Pakistani businesses to halt all exports on ‘black day’ next week to protest new taxes 

Pakistani vessels pass by container ships being loaded with cargo at the port of Karachi, 08 September 2003. (AFP/File)
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Updated 25 June 2024
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Pakistani businesses to halt all exports on ‘black day’ next week to protest new taxes 

  • Pakistan hopes plan to raise taxes in proposed budget, boost state revenues will help win approval for IMF loan 
  • Taxes have notably been slapped on previously protected export-oriented sectors such as textiles 

KARACHI: Representatives of Pakistani exporters on Tuesday announced they would observe a “black day” next week in which all exports would be halted to protest new taxation measures in the federal budget 2024-25

The South Asian country hopes its plan to raise taxes in the proposed budget and boost state revenues will help it win approval from the IMF for a loan to stave off another economic meltdown. 

Pakistan has set a challenging tax revenue target of $47 billion for the next fiscal year, a 40 percent jump from the current year to strengthen the case for a new bailout deal. The big rise in the tax target is made up of a 48 percent increase in direct taxes and 35 percent hike in indirect taxes. Non-tax revenue, including petroleum levies, is seen increasing by a whopping 64 percent.

Taxes have notably been slapped on previously protected export-oriented sectors such as textiles, which consistently make up over half of Pakistan’s exports, and whose receipts keep a persistently high external account deficit in check.

Immediately after the budget speech, the representative body for the sector, All Pakistan Textile Mills Association, had called for a review, terming the budget “extremely regressive” and one that “threatens the collapse of the textile sector and its exports.” It warned of “dire consequences for employment and external sector stability, as well as for overall economic and political stability and security.”

“On Export Black Day, not a single export consignment will be dispatched from the entire country,” Jawed Bilwani, chief coordinator of the All Exports Association of Pakistan, said at a press conference on Tuesday. 

Representatives of 20 export sector associations announced a symbolic strike to protest what they called the failure of the government to maintain a fixed tax regime and the approval of a proposal for 29 percent tax on exported income. 

As part of the strike, over 20 export industries will observe an “Export Black Day” next week and halt all exports. If the exporters’ demands were not met, they would announce further actions, Bilwani said. 

Under the fixed tax regime, Pakistan exporters had to pay 0.25 percent as Export Development Fund(EDF) and withholding tax of 1 percent of export turnover in addition to 0.25 to 0.35 percent bank charges which constituted 1.85 percent of the total turnover, according to exporters. With new tax measures, exporters said they would not be able to cover operational costs and may need to shut down. 

“This budget is detrimental to exports,” Iftikhar Ahmed Sheikh, President of the Karachi Chamber of Commerce and Industry (KCCI), said, adding that proposals in the budget would compel exporters to entirely cease operations.

Addressing another press conference at the Karachi Press Club, fruit and vegetable exporters warned that placing exports under the normal tax regime would have a “very serious impact” on the economy of Pakistan.

 “Abolition of fixed tax regime will significantly reduce exports and closure of export units will lead to widespread unemployment,” Waheed Ahmed, the Patron-in-Chief of All Pakistan Fruit and Vegetable Exporters Association (PFVA), said. “The tax revenue targets will not be met, shortage of foreign exchange will further depreciate rupee above all.”

The end of the fixed tax regime will also require exporters to maintain records of their income, expenditure and profits which they said was not possible under current circumstances due to supply chain issues.

“In the case of the 29 percent tax imposed on export income in the Federal budget 2024-25, the focus of exporters will be diverted from the main goal of enhancing the export of fruits and vegetables from Pakistan since they will spend more time in maintaining records of income, expenditure and profit,” Ahmed added.

In a separate press conference, Chairman of Pakistan Gem and Jewelry Traders and Exporters Association (PGJTEA) Habib-ur-Rahman said the export industry of gold jewelry was currently suffering a “severe crisis.”

“Exports are suspended and the 18 percent sales tax requirement on advance gold purchase from foreign buyers under the Entrustment Scheme by the Federal Board of Revenue has dashed the hopes of exporters,” Rahman said, adding that the export of gold ornaments would be reduced from $100 million to $1-2 million if the sales tax exemption was not restored on the export of gold ornaments.

In a rare move, representatives of the country’s salaried class also lodged their protest against new taxation measures.

Ubaidullah Shareef, the President of Salaried Class Alliance Pakistan, a newly formed body, said the government had “further burdened” the already struggling salaried class.

“The salaried class pays three times more tax than exporters and retailers,” Shareef said, highlighting that educated segments of society were leaving the country due to oppressive taxes.


Sharif pledges ‘full support’ for ECO amid Pakistan’s regional trade, connectivity push 

Updated 6 sec ago
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Sharif pledges ‘full support’ for ECO amid Pakistan’s regional trade, connectivity push 

  • Economic Cooperation Organization seeks to promote economic interests of member states in West, South and Central Asia
  • Pakistan has increasingly south to position itself as trade and transit hub connecting Central Asian states to rest of the world

ISLAMABAD: Prime Minister Shehbaz Sharif on Thursday reaffirmed Pakistan’s commitment to extend its “full support” to the Economic Cooperation Organization (ECO) as Islamabad eyes greater regional connectivity and trade to sustain its fragile economy. 

Founded by Pakistan, Iran and Turkiye in 1964, the ECO describes itself as one of the oldest intergovernmental organizations that seeks to improve regional connectivity and enhance economic cooperation for countries in West, South and Central Asia. 

Sharif met the ECO’s outgoing Secretary-General Khusrav Noziri in Islamabad on Thursday during which the two spoke about Noziri’s contributions to the regional platform. 

“The Prime Minister reaffirmed his commitment that Pakistan would continue to lend its full support to ECO in enhancing intra-regional trade among ECO countries as well as on the ECO reforms agenda,” a statement from Sharif’s office said. 

Sharif said Pakistan was proud that the incoming ECO secretary-general was Dr. Asad Majeed Khan, Pakistan’s former foreign secretary. 

“The secretary-general conveyed his gratitude for Pakistan’s consistent support to him during his tenure as secretary-general ECO,” the Prime Minister’s Office (PMO) said. 

PAKISTAN’S INVESTMENT, CONNECTIVITY PUSH

Pakistan has recently sought to forge deeper trade and economic ties with Central Asian countries. There has been a flurry of recent visits, investment talks and economic activity between Pakistan and these Central Asian countries, including meetings of top Pakistani officials with the leaders from Uzbekistan and Azerbaijan.

Located in a landlocked but resource-rich region, Central Asian countries need better access to regional markets including Pakistan, China, India and countries of West Asia. Meanwhile, Islamabad is seeking to bolster trade and investment ties with allies to stabilize its fragile $350 billion economy as it faces an acute balance of payment crisis amid soaring inflation and rising external debt.

It hopes to achieve this by positioning itself as a trade and transit hub connecting Central Asian countries to other parts of the world. Pakistan recently offered Central Asian states to become part of the China-Pakistan Economic Corridor project, under which Beijing has pledged around $65 billion in energy, infrastructure and other projects in Pakistan

Pakistan is seeking to enhance its foreign exchange reserves and bolster its economy as it tries to cut reliance on international financial institutions such as the International Monetary Fund (IMF) whose financial bailout packages come at a heavy cost for Islamabad. 

Sharif has repeatedly said his government wants mutually rewarding partnerships, not just loans, from regional allies. 


Police release chairman of Pakistan’s leading rights body after brief detention

Updated 37 min 47 sec ago
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Police release chairman of Pakistan’s leading rights body after brief detention

  • Chairman Human Rights Commission of Pakistan Asad Iqbal Butt says police questioned him about his ties to Baloch rights movement
  • Pakistani state has denied allegations by rights activists and politicians it is involved in enforced disappearances of people in Balochistan 

KARACHI: The chairperson of a leading rights body in Pakistan said he was detained by police in Karachi on Thursday who questioned him for raising his voice for the people of oppressed communities, particularly those from Balochistan. 

Asad Iqbal Butt, the chairperson of the Human Rights Commission of Pakistan (HRCP) told Arab News police officials arrived at his house around noon on Thursday and took him to meet the Station House Officer (SHO) at Karachi’s Gulberg Police Station. 

Butt said the deputy superintendent of police (DSP) at the Gulberg station asked him whether he frequently visited Quetta to organize the Baloch rights movement. 

“I explained that the movement organizes itself and we support them when they face injustice, as we do for oppressed people of any ethnicity,” Butt said. 

Enforced disappearances is an enduring issue in Pakistan where relatives, politicians, and rights activists say many people who have gone missing, especially in Pakistan’s southwestern Balochistan province, have been abducted by Pakistani security forces on the pretext of fighting militancy.

The Pakistani state denies involvement in enforced disappearances. 

Butt said the police official accused him of having ties to the Baloch people. The HRCP chief said he responded to the DSP by telling him that he had ties to “oppressed people of every ethnicity, region, and religion.”

“I believe I was taken to police station because HRCP issued a strong statement on the Bannu issue,” Butt said, referring to last week’s shooting at a peace rally in Bannu that triggered a stampede, killing at least two and injuring 20 others. 

He said another reason for his detention could be that the HRCP is trying to prevent people from Karachi’s Lyari area, who wanted to attend an upcoming protest rally for “missing persons” in southwestern Gwadar city, from being detained by police. 

“They feared I would speak out, and HRCP’s support carries weight when it speaks,” he said. 

Karachi police officials did not respond to a request for a comment. 


Pakistan, Saudi Arabia agree to enhance cooperation in IT and cybersecurity 

Updated 25 July 2024
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Pakistan, Saudi Arabia agree to enhance cooperation in IT and cybersecurity 

  • Pakistan’s IT minister urges Saudi envoy to facilitate Pakistani companies in traveling, visa issues 
  • Much of the growth in Pakistan’s IT sector is driven by the work of tech startups and freelancers

ISLAMABAD: Pakistan’s IT Minister Shaza Fatima Khawaja and Saudi envoy Nawaf bin Said Al-Malki on Thursday discussed enhancing cooperation between the two countries in the fields of information technology and cybersecurity, state-run media said. 

Pakistan and Saudi Arabia enjoy close cooperation in various fields, including information technology. Pakistan recorded monthly IT exports of $257 million in February 2024, which were 32 percent more than in the same month last year. 

Dozens of Pakistani IT firms presented their innovative ideas and products at the LEAP tech exhibition in Riyadh from March 4 to 7, helping them secure lucrative deals with Saudi companies and pushing Pakistan’s IT exports to higher figures. 

Khawaja met Malki, Saudi Arabia’s ambassador to Pakistan, in Islamabad on Thursday to discuss bilateral cooperation in IT, telecommunication and cybersecurity. 

“Minister of State for IT Shaza Fatima said Pakistan intended to boost its relations with Saudi Arabia in the field of IT and Telecommunication,” the state-run Associated Press of Pakistan (APP) said. 

The minister urged Saudi Arabia to facilitate Pakistan’s IT firms, registered with the Pakistan Software Export Board, in securing visas to the kingdom.

“Ambassador Nawaf bin Saeed Ahmad Al-Malki said that Saudi Arabia will fully cooperate with Pakistan in the field of IT and Telecommunication,” APP said. 

“He also ensured to support and facilitate Pakistani tech companies in getting visa and traveling.”

Pakistan’s market for computer software has also seen steady growth for the past several years, with the total size of the software sector at approximately $3.2 billion. The US is Pakistan’s largest market for IT, accounting for 54.5 percent in the 2023 financial year, according to the International Trade Administration.

Pakistan’s IT sector consists primarily of software development and IT-enabled services for data centers, technical service/call centers, and telecom services, with 60 percent serving international customers. Much of the growth is driven by the work of freelancers and tech start-ups.


Pakistan says has ‘taken note’ of UK parliamentarians demanding ex-PM Khan’s release

Updated 25 July 2024
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Pakistan says has ‘taken note’ of UK parliamentarians demanding ex-PM Khan’s release

  • Members of Khan’s party on Tuesday spoke at British parliament about his incarceration, censorship in Pakistan
  • Pakistan’s foreign office spokesperson urges members of Britain’s parliament to promote “positive” bilateral ties

ISLAMABAD: Pakistan’s foreign office spokesperson on Thursday said it has “taken note” of the discussions that took place at the British parliament this week where lawmakers demanded former prime minister Imran Khan be released from prison. 

The UK parliament held a hearing on Tuesday that saw over a dozen British parliamentarians listen to members of Khan’s Pakistan Tehreek-e-Insaf (PTI) party speaking about his incarceration, deteriorating law and order as well as growing censorship in Pakistan.

The event, jointly hosted by Conservative Peer Lord Daniel Hannan and British-Pakistani Labour MP Naz Shah, was attended by former Tory home secretary Priti Patel, Baroness Sayeeda Warsi, Labour MP Naushaba Khan, Lord Tariq Ahmad of Wimbledon and others.

The hearing resolved that the parliamentarians will call on British PM Keir Starmer and State Secretary David Lammy for the UK government to take note of a recent United Nations report into Khan’s incarceration and demand his release from prison, Khan’s PTI party said.

During a weekly press briefing, Foreign Office Spokesperson Mumtaz Zahra Baloch said the hearing was a private event in a side room of the House of Lords, adding that it was organized by a “political party.”

“We have taken note of the discussions that took place,” she said. “As we have said on several occasions, it is important that members of legislative bodies contribute to promoting positive dynamics in bilateral relations and contribute to developing mutual understanding and mutual respect between Pakistan and the home country.”

Khan has been in jail since August last year, even though all four convictions handed down to him ahead of a parliamentary election in February have either been suspended or overturned.

After being acquitted on the last of those four convictions, authorities rearrested Khan and his wife in an old corruption case on charges of selling state gifts unlawfully. 

He also faces an accusation of inciting his supporters to attack military installations in May last year. Khan denies all the accusations.

A UN panel of experts this month found that Khan’s detention “had no legal basis and appears to have been intended to disqualify him from running for political office.”

Khan’s PTI party secured the largest number of seats in parliament in the February general election despite what it says is a military-backed crackdown that aims to keep him out of power. It also won nearly two dozen extra parliament seats after a court ruling last week.


Pakistan court sets aside ex-PM Khan’s physical remand in May 9 riots cases

Updated 25 July 2024
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Pakistan court sets aside ex-PM Khan’s physical remand in May 9 riots cases

  • Anti-terrorism court in Lahore last week granted police Khan’s 10-day physical remand 
  • Khan, wife to remain in prison due to another reference which accuses them of “misusing powers” 

ISLAMABAD: A Pakistani high court on Thursday set aside a physical remand of former prime minister Imran Khan in a dozen new cases related to the May 9, 2023 riots, his lawyer confirmed.

An anti-terrorism court in Lahore last week granted police a 10-day physical remand of the former prime minister in a dozen fresh cases related to the May 9, 2023 attacks, when angry Khan supporters attacked military installations and government buildings across the country in response to his brief arrest. 

Khan had approached the Lahore High Court (LHC) on July 18, challenging his physical remand in the cases and requesting the court to declare it null and void. 

“The physical remand granted has been declared null and void,” Khan’s lawyer Naeem Haider Panjutha said in a video message. “This will prove to be a major setback for those who got elected through Form 47s,” he added, referring to the government. 

Khan was convicted in four cases ahead of a February national election and has been in jail since August last year, but all of the sentences against him, the last of them in a case in which he and his wife were convicted of violating Pakistan’s marriage laws, have since been overturned or suspended. 

Earlier this month, however, hours after being acquitted in the marriage case, a fresh corruption reference was filed against Khan and his wife by the National Accountability Bureau (NAB).

The new reference is related to the alleged “misuse of power in acquiring Toshakhana gifts.”

Khan and his wife are charged in the Toshakhana case with selling gifts worth more than 140 million rupees ($501,000) in state possession, which he received during his 2018-2022 premiership. The gifts included diamond jewelry and seven watches, six of them Rolexes — the most expensive being valued at 85 million rupees ($305,000).

Pakistani media widely reported on Sunday that an accountability court had approved an eight-day physical remand each for Khan and Bushra in the new NAB reference. 

Khan and his wife are expected to remain in prison due to their remand in the Toshakhana reference, which they have challenged at the Islamabad High Court.