Photo : White Star
NIAS Area Studies
PAKISTAN READER
Photo : White Star
In Focus
Government fixes ex-mill sugar price, tax-free sugar imports violate IMF commitments
On 15 July, The Express Tribune reported that the Ministry of National Food Security and Research announced that the federal government and sugar industry have reached an agreement, establishing the ex-mill price of sugar at PKR 165 per kilogram. The Ministry stated that all provincial governments shall ensure the availability of low-cost sugar to the general public in light of this decision. However, sugar is currently being sold at a high price, up to PKR 210 per kilogram. Since 11 July, sugar mills in Sindh and Punjab have stopped their sugar supply. Due to the supply being suspended, stored sugar is being sold in Karachi, causing wholesale and retail prices to surge. It is speculated that sugar mill owners are the “root cause” behind this price hike; these owners have historically pressured the government to allow exports under the semblance of maintaining surplus stock, thereby increasing domestic prices. Chairman of the Wholesale Grocers Association, Rauf Ibrahim, argued that the government's lack of interest or negligence in prosecuting these sugar mill owners and hoarders is the main reason behind rising prices.
On 15 July, The Express Tribune reported that the federal government’s decision to import 500,000 metric tonnes of sugar by waiving import taxes is a grave violation of the country’s written commitment to the International Monetary Fund’s (IMF) USD 7 billion programme. Last week, the cabinet approved the import of approximately 500,000 metric tonnes of sugar. It waived nearly all applicable import taxes to stabilise supply, maintain affordable prices, and mitigate the negative impact of its earlier decision to allow sugar exports. Previously, the government had allowed the export of 765,000 metric tonnes of sugar, which constrained supply. Following the cabinet decision, the Federal Board of Revenue (FBR) issued notifications to waive import duties and apply a nominal 0.25 per cent sales tax and withholding tax rate. The sales tax rate was reduced from a cumulative 21 per cent to 0.25 per cent, and duties were fully exempted. The tax waivers apply to both private importers and the Trading Corporation of Pakistan (TCP). It is alleged that the IMF has not accepted Pakistan’s case that the tax-free sugar import was justified in light of a food emergency. IMF’s programme conditions stipulate to “not grant tax amnesties, and do not issue any new preferential tax treatment, including exemptions, zero rating, tax credits, accelerated depreciation allowances, or special rates.” The government’s failure to achieve deregulation of the sugar sector is demonstrated by its preferential tax treatment and engagement in commodity purchases, thereby breaching two conditions of the IMF programme. (“Sugar price set at Rs165/kg after free-for-all surge,” The Express Tribune, 15 July 2025; Shahbaz Rana, “IMF slams tax-free sugar import,” The Express Tribune, 15 July 2025)
Pakistan, UK formulate Business Advisory Council to enhance economic collaboration
On 14 July, Pakistan and the UK inked the Trade Dialogue Mechanism Agreement and formulated the UK-Pakistan Business Advisory Council. The council will enable businessmen and government officials to work together to achieve “high value trade and investment.” Further, it will also provide recommendations for reforms in policies and enhance business opportunities. This is a step in the direction of institutionalizing “bilateral economic cooperation.” From the Pakistani side, Minister of Commerce Jam Kamal Khan, and from the UK side, Minister of State for Trade Policy and Economic Security Douglas Alexander signed the accord. This accord is expected to lead to the formulation of “joint working groups” and promote collaboration in “digital trade, renewable energy, agriculture, and pharmaceuticals.” The UK would also furnish GBP 200,000 to encourage its people to invest in Pakistan. (“Pakistan, UK ink accord to boost economic cooperation,” Dawn, 15 July 2025)
Federal Constabulary will not be a federal police force, clarifies Minister of State for Interior
On 14 July, Minister of State for Interior Talal Chaudhary clarified that the newly modified Federal Constabulary would not serve as a police force. On 13 June, President Zardari had set out an ordinance which authorized the government to modify the Frontier Constabulary into the Federal Constabulary to ensure law and order and strengthen the law enforcement agencies. Talal Chaudhry further informed that the transformation and renaming are done to strengthen “internal and national security.” He asserted that PM Sharif and Interior Minister Mohsin Naqvi have decided to modify the Frontier Constabulary to reduce the difference in the salaries that the personnel receive in comparison to other security forces. He highlighted how the Frontier Constabulary had played an important part in the fight against “drug trafficking, smuggling,” etc. After the modification, the FC personnel would perform the same tasks under the “federal framework.”
On 15 July, an editorial in The Nation titled “Federal Constabulary,” highlighted how the Frontier Constabulary personnel played a significant part in combating threats such as smuggling in the border areas, calling them the “first line of defence.” The editorial argued that despite the immense contribution by the Frontier Constabulary personnel, it continues to receive below-par compensation. The editorial emphasized the need to upgrade the force by highlighting how the country is seeing a surge in the threat posed by militants from Balochistan and anti-Pakistan militant groups based in Afghanistan. As per the editorial, the modification of the Frontier Constabulary would increase its “operational effectiveness.” The editorial also suggested that the newly modified Federal Constabulary be authorized to carry out operations beyond the borders. (“‘Revamped FC not police force, but security unit,’” Dawn, 15 July 2025; “Federal Constabulary,” The Nation, 15 July 2025)
In Brief
POLITICS
Most Khyber Pakhtunkhwa residents oppose protests, favour cooperating with the federal government: Gallup Survey
On 15 July, The News International reported that a survey conducted by Gallup Pakistan revealed that a majority of residents in Khyber Pakhtunkhwa (KP) prefer “working with the federal government over participating in protests.” The province-wide survey was conducted from February to March this year, covering 3,000 respondents. On the questions of protests and cooperative federalism, 85 per cent of KP residents supported collaborative governance, and nearly two-thirds believed that “targeted protests can play a strategic role in effecting federal-level change.” The survey revealed that 60 per cent of people consider protests against the federal government a “legitimate means” to catalyse change. This contrast demonstrates that the population values development but remains politically active, reserving protest as a tool of political expression rather than a first instinct. The survey observed that southern districts like Dera Ismail Khan are behind other regions in terms of infrastructure and governmental facilities. A majority of respondents expressed dissatisfaction with the government’s failure to reduce corruption. Further, respondents expressed dissatisfaction over the lack of progress in public transport, sanitation, availability of libraries, parks, community centers, and gas supply.
Political questions relating to partisan affiliations and the performance of chief ministers were also asked. When asked about joining future PTI-led protests, 53 per cent rejected attendance and 40 per cent planned to participate. Overall, the findings reflect a mixed, nuanced public sentiment in Khyber Pakhtunkhwa. Residents acknowledge progress, but widespread dissatisfaction over issues of governance, corruption, and regional disparities continues to prevail. KP’s new PTI-led government must navigate these perceptions from the province and taken into cognisance the evident public demand for “effective governance, better services, and federal coordination—while leaving space for dissent when deemed necessary.” (Kasim Abbasi, “Most KP residents oppose protests: Gallup survey,” The News International, 15 July 2025)
JUDICIARY
Supreme Court emphasizes taxpayer dignity in recovery process
On 15 July, The Express Tribune reported that the Supreme Court of Pakistan has ruled that the Federal Board of Revenue (FBR) must maintain the dignity of taxpayers while undertaking tax recovery measures. The judgment authored by Justice Ayesha Malik dismissed FBR's petition against a high court order, observing that a notice that seeks recovery on the same date as its issuance would defeat the very objective of setting out a date and informing the non-compliant taxpayer in question, rendering legal safeguards ineffective despite being functional. The Court upheld that in fiscal matters, even where the law allows coercive recovery, it must be carried out in a way that respects the individual’s dignity and legal safeguards. The ruling observed that the requirement of notice before recovery is not merely statutory but “reflects the broader guarantees of due process and fair trial under Article 10A of the Constitution, as well as the right to dignity under Article 14.” Justice Shahid Waheed said that the law prescribes a recovery process that mandates that taxation officers conduct tax collection and recovery in a manner that ensures treatment of taxpayers with dignity and respect, strict implementation of established legal protocols and procedures, and the provision of transparent guidance and communication to taxpayers. Overall, the Court ruled that the cases in question failed to maintain the balance between ensuring tax recovery and upholding taxpayer dignity. (Hasnaat Malik, “Supreme Court stresses taxpayer dignity in recovery process,” The Express Tribune, 15 July 2025)
ECONOMY
Finance Minister urges trade body members to discuss their opposition to budgetary provisions
On 14 July, the federal government agreed to hold discussions with the members of the trade bodies regarding the latter's opposition to some of the provisions in the current budget. This came after the business community of Karachi and transporters intimated of organizing a “wheel-jam strike” on 19 July. Finance Minister Muhammad Aurangzeb asked all the chambers of commerce and trade associations to shed light on their problems regarding the provisions in the budget. The Karachi Chamber of Commerce and Industry (KCCI) conveyed its opposition to five budgetary provisions. KCCI expressed its discontent over “Section 37A and 37B of the Finance Act.” According to KCCI, it authorizes the Federal Bureau of Revenue (FBR) with “arbitrary” detention powers. Further, KCCI is unhappy with Section 21(S), which enforces strict fines for “cash transactions” of more than PKR 200,000. The finance minister has assured that the government would pay heed to the concerns raised by the members of the chambers and put forward the government's stance as well. The finance minister clarified that the enhanced powers of FBR are only applicable to cases where the tax dodging amount exceeds PKR 50 million. (“Aurangzeb offers talks to avert July 19 strike,” The Express Tribune, 15 July 2025)
Deputy PM calls for institutional coordination to achieve investment gains
On 15 July, The Express Tribune reported that Deputy Prime Minister and Foreign Minister of Pakistan, Ishaq Dar, chaired a meeting to review progress on investments from friendly countries across critical sectors such as infrastructure, energy, petroleum, and economic development. Dar emphasised the need for “institutional coordination and fast-tracked implementation.” He also reiterated the government's pledge to convert these investments into “tangible economic gains and mutual prosperity.” Special Assistant to the Prime Minister on Coordination of the Office of the Deputy Prime Minister, Mr. Tariq Bajwa, Secretaries of Law & Justice, Petroleum, and Finance were also in attendance. (“Deputy PM urges coordination for investment gains,” The Express Tribune, 15 July 2025)
Government aims to complete PIA privatisation within 90 days
On 15 July, The News International reported that the federal government is aiming to finalize the privatisation of its loss-making national carrier, Pakistan International Airlines (PIA), within the next three months. Expressions of Interest (EoIs) from the Roosevelt Hotel in New York, United States, will be invited in August. Currently, five parties have submitted the EOIs for the airline, with four cleared by the scrutiny committee to proceed to due diligence. These shortlisted parties were granted access to PIA’s financial statements and operational data. Privatisation Commission Secretary, Usman Bajwa, briefed the National Assembly’s Standing Committee on Privatisation, stating that the government aims to complete PIA’s privatisation by the final quarter of 2025. He stressed that no decision would be made until investors are fully satisfied and reassured parliamentarians that employee protection is being included in the privatisation process. Bajwa revealed that Pakistan’s leading business groups have expressed keen interest in the airline. He informed that the government has also invited regional carriers to participate in the bidding. Bajwa stated that the winning party will be required to expand PIA’s fleet from 19 to 45 aircrafts. Additionally, PIA’s CEO informed the committee that the airline has resumed flights to France and claimed that “PIA’s operational performance has improved considerably compared to last year.” (“Govt targets PIA privatisation in 90 days,” The News International, 15 July 2025)
ENERGY, ENVIRONMENT & WATER
Nine people in Punjab and six people in KP dead due to rain-related incidents
On 15 July, The Express Tribune reported that the intense rain during the monsoon season has resulted in the deaths of nine people in Punjab and six people in KP. Further, 62 people were wounded in Punjab due to the monsoon rains. Up until now, a total of 111 people have lost their lives due to the monsoon rains from June. According to the Pakistan Meteorological Department, the heavy rains are set to continue until 17 June in areas of Punjab, KP, and Pakistan Occupied Kashmir. The densely populated regions continue to face the threat of “urban flooding” because of the blockage of drains. As per the director of the Provincial Disaster Management Authority (PDMA), commissioners and deputy commissioners are put on “high alert.” It has also asked the Municipal and emergency departments to implement their “contingency plans.” Ordinary citizens have been asked not to make travel plans unless extremely necessary and stay away from “electric poles.” (“Nature unleashes fury; 15 more dead,” The Express Tribune, 15 July 2025)
EXTERNAL
Imran Khan’s former aide to testify against government oppression in front of the US Congress
On 14 July, Dawn reported that the Special Assistant to Former PM Imran Khan will provide “testimony” on the “political repression” carried out in the country in front of the US Congress’s Tom Lantos Human Rights Commission. The Tom Lantos Human Rights Commission was formulated in 2008 and has members from both parties in the US. Its objective is to enhance and support “international human rights.” As per a communique from the commission, the session where it would review the government of Pakistan’s role in suppressing political opposition and media in the country will be convened on 15 July. Zulfi Bukhari on his social media informed that in the testimony, he would point out the illegitimate imprisonment of Imran Khan, Bushra Bibi, and various other party members. He would also shed light on how there has been an increase in the clampdowns on free speech. (“PTI’s Zulfi Bukhari to testify before US Congress body on ‘political repression’ in Pakistan,” Dawn, 14 July 2025)
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