WASHINGTON: The United States said Friday that it had suspended tax exemption privileges enjoyed by Pakistani diplomats due to parallel disputes with Islamabad in the latest dust-up between the countries.
Under the 1961 Vienna Convention, diplomats around the world do not pay taxes in countries where they are posted, with embassy staffers in Washington routinely flashing State Department-issued exemption cards when dining out or shopping.
The State Department said it withdrew tax exemptions for Pakistani diplomats and their dependents as of May 15, citing pending tax issues faced by US diplomats in Pakistan.
“The issue is the subject of ongoing bilateral discussions, and we hope to be able to resolve the issue and restore the tax privileges,” a State Department spokesman said.
While the latest issue was not linked to politics, the United States last year restricted Pakistani diplomats in Washington from traveling outside a 25-mile (40-kilometer) radius around the US capital after charging that Pakistani police routinely harass US diplomats, including through time-consuming traffic stops.
The Pakistani embassy in Washington said that 22 officials enjoyed the tax exemption.
In a statement, it also said that discussions were underway “on the basis of the principle of reciprocity.”
Pakistan is a Cold War ally of the United States but the two countries have had bumpy relations in recent years, with President Donald Trump cutting off some $300 million in military aid, saying Islamabad had failed to curb Islamist extremists who stage attacks in Afghanistan and India.
Pakistan has tried to revive ties by using its contacts with the Taliban to facilitate negotiations with the Trump administration, which wants to withdraw troops from Afghanistan and end America’s longest war.
US pulls tax exemption from Pakistani diplomats
US pulls tax exemption from Pakistani diplomats
- Withdraws privileges citing pending tax issues faced by US diplomats in Pakistan
- Under Vienna Convention, diplomats do not pay taxes in countries where they are posted
Pakistan, China to sign multiple MoUs at major agriculture investment conference today
- Hundreds of Chinese and Pakistani firms to attend Islamabad event
- Conference seen as part of expanding CPEC ties into agriculture, trade
KARACHI: Islamabad and Beijing are set to sign multiple memorandums of understanding (MoUs) to boost agricultural investment and cooperation at a major conference taking place in the capital today, Monday, with hundreds of Chinese and Pakistani companies expected to participate.
The conference is being billed by Pakistan’s Ministry of National Food Security and Research as a platform for deepening bilateral agricultural ties and supporting broader economic engagement between the two countries.
“Multiple memorandums of understanding will be signed at the Pakistan–China Agricultural Conference,” the Ministry of National Food Security said in a statement. “115 Chinese and 165 Pakistani companies will participate.”
The conference reflects a growing emphasis on expanding Pakistan-China economic cooperation beyond the transport and energy foundations of the flagship China-Pakistan Economic Corridor (CPEC) into agriculture, industry and technology.
Under its first phase launched in 2015, CPEC, a core component of China’s Belt and Road Initiative, focused primarily on transportation infrastructure, energy generation and connectivity projects linking western China to the Arabian Sea via Pakistan. That phase included motorways, power plants and the development of the Gwadar Port in the country's southwest, aimed at helping Pakistan address chronic power shortages and enhance transport connectivity.
In recent years, both governments have formally moved toward a “CPEC 2.0” phase aimed at diversifying the corridor’s impact into areas such as special economic zones, innovation, digital cooperation and agriculture. Second-phase discussions have highlighted Pakistan’s goal of modernizing its agricultural sector, attracting Chinese technology and investment, and boosting export potential, with high-level talks taking place between planning officials and investors in Beijing.
Agri-sector cooperation has also seen practical collaboration, with joint initiatives examining technology transfer, export protocols and value-chain development, including partnerships in livestock, mechanization and horticulture.
Organizers say the Islamabad conference will bring together government policymakers, private sector investors, industry associations and multinational agribusiness firms from both nations. Discussions will center on investment opportunities, technology adoption, export expansion and building linkages with global buyers within the framework of Pakistan-China economic cooperation.
