered into an agreement with SC Financial Technologies, an entity connected to World Liberty Financial (WLF)—the primary crypto venture associated with the family of U.S. President Donald Trump—to investigate the integration of WLF’s USD1 dollar-pegged stablecoin into regulated cross-border payment systems. Read More: https://theboardroompk.com/pakistan-china-sign-mou-to-boost-quantum-computing-research/ According to a source familiar with the arrangement reported by Reuters on January 14, 2026, the collaboration involves working with the State Bank of Pakistan to incorporate the stablecoin alongside the country’s emerging digital currency infrastructure. The deal, one of the earliest sovereign partnerships for WLF since its 2024 launch, aligns with Pakistan’s efforts to modernize remittances and digital finance amid a more crypto-friendly U.S. regulatory environment under Trump. An official announcement was anticipated later that day during a visit by WLF CEO Zach Witkoff to Islamabad. Focus on Remittances and Efficient Digital Payments Pakistan, which receives over $30 billion annually in remittances—a lifeline for its economy—aims to leverage stablecoins for faster, cheaper international transfers compared to traditional channels. The USD1 stablecoin, backed 1:1 by U.S. dollars and short-term Treasurys and available on multiple blockchains like Ethereum, Solana, and Tron, could reduce costs and settlement times for overseas workers sending funds home. The partnership builds on prior engagements, including a 2025 Letter of Intent between WLF and the Pakistan Crypto Council to advance blockchain and DeFi adoption. Geopolitical and Regulatory Implications The agreement highlights warming U.S.-Pakistan ties in the digital finance space and positions Pakistan as an early testing ground for private stablecoins in regulated settings. WLF has gained prominence through high-profile uses, such as Abu Dhabi’s MGX employing USD1 for a $2 billion Binance stake acquisition. Critics note potential risks around dollar dominance and regulatory oversight, but proponents see it as boosting Pakistan’s fintech profile and attracting global innovation. Neither Pakistan’s finance ministry nor central bank commented immediately, though the move reflects broader global interest in stablecoins for efficient, borderless payments.

First Panda Bond: Pakistan Plans to Raise $250 Million in Yuan Market
Pakistan

First Panda Bond: Pakistan Plans to Raise $250 Million in Yuan Market

Pakistan is set to issue its first-ever Panda bond in the coming weeks, as announced by Finance Minister Muhammad Aurangzeb on January 14, 2026. Speaking at a seminar organized by Nutshell Group titled “Resetting Pakistan’s Economic Direction,” the minister revealed that the country plans to tap into China’s Renminbi (RMB)-denominated market for this debut issuance. Read More: https://theboardroompk.com/diversifying-debt-pakistan-advances-1b-panda-bond-strategy/ Panda bonds are yuan-denominated instruments sold in China’s domestic capital market, allowing foreign issuers like Pakistan to access one of the world’s largest and deepest funding pools. This move marks a significant shift from Pakistan’s traditional reliance on US dollar, euro, or Islamic sukuk issuances. Aurangzeb highlighted that issuing in RMB and swapping the proceeds into dollars could yield a 2.5% cost differential, describing it as a valuable saving where “every single bit counts.” The announcement comes amid broader efforts to diversify external financing sources, reduce overdependence on the US dollar, and align with prudent debt management under the ongoing IMF program. Key Details and Strategic Benefits The initial tranche is targeted at approximately $250 million (equivalent in RMB), as part of a potential larger $1 billion programmatic issuance. Preparations, including regulatory approvals from Chinese authorities and investor outreach, have been underway since late 2025, with strong interest from Chinese institutional investors reflecting confidence in Pakistan’s improving macroeconomic outlook. The finance minister emphasized that this debut will complement existing access to euro and sukuk markets while lowering borrowing costs through the interest rate advantage in China’s market. Aurangzeb linked the Panda bond to Pakistan’s debt sustainability gains, noting a drop in the debt-to-GDP ratio to 70% from 75%, extended average debt maturity beyond four years, and savings of around Rs850 billion in debt servicing last year—with similar expectations this year. By entering China’s onshore bond market, Pakistan aims to broaden its investor base, mitigate foreign-exchange risks, and support medium-term fiscal stability. Broader Economic Context The Panda bond initiative aligns with strengthened Pakistan-China economic ties, including the evolving phases of the China-Pakistan Economic Corridor (CPEC). As bilateral trade nears significant levels and cooperation expands into agriculture, minerals, AI, and digital sectors, this financial instrument signals a maturing partnership focused on market-driven growth. Aurangzeb’s remarks underscore ongoing structural reforms, such as tariff reductions and privatization of loss-making state-owned enterprises, positioning the bond as part of a comprehensive reset for Pakistan’s economy.

Pakistan Defense Exports Potentially Hit $13bn Mark
Pakistan

Pakistan Defence Exports Potentially Hit $13bn Mark

Pakistan is poised for a major economic transformation as defense exports surge, with tracked deals potentially reaching $13 billion. This wave of agreements, spanning fighter jets like the JF-17 Thunder, Al-Khalid tanks, drones, armored vehicles, naval systems, ammunition, and small arms, targets markets in Africa, the Middle East, Asia, and beyond, according to KTrade report. Read More: https://theboardroompk.com/jf-17-thunder-takes-centre-stage-in-pak-indonesia-defence-discussions/ Bolstered by the battle-proven performance of Pakistani equipment—particularly the JF-17 in recent regional conflicts—these exports are seen as a key driver for foreign exchange inflows, industrial growth, and job creation over 2026-2030. Strategic Partnerships Fuel Export Momentum Key deals involve countries such as Saudi Arabia (in advanced talks to convert $2 billion in loans into JF-17 purchases), Indonesia (discussing cooperation), Bangladesh (exploring acquisitions), and African nations like Libya, Sudan, Nigeria, Ethiopia, Algeria, Zimbabwe, and others. The JF-17 Thunder, co-developed with China and produced domestically at Pakistan Aeronautical Complex (PAC) Kamra, stands out as a flagship product. Institutions like Heavy Industries Taxila (for tanks), Pakistan Ordnance Factories (POF), and Karachi Shipyard are gearing up for scaled production. These geo-strategic engagements, enhanced post recent diplomatic successes, position Pakistan as a reliable supplier for nations seeking affordable, high-quality arms without stringent conditions. Economic Supercharge and Long-Term Gains Analysts project an 82% jump in foreign exchange reserves from these inflows, aiding the Uraan Pakistan goal of $60 billion in exports by 2029. The boom catalyzes investments in supporting industries—avionics, components, and training—while creating widespread employment. A robust defense tech sector could spill over into broader technology advancements, including drones and advanced missiles. With global defense spending rising amid conflicts, Pakistan’s export push offers a pathway to economic stability, reduced reliance on loans, and strengthened external accounts.

Asad Jawaid
Tech

Building a Career at the Intersection: Asad Jawaid on Strategy, Risk, and Leading Through Change

In a session, we engage with Mr. Asad Jawaid, a seasoned strategy and commercial leader whose career is a masterclass in navigating the evolution of South Asia’s consumer landscape. With over a decade of experience, Asad uniquely bridges two worlds: the entrenched, distribution-heavy fundamentals of FMCG, honed at Reckitt, and the agile, data-driven arena of modern digital commerce, shaped within the Alibaba and Daraz ecosystem. He is recognized for translating complex insights into scalable growth and driving commercial transformation, with a track record of full P&L ownership and market strategy across Pakistan, Sri Lanka, and the wider region. We sat down with him to unpack his perspectives on the convergence of traditional and digital business models, the future of commerce, and the essential mindset for leading in a period of rapid transformation. TBR: You have built your career across different industries and roles. When you look back, what were the key chapters that shaped who you are as a leader today? AJ: My career has come in a few chapters. At Reckitt, I learned discipline, ownership, and how to understand customers from the field, not just presentations. Moving into Daraz and the Alibaba ecosystem shifted my thinking toward systems: category strategy, seller economics, and using data to move fast. Regional work across South Asia taught me to adapt playbooks to local realities. Across all of it, I have become more curious, more practical, and more focused on building teams that can scale. TBR: Was there a defining moment early in your career when you realised you wanted to work in high growth, consumer facing businesses rather than a more traditional path? AJ: Early on, I noticed I was most energised when the consumer was changing and the answers were not obvious. I enjoyed ambiguous problems where you have to build the approach, test it, and improve it quickly. That pace and constant learning felt more meaningful to me than a predictable path, so I leaned into high-growth roles where the market keeps you sharp. TBR: You now lead commercial strategy at Daraz, one of Pakistan’s most visible digital businesses. What were the most important skills or mindsets you had to develop along the way to make that transition possible? AJ: Three things helped most. First, systems thinking: seeing how assortment, pricing, traffic, seller health, and operations link together. Second, data fluency: spotting real signals, then converting them into actions fast. Third, a learner’s mindset: staying curious, unlearning what no longer applies, and partnering closely with cross-functional teams to execute. TBR: Every career has inflection points. Can you share one decision, move or risk you took that felt uncertain at the time but proved transformative later? AJ: Leaving a clear FMCG track for e-commerce was the biggest risk. I went from familiar brands to leading Fashion, learning new consumers, new metrics, and a new operating rhythm. It felt like starting over, but it forced faster learning and more structured thinking. I learned to build growth engines instead of relying on inherited playbooks. That move later unlocked multi-category leadership, regional exposure, and transformation work that still shapes how I approach strategy. TBR: Who have been the most influential mentors or role models in your journey, and what are the one or two lessons from them that you still apply every day? AJ: I have learned from leaders who combined high standards with trust. Two lessons stay with me. First, execution is where strategy becomes real, so keep plans simple, clear, and repeatable. Second, leadership is about enabling others: set direction, ask better questions, and give teams the tools and confidence to own outcomes. TBR: You have seen the evolution of Pakistan’s consumer and e-commerce landscape first hand. How has that context shaped your thinking about growth, partnerships and doing business here? AJ: Pakistan teaches resilience. Consumers are value-conscious, behaviour shifts quickly, and external conditions can change plans overnight. That has made me focus on fundamentals: trust, selection, service, and pricing discipline. It has also reinforced that partnerships must be win-win and grounded in data. The goal is flexible systems that can absorb shocks and still deliver consistent value. TBR: What kind of leader do you consciously try to be for your teams, and how has your leadership style changed from your first managerial role to now? AJ: Earlier, I thought leadership meant having answers and pushing hard. Now I try to create clarity, context, and momentum. I focus on direction, simple decision frameworks, and removing friction so teams can move faster. I encourage ownership, thoughtful experimentation, and learning from mistakes. My job today is less about doing the work myself and more about making strong execution repeatable. TBR: On a personal level, what keeps you motivated in demanding roles, and how do you reset or stay grounded outside of work? AJ: Progress motivates me: a category improving, a process scaling, or someone on the team stepping up. To reset, I lean on fitness, travel, and time with people who keep me grounded. I also reflect regularly on what is working, what is not, and what I need to learn next. TBR: If you were speaking to a young professional at the very start of their career, what honest advice would you give them about building a meaningful long term journey, not just chasing the next title? AJ: Optimise for skills, not titles. Take roles that stretch you and teach you how to solve unfamiliar problems. Work with people who challenge you and give direct feedback. Stay curious, stay humble, and build a reputation for reliability. Careers compound through capability and relationships, and the best opportunities usually follow consistent growth over time.

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