Photo : Dawn
NIAS Area Studies
PAKISTAN READER
Photo : Dawn
In Focus
Budget 2025: Tax net expansion, economic growth, and vehicle policy
On 20 June, Dawn reported that on 19 June, several parliamentary committees rejected the government’s proposal to impose a carbon levy on petroleum products, terming it an unnecessary burden on the public. However, they approved new taxes on high-value pensions and income of international athletes. Finance minister, Muhammad Aurangzeb, emphasized that “the era of tax exemptions and amnesty schemes is over” and “we are now focused on expanding the tax net, and that process is actively underway.” The debate also highlighted whether the measure should be classified as a levy or a tax, its revenue potential and provincial share, and whether the federal government’s objective is to use it as a tool to genuinely raise additional funds. Further, the Senate parliamentary committee rejected the surcharge cap removal and proposed tiered levies on small vehicles. However, the committee approved proposals to tax annual pensions exceeding PKR 10 million and extend tax holidays for special economic zones. Members also discussed the New Energy Vehicle Adoption Levy Act, 2025, noting that hybrid vehicles have not been included in the proposed measures.
On 20 June, Dawn reported that on 19 June, the federal government launched the National Electric Vehicle (NEV) Policy 2025-30, describing it as a transformative step to achieve industrial growth, environmental protection, and energy efficiency in Pakistan. The primary target of the policy is to ensure that electric vehicles account for 30 per cent of all new vehicles sold in the country by 2030. This transition is projected to save 2.07 billion litres of fuel annually, resulting in nearly USD 1 billion in foreign exchange savings. Additionally, Special Assistant to the Prime Minister on Industries and Production, Haroon Akhtar Khan, clarified that the Auto Industry Development and Export Policy will remain in place until 2026 and will be phased out gradually by 2030. Khan announced that an initial subsidy of PKR 9 billion has been allocated for the fiscal year 2025-26, under which 116,053 electric bikes and 3,171 electric rickshaws will be facilitated. Khan stated that the government will also introduce special support packages for small and medium enterprises (SMEs) to further boost localisation. Previously, the government provided exemptions on customs duties and sales tax on EV parts to support the local industry.
On 20 June, The News International reported that Pakistan plans to increase electric vehicle (EV) production to 2.2 million units over the next five years as part of its global climate commitments. To fund these subsidies, the government is imposing new levies on conventional car buyers. The National Assembly’s Standing Committee on Finance learned during its session that a tiered levy structure will be introduced: 1 per cent on the buyer of new vehicles up to 1300 cc, 2 per cent for 1301–1800 cc, and 3 per cent for cars above 1800 cc. The committee also approved the government’s proposal to impose a 10 per cent sales tax on solar equipment. Federal Board of Revenue (FBR) Chairman Rashid Langrial said this sales tax would only be implemented once approved by parliament. He added that efforts are also underway to expand the sales tax net — non-registered individuals will be forced to register or risk having their bank accounts frozen. Identification of non-registered businesses will be conducted using data such as electricity consumption and income tax filings, beginning with industrial units, especially in Karachi, thereby focusing on enforcement and compliance over leniency.
On 20 June, The Nation reported that on 19 June, the leader of Jamiat Ulema-e-Islam Fazl (JUI-F), Maulana Fazlur Rehman called for a major change in the nation’s politics in the National Assembly. He said that “we don’t need traditional politics anymore. We need a revolution. Real justice for the people will lead to a better economy.” He also claimed that “every year, every government says the same thing that this budget will help the economy grow and benefit the people. But when we look at the past 15 to 20 years, we have to ask: have we really made progress or are we going backwards?” He highlighted that Pakistan has even seen times when its GDP growth went negative, stating that “last year, we couldn’t even reach half of the growth target set by the government. No major reforms were introduced, and no new hope was given to the people.” He referred to the country’s security and peace, stressing that a peaceful environment is necessary for economic growth. He said “since 9/11, our country has seen violence and unrest. Things that were once seen as crimes have sadly become normal in our society. People no longer feel safe.”
References:
“Budget 2025-26: Era of amnesty schemes is over, says Aurangzeb,” Dawn, 20 June 2025
“Fazl calls for major change in country’s politics,” The Nation, 20 June 2025
“E-bikes, rickshaws get Rs9bn subsidy under National Electric Vehicle policy,” Dawn, 20 June 2025
“Pakistan eyes EV boom, funds subsidies through new car levies,” The News International, 20 June 2025
Civil Servants Bill 2025 gets approval from Senate; bill aims to improve transparency
On 19 June, the Senate gave its assent to the Civil Servants Bill 2025. The objective of the bill is to increase “transparency.” Furthermore, it will enable individuals to access information related to the assets owned by senior government officials. The bill was introduced by PML-N’s Azam Nazeer Tarar. The bill amends the Civil Servants Act 1973. As per the bill, senior government officers whose salary falls in Basic Pay Scale 17 to 22 have to declare their assets, whether in Pakistan or foreign countries, which the common public can retrieve. The bill also includes measures to make sure that no “sensitive personal information” goes out in public. (“Senate passes Civil Servants Amend Bill,” The Express Tribune, 20 June 2025)
Government receives five expressions of interest for PIA privatization
On 19 June, Dawn reported that the Privatisation Ministry has received Expressions of Interest (EoI) from five parties, including business groups and a military-owned firm, to sell its national carrier, the Pakistan International Airlines (PIA). The ministry announced that “the government will review the documents and give qualified parties access to data for due diligence.” The five parties are a consortium of major industrial firms: Lucky Cement Ltd, Hub Power Holdings Ltd, Kohat Cement Co Ltd and Metro Ventures. Another is led by investment firm, Arif Habib Corp Ltd and includes fertiliser producer Fatima Fertiliser Co Ltd, private education operator The City School, and real estate firm Lake City Holdings. Further, documents were submitted by Fauji Fertiliser Company Ltd, a military-owned conglomerate, Pakistani airline Air Blue Ltd and a consortium including Bahria Foundation, domestic carrier Serene Air and US-based Equitas Capital LLC. The government has offered full divestment, has scrapped the sales tax on leased aircraft, and is providing limited protection from legal and tax claims. Around 80 per cent of the airline’s debt has been transferred to the state. Privatisation Minister, Muhammad Ali, said that the government is “targeting PKR 86 billion in privatisation proceeds this year.” (“Govt draws five potential buyers for PIA,” Dawn, 19 June 2025)
In Brief
POLITICS
PM Sharif urges pharmaceutical firms to obtain accreditation from WHO
On 19 June, PM Sharif urged Pakistan’s pharmaceutical firms to look towards obtaining accreditation from the World Health Organization (WHO). Furthermore, the prime minister is seeking to utilize state-of-the-art technology to curb the illicit trade of medicines. PM Sharif presided over a “high-level meeting” which discussed the state of health affairs in the country. He appreciated the Ministry of Health Services for its forward-looking perspectives. PM Sharif asserted that it is the federal government’s “top priority” to furnish “best possible healthcare facilities.” PM Sharif also emphasized that no concessions should be made when it comes to “quality of medical education.” Further, he ordered an overarching “review” of the nursing sector for enhancing its “capacity and service delivery.” (Syed Irfan Raza, “PM Shehbaz pushes health reforms with digitisation, WHO accreditation,” Dawn, 20 June 2025)
On the bill prohibiting dual citizenship of civil servants: “Civil servants, politicians, and military officials must not have divided loyalties,” argues an editorial in The Nation
On 20 June, an editorial in The Nation titled “Clarifying Loyalties” discussed the recent passing of the bill by the interior committee, which prohibits civil servants from holding citizenship of another country. The editorial demanded that the bill should be immediately sent to the National Assembly for its assent. The editorial highlighted how bureaucrats possessing citizenship of any other country constitute a threat. The editorial strongly argued against bureaucrats, army officers, and politicians from holding nationality of any other country, as individuals cannot be faithful to two countries who have divergent interests. The editorial argued that civil servants holding the nationality of another country cannot fully commit to their country’s future. The editorial also highlighted how people holding the nationality of another country are found to be involved in “espionage” activities.
(“Clarifying Loyalties,” The Nation, 20 June 2025)
ECONOMY
IT minister announces 5G rollout plan
On 20 June, Dawn reported that IT and Telecom Minister Shaza Fatima Khawaja reaffirmed the government’s commitment to launching 5G internet services, stating that work on the project was ongoing. She was speaking at a ceremony organised by the Pakistan Telecommunication Authority (PTA) to mark the milestone of Pakistan surpassing 200 million telecom subscribers, including 150 million broadband users and over 2 million fibre-to-home subscribers. As part of the celebrations, mobile phone manufacturers have donated 200 locally assembled smartphones, which will be distributed among female SIM owners through computerised balloting across Pakistan. The total number of SIMs issued has reached 200 million, and the teledensity has remained relatively stable. In contrast, broadband penetration has shown substantial growth, increasing from 53.6 per cent in June 2023 to 60.8 per cent by June 2025. Over 36 mobile device manufacturing companies are operating in the country, and approximately 136 million handsets have been locally manufactured or assembled since 2019, including 37 per cent smartphones. (“IT minister reaffirms 5G rollout plans as mobile users cross 200m,” Dawn, 20 June 2025)
Shortfall in government spending on education
On 20 June, Dawn reported that government spending on education in Pakistan has fallen to a new low in the past year despite being declared a national emergency with around 26 million children out of school, one of the highest percentages globally, according to an NGO called Save the Children. As per the Pakistan Economic Survey FY 2024-25, the education expenditure has fallen by 29 per cent. The percentage of GDP spent on education has also fallen consistently since 2018. The UN-backed Incheon Declaration recommended that governments allocate 4 per cent to 6 per cent of their GDP to education. (Amin Ahmend, “Govt spending on education ‘hits new low’,” Dawn, 20 June 2025)
SECURITY
Five people were killed over property dispute in Balochistan
On 20 June, Dawn reported that five people were killed in separate firing incidents in Quetta and Dera Murad Jamail. The police has arrested Adnan, a man who is charged with killing his two brothers over a property dispute, as he did not want to share the inheritance with them. In another incident, armed men opened fire on a car and killed two people in Dera Murad Jamali. In another incident, a victim identified as Mushtaq Ahmed was killed by an unidentified gunman outside a sessions court in Sariab area over a property dispute. (“Five killed in separate firing incidents in Balochistan,” Dawn, 20 June 2025.)
On attack on Jaffer Express in Balochistan:
“This was not a random act of violence. It was an act of terrorism — targeted, deliberate and calculated to create fear and instability,” argues an editorial in The Express Tribune
On 20 June, an editorial in The Express Tribune titled “Terror on the tracks” reported that a remotely activated explosive device was planted on the railway track on the Sindh-Balochistan border near Jacobabad. Fortunately, only four bogies of the targeted Jaffer Express were derailed while no lives were lost The editorial alleged that this incident is not a random act of violence; it was an act of terrorism that was deliberately targeted to create a sense of fear and instability. The statement that has been circulating on social media has left doubt about the perpetrators or their intentions. The editorial claimed that the incident is not just rooted in local dissent but is allegedly sponsored and supported by Indians. This train was en route to Quetta. It is said that the attack was designed to disrupt Balochistan's linkage with the rest of the country.(“ Terror on the tracks,” The Express Tribune, 20 June 2025.)
EXTERNAL
Pakistan to continue to support Iran despite Chief of Army Staff meeting Trump: The News International
On 20 June, as per sources of The News International, Pakistan’s stance of supporting Iran would remain unchanged after the Chief of Army Staff’s recent meeting with US President Donald Trump. Further, the source of The News claimed that Pakistan is the only country attempting to help Iran. During the meeting, the US President appreciated the leadership of the Chief of Army Staff Asim Munir. As per The News, President Trump’s appreciation for Field Marshall Munir received intense criticism from supporters of the PTI.
On 20 June, an editorial in The Express Tribune titled “A strategic huddle,” discussed the recent meeting between Chief of Army Staff Asim Munir and US President Trump at the White house and how Pakistan continues to maintain its “geopolitical” relevance. As per the editorial, Chief of Army Staff having a direct meeting with President Trump without the presence of any other political staff signifies that Pakistan’s “geopolitical importance” unchanged. The editorial opined that the presence of US Secretary of State Marco Rubio, US Special Representative for Middle East Steve Witkoff, and ISI head Lt. General Asim Malik in the session signifies that the US could be attempting to make use of Pakistan’s strong connections with Iran to reduce tensions.
On 20 June, an editorial in The News International titled “A diplomatic reset,” discussed the significance of the meeting between US President Trump and Field Marshal Asim Munir. As per the editorial, the meeting sparked interest among all the neighbours of Pakistan. The editorial asserted that President Trump’s remarks were in contrast to New Delhi’s stance of continually undermining the role of American mediation between India and Pakistan. The editorial claimed that Pakistan showcased itself as a responsible power despite it allegedly being in advantageous position during the military confrontation against India. The editorial pointed out how Pakistan after the fall of the PTI government has attempted to reconstruct ties with the US. The editorial viewed the meeting as a positive development in bilateral relations. The editorial highlighted the criticism which the meeting has received, asserting that instead of the Chief of Army Staff, it should have been PM Sharif who should have held the meeting with the US President. However, the editorial contended that since the deliberations involved issues of “security, counter-terrorism and regional stability,” the Chief of Army Staff meeting the US President was not unusual. (Ansar Abbasi, “‘100% the same’: Pakistan’s unwavering support for Iran after Trump-Munir meeting,” The News International, 20 June 2025; “A strategic huddle,” The Express Tribune, 20 June 2025; “A diplomatic reset,” The News International, 20 June 2025)
1800 Pakistani nationals return from Iran
On 20 June, Dawn reported that the conflict between Iran and Israel has led to the return of about 1,800 Pakistani citizens over the past three days through the land route. The Assistant Commissioner stated that necessary arrangements for the arrival of Pakistani citizens have been made, and they have been shifted to Pakistan House. The returning Pakistanis mostly entered through the Taftan border in Pakistan. Officials stated that the first batch arrived in Pakistan from different cities in Iran on Monday night via the Taftan land route. The return continued through other crossings, like the Gabad-Rimdan crossing. The official stated that another batch of people arrived on Wednesday, who reached Quetta from Taftan, and they arrived in Taftan by bus from Iran. Pakistan's foreign office mentioned the evacuation of Pakistani nationals from Iran, approximately 3,000. (Saleem Shahid,“Around 1,800 return via land routes,” Dawn, 20 June 2025)
Pakistan rejects India’s claims over Pahalgam, calls for an independent investigation
On 20 June, Dawn reported that Pakistan replied to India on 18 June during the ‘Interactive Dialogue on the UN High Commissioner for Human Rights’ Annual Report’ in Geneva. Pakistan’s representative denied all the allegations made by India over the Pahalgam attack and further emphasized that India is blaming Pakistan without any evidence. He also stated that India has declined an independent and impartial investigation. The representative also argued that India opted for “deliberate and unjustifiable” military strikes on civilians, residences, and places of worship in Pakistan. They used this to fulfill their political motive. He emphasized on the Article 1 of the International Covenant on Civil and Political Rights (ICCPR) and the International Covenant on Economic, Social and Cultural Rights (ICESCR), that was used by India for the right to self-determination, and claimed that this it hinders the fundamental rights of Pakistan. Pakistan also stated that rather than blaming Pakistan or the Muslim community India should revisit the supremacist pursuit of hegemony of Hindutva. (Amin Ahmed,“Pakistan counters Indian claims over Pahalgam attack in Geneva,” Dawn, 20 June 2025)
|
