ISLAMABAD: Prime Minister Shehbaz Sharif said on Friday the digitization of the country’s tax system was a top government priority to prevent tax evasion worth billions of rupee and meet a challenging tax revenue target of 13 trillion rupees ($46.66 billion) for the new fiscal year that started July 1, a near 40 percent jump from last year.
The South Asian country has set challenging revenue targets in its annual budget to help it win approval from the IMF for a loan to stave off another economic meltdown, even as domestic anger rises at new taxation measures.
On Thursday, Pakistan’s tax authority said it has blocked 210,000 SIM cards of users who have not filed tax returns in a bid to widen the revenue bracket. In May, Pakistan signed an agreement with consulting giant McKinsey and Company for the digitalization of its tax system.
Sharif chaired a meeting on Friday to review the reforms process of the Federal Board of Revenue (FBR), instructing it to bring taxable non-filers into the tax net.
“The meeting was told that during the FBR digitization [process], 4.5 million taxable individuals have been identified who were not part of the tax net,” state-run APP reported, adding that over 300,000 people had fixed tax returns within the last few weeks due to new government measures.
“Refunds of 4,000 companies have been stopped during the last two weeks, following the detection of under-invoicing and forged sales tax refunds,” APP said. “The prime minister said that the tax evaders as well as the officers and staffers facilitating them would be punished and vowed not to spare those plundering the public kitty.”
The premier also sought a report on the magnitude of tax evasion and the measures for its prevention.
“He vowed to introduce a taxation system of international standard in the country and called for engaging well reputed professionals and experts for formulation of tax policy.”
Among reforms the IMF is pushing for a new bailout package, like the last two loans, are strengthening public finances including through gradual fiscal consolidation, broadening the existing tax base, improving tax administration, and debt sustainability.
Pakistan is in talks with the lender for a loan of $6 billion to $8 billion, as it seeks to avert a default for an economy growing at the slowest pace in the region.
The rise in the tax target is made up of a 48 percent increase in direct taxes and a 35 percent hike in indirect taxes over revised estimates of the current year. Non-tax revenue, including petroleum levies, is seen increasing by 64 percent.
The tax would increase to 18 percent on textile and leather products as well as mobile phones besides a hike in the tax on capital gains from real estate. Workers will also get hit with more direct tax on income.
Opposition parties, mainly parliamentarians backed by the jailed former Prime Minister Imran Khan, and major trade bodies have rejected the budget and tax measures, calling them highly inflationary.
Pakistan says digitization of tax system top priority amid efforts to widen revenue base
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Pakistan says digitization of tax system top priority amid efforts to widen revenue base
- Pakistan’s tax authority recently blocked 210,000 SIM cards of users who have not filed tax returns
- In May, Pakistan signed an agreement with McKinsey and Company for digitalization of its tax system
‘Look ahead or look up?’: Pakistan’s police face new challenge as militants take to drone warfare
- Officials say militants are using weapons and equipment left behind after allied forces withdrew from Afghanistan
- Police in northwest Pakistan say electronic jammers have helped repel more than 300 drone attacks since mid-2025
BANNU, Pakistan: On a quiet morning last July, Constable Hazrat Ali had just finished his prayers at the Miryan police station in Pakistan’s volatile northwest when the shouting began.
His colleagues in Bannu district spotted a small speck in the sky. Before Ali could take cover, an explosion tore through the compound behind him. It was not a mortar or a suicide vest, but an improvised explosive dropped from a drone.
“Now should we look ahead or look up [to sky]?” said Ali, who was wounded again in a second drone strike during an operation against militants last month. He still carries shrapnel scars on his back, hand and foot, physical reminders of how the battlefield has shifted upward.
For police in the northwestern Khyber Pakhtunkhwa (KP) province, the fight against militancy has become a three-dimensional conflict. Pakistani officials say armed groups, including the Tehreek-e-Taliban Pakistan (TTP), are increasingly deploying commercial drones modified to drop explosives, alongside other weapons they say were acquired after the US military withdrawal from neighboring Afghanistan.
Security analysts say the trend mirrors a wider global pattern, where low-cost, commercially available drones are being repurposed by non-state actors from the Middle East to Eastern Europe, challenging traditional policing and counterinsurgency tactics.
The escalation comes as militant violence has surged across Pakistan. Islamabad-based Pakistan Institute for Conflict and Security Studies (PICSS) reported a 73 percent rise in combat-related deaths in 2025, with fatalities climbing to 3,387 from 1,950 a year earlier. Militants have increasingly shifted operations from northern tribal belts to southern KP districts such as Bannu, Lakki Marwat and Dera Ismail Khan.
“Bannu is an important town of southern KP, and we are feeling the heat,” said Sajjad Khan, the region’s police chief. “There has been an enormous increase in the number of incidents of terrorism… It is a mix of local militants and Afghan militants.”
In 2025 alone, Bannu police recorded 134 attacks on stations, checkpoints and personnel. At least 27 police officers were killed, while authorities say 53 militants died in the clashes. Many assaults involved coordinated, multi-pronged attacks using heavy weapons.
Drones have also added a new layer of danger. What began as reconnaissance tools have been weaponized with improvised devices that rely on gravity rather than guidance systems.
“Earlier, they used to drop [explosives] in bottles. After that, they started cutting pipes for this purpose,” said Jamshed Khan, head of the regional bomb disposal unit. “Now we have encountered a new type: a pistol hand grenade.”
When dropped from above, he explained, a metal pin ignites the charge on impact.
Deputy Superintendent of Police Raza Khan, who narrowly survived a drone strike during construction at a checkpoint, described devices packed with nails, bullets and metal fragments.
“They attach a shuttlecock-like piece on top. When they drop it from a height, its direction remains straight toward the ground,” he said.
TARGETING CIVILIANS
Officials say militants’ rapid adoption of drone technology has been fueled by access to equipment on informal markets, while police procurement remains slower.
“It is easy for militants to get such things,” Sajjad Khan said. “And for us, I mean, we have to go through certain process and procedures as per rules.”
That imbalance began to shift in mid-2025, when authorities deployed electronic anti-drone systems in the region. Before that, officers relied on snipers or improvised nets strung over police compounds.
“Initially, when we did not have that anti-drone system, their strikes were effective,” the police chief said, adding that more than 300 attempted drone attacks have since been repelled or electronically disrupted. “That was a decisive moment.”
Police say militants have also targeted civilians, killing nine people in drone attacks this year, often in communities accused of cooperating with authorities. Several police stations suffered structural damage.
Bannu’s location as a gateway between Pakistan and Afghanistan has made it a security flashpoint since colonial times. But officials say the aerial dimension of the conflict has placed unprecedented strain on local forces.
For constables like Hazrat Ali, new technology offers some protection, but resolve remains central.
“Nowadays, they have ammunition and all kinds of the most modern weapons. They also have large drones,” he said. “When we fight them, we fight with our courage and determination.”
