The initiative is designed to modernize governance, simplify interactions between citizens and government institutions, and improve the overall delivery of essential services.

One Digital Identity for Multiple Services

A central feature of the government’s digital strategy is the introduction of a unified digital identity. Rather than using different systems for different services, citizens will eventually be able to access numerous government and financial services through one secure digital platform.

The proposed system is expected to cover services such as identity verification, healthcare, banking, financial transactions, and various government facilities. By bringing these services together, the government aims to make public administration more efficient while reducing paperwork and delays.

Initial Focus on High-Impact Sectors

To ensure the project delivers practical results quickly, the government has identified several priority sectors for the first phase of implementation. These include healthcare, agriculture, utilities, housing, and small and medium-sized enterprises (SMEs).

Officials believe that introducing digital solutions in these sectors will directly benefit millions of people while demonstrating the value of the broader digital transformation programmed.

Digital Property Records and Business Identity

The housing sector is expected to undergo significant modernization under the initiative. Every public and private property will receive a unique identification number, creating a centralized system for property records. This is intended to improve transparency, simplify property management, and strengthen record accuracy.

For the business community, especially SMEs, the government plans to establish a unified legal identity system. The objective is to simplify business registration, improve operational efficiency, and support entrepreneurship by creating a more streamlined regulatory environment.

Building a Stronger Digital Infrastructure

As part of the broader strategy, the prime minister has also directed federal institutions to begin using the newly established Sky 47 central data center. The facility will function as a shared platform for storing and managing government data, allowing departments to work more efficiently without maintaining separate data centers.

A centralized data infrastructure is expected to lower operational costs, strengthen cybersecurity, improve coordination among government agencies, and enhance the reliability of digital public services.

National Coordination for Digital Reforms

To maintain momentum, Prime Minister Shehbaz Sharif has called for an early meeting of the National Digital Commission. The commission will coordinate efforts between the federal government and the provinces while reviewing implementation plans and monitoring progress.

Established under the Digital Nation Pakistan Act 2025, the commission is responsible for guiding the country’s long-term digital transformation strategy and ensuring collaboration among key stakeholders.

Pakistan Digital Authority Leading the Transition

The Pakistan Digital Authority has been tasked with overseeing the modernization of government services and strengthening the country’s digital governance framework. Officials say that legal, administrative, and institutional preparations are progressing rapidly, with international best practices being incorporated into the overall strategy.

The government believes that adopting globally recognized digital standards will help Pakistan build a more secure, efficient, and transparent public sector.

Expected Impact on Citizens and the Economy

The National Digital Vision is expected to bring significant long-term benefits for both citizens and businesses. A unified digital ecosystem can improve access to government services, reduce administrative hurdles, increase transparency, and support data-driven decision-making.

The reforms are also intended to encourage economic growth by improving the business environment, promoting industrial development, strengthening trade, and creating a more efficient digital economy.

Looking Ahead

Pakistan’s National Digital Vision represents an important milestone in the country’s journey toward digital governance. By introducing a single digital identity and expanding digital infrastructure, the government hopes to make public services faster, more secure, and easier to access.

Although implementing such a large scale transformation will require continued coordination and investment, the initiative has the potential to reshape how citizens interact with government institutions while laying the foundation for a more connected and technology driven future.

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The figures shared during the committee meeting reveal that tax collections have remained consistently high. The FBR collected Rs312.8 billion in FY2022–23, Rs515.5 billion in FY2023–24, Rs562 billion in FY2024–25, and Rs476.1 billion during FY2025–26.

Breakdown of FY2025–26 Collections

In the latest fiscal year, the FBR collected Rs476.1 billion through electricity bills. Out of this amount, Rs351.8 billion came from sales tax, while Rs124.4 billion was collected as withholding income tax.

The sales tax included several components, such as standard sales tax, extra tax, further tax, and tax on electricity supplied to retailers. Meanwhile, the withholding income tax was mainly deducted from industrial and commercial electricity consumers, with smaller contributions from domestic non-active taxpayers and collections made under Section 235A.

FBR Rejects Reports of Rs620 Billion Collection

During the meeting, FBR Chairman Rashid Langrial dismissed media reports suggesting that the tax authority had collected Rs620 billion through electricity bills. He described the reported figure as inaccurate and clarified that the official data presented to the committee reflects the actual collections.

Possibility of Higher Taxes on the Power Sector

The FBR chairman also pointed out that the electricity sector currently enjoys significant tax concessions despite its major contribution to Pakistan’s economy. He suggested that if these concessions are reviewed or reduced, the sector could face higher tax liabilities in the future.

This statement indicates that tax policy for the power sector may remain under discussion as the government looks for ways to increase revenue while balancing economic priorities.

Concerns Raised Over Rising Electricity Bills

Members of the Senate committee expressed concern about the growing financial burden on consumers. Senator Kamil Ali Agha argued that multiple taxes added to electricity bills have made power increasingly expensive for households and businesses. He referred to reports claiming that electricity costs had reached around Rs85 per unit, making monthly bills difficult for many consumers to manage.

The senator also questioned the practice of collecting different taxes through electricity bills, describing it as an added burden on citizens.

FBR Defends the Tax System

Responding to these concerns, Chairman Langrial explained that charging sales tax on electricity is a common practice in many countries because electricity is treated as a taxable commodity. He also highlighted that a large portion of the withholding income tax collected through electricity bills is adjustable.

According to the FBR, between Rs400 billion and Rs500 billion in adjustable withholding tax remains unclaimed every year. Taxpayers who file their income tax returns can claim refunds or adjustments where they are eligible, but many people do not complete the process.

Looking Ahead

The discussion reflects the broader challenge of balancing government revenue generation with the affordability of electricity. While the FBR views electricity bills as an efficient way to collect taxes, lawmakers continue to raise concerns about the impact on consumers already facing high energy costs.

As Pakistan continues to reform its tax and energy sectors, the debate over taxation through electricity bills is likely to remain a key policy issue. Future decisions regarding tax concessions, electricity pricing, and consumer relief will play an important role in shaping both government revenues and household expenses.

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According to the FBR, the maintenance window will begin at 12:30 a.m. on Saturday, August 8, 2026, and continue until 5:00 a.m. on Monday, August 10, 2026. During this period, users will not be able to access various online tax services for nearly 53 hours.

Services That Will Be Unavailable

The scheduled maintenance will affect several widely used FBR platforms, including:

• IRIS
• Digital Invoicing (DI)
• Payment System
• Synchronized Withholding Administration and Payment System (SWAPS)
• POS Registration

Taxpayers, businesses, tax consultants, and other stakeholders will be unable to log in, file returns, make payments, register point-of-sale systems, or perform other related online transactions while the maintenance work is in progress.

Taxpayers Advised to Plan Ahead

To minimize inconvenience, the FBR has urged taxpayers to complete all urgent tax-related tasks before the maintenance begins. Anyone planning to submit tax returns, make payments, complete registrations, or use any of the affected digital services should do so in advance to avoid delays.

Businesses that rely on these systems for their daily operations are also encouraged to adjust their schedules accordingly.

Services to Resume After Maintenance

The FBR has stated that all affected services will be restored as soon as the maintenance is successfully completed. The authority expects the systems to become fully operational immediately after the maintenance window ends on Monday morning.

While the temporary suspension may cause short-term inconvenience, the maintenance is expected to strengthen the stability, security, and overall performance of the FBR’s digital services.

Final Thoughts

The planned outage serves as a reminder for taxpayers to stay informed about official announcements and avoid leaving important tax obligations until the last minute. By completing filings, payments, and registrations before the scheduled downtime, users can avoid unnecessary disruptions and ensure compliance with tax deadlines.

The FBR has apologized for the temporary inconvenience and thanked taxpayers and stakeholders for their patience and cooperation during the maintenance period.

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A New Layer of Review

For years, tax authorities have routinely challenged appellate decisions by filing references and petitions before superior courts. Under the proposed framework, this practice will change. Before any case is referred to a High Court or taken to the Supreme Court or the Federal Constitutional Court, it must first be reviewed by an Independent Case Scrutiny Committee.

The objective is simple: only cases with strong legal merit, important questions of law, or significant revenue implications should proceed to higher judicial forums.

Why the Reform Was Needed

One of the major concerns within the tax administration has been the tendency to file appeals regardless of their chances of success. In many instances, officials preferred to challenge decisions rather than risk future accountability or disciplinary proceedings for choosing not to appeal.

This approach contributed to an increasing number of tax disputes, placing additional pressure on the judicial system while also increasing litigation costs for both the government and taxpayers.

The proposed committees aim to address this issue by introducing an independent review process before further legal action is initiated.

Composition of the Committees

The FBR plans to establish three committees, each responsible for a specific territorial jurisdiction.

Every committee will consist of:

• A retired judge of the Supreme Court, Federal Constitutional Court, or a High Court serving as Chairperson.
• A senior advocate with at least 15 years of experience in tax and commercial litigation before superior courts.
• A serving or retired Inland Revenue Service officer holding the rank of BS-20 or above.

This diverse composition is intended to combine judicial expertise, practical litigation experience, and administrative knowledge.

Key Responsibilities

The Independent Case Scrutiny Committees will perform several important functions, including:

• Examining whether proposed appeals are supported by sustainable legal grounds.
• Determining whether a case involves a substantial question of law.
• Evaluating the potential revenue impact before litigation is pursued.
• Reviewing pending cases to assess whether continuing litigation remains beneficial.
• Developing and maintaining a database of judicial precedents and settled legal principles.
• Identifying recurring legal issues that may require legislative or administrative reforms.

Expected Impact

If implemented effectively, the new system could significantly improve the quality of tax litigation in Pakistan. By filtering out weak or repetitive cases, the FBR can focus its legal resources on matters that genuinely require judicial interpretation.

The reform is also expected to reduce unnecessary litigation, improve consistency in the department’s legal stance, and ease the workload of superior courts. For taxpayers, it may translate into fewer prolonged disputes and greater certainty regarding tax matters.

Looking Ahead

The proposal reflects a broader effort to modernize tax administration and strengthen litigation management within the FBR. While its success will depend on the independence and effectiveness of the scrutiny committees, the initiative has the potential to create a more balanced and efficient system for resolving tax disputes.

If implemented as intended, the new framework could help ensure that appeals before Pakistan’s higher courts are driven by sound legal principles rather than procedural caution, ultimately benefiting both the tax administration and taxpayers alike.

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The appointments were made under the 2024 recruitment policy with the objective of improving the tribunal’s efficiency and reducing years of accumulated tax litigation. Along with competitive salaries, the new members were offered various benefits and privileges to attract experienced professionals capable of handling complex tax cases.

However, the expected improvement has yet to materialize. Official figures indicate that the tribunal currently disposes of around 1,000 cases every month. At this pace, it would take approximately five to six years to eliminate the current backlog—even if no additional appeals were filed during that period.

Most of the pending litigation involves Inland Revenue Service matters, accounting for nearly 60,000 cases, while another 8,000 cases are related to customs disputes. Punjab remains the most affected province, representing roughly three-quarters of the total pending cases, with Lahore handling the largest share.

In response to the growing concern, the federal government has established a four-member review committee to evaluate the performance of the recently appointed tribunal members. The panel will determine whether the appointments have achieved their intended purpose and recommend whether members should continue in office, receive extensions, or face removal due to poor performance or misconduct.

The committee consists of retired Justices Athar Saeed and Tariq Abbasi, Shad M. Khan, Chairman of the Telecommunication Appellate Tribunal and a retired Inland Revenue Service officer, and chartered accountant Ghazi Akhtar Khan. Their assessment will focus not only on the efficiency of the tribunal members but also on identifying any administrative or operational issues that may be slowing down the resolution of tax disputes.

The review follows recommendations made by a task force established by Prime Minister Shehbaz Sharif to examine case backlogs across superior courts and specialized tribunals. Its report, submitted in May, highlighted the persistent delays in tax-related litigation and called for a closer examination of the tribunal’s performance.

The findings of the committee could shape the future of Pakistan’s tax dispute resolution system. If the review concludes that structural or administrative shortcomings are limiting progress, broader reforms may be required beyond simply increasing the number of tribunal members.

As businesses and taxpayers continue to wait for timely decisions, the government’s next steps will be closely watched. A more efficient tax appeals system is essential not only for improving public confidence but also for strengthening revenue collection and creating a more predictable business environment in Pakistan.

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Despite government efforts to control the growing liabilities, several financial and operational hurdles prevented the target from being achieved.

Why Did Circular Debt Increase?

According to government officials, one of the biggest reasons behind the higher debt was the failure to recover approximately Rs200 billion from K-Electric for electricity purchases. These expected payments were considered an important part of the government’s strategy to reduce the sector’s outstanding liabilities.

In addition, several electricity distribution companies (DISCOs) performed below expectations. Lower-than-anticipated revenue collection and weaker financial results created a cash gap of nearly Rs300 billion by the close of the fiscal year.

IMF Expectations Fell Short

The IMF had anticipated a significant improvement in Pakistan’s power sector during the year. Lower global fuel prices, stronger bill recovery, reduced electricity losses, and declining interest rates were expected to reduce the government’s subsidy burden and bring circular debt down substantially.

Instead, those expected savings were not fully realized, leaving the government short of its agreed objective.

Government Measures to Reduce the Burden

The government had allocated Rs893 billion in subsidies for the power sector to support electricity generation companies and independent power producers. However, a large portion of the planned funding remained unreleased before the fiscal year ended.

To bridge the financing gap, the Power Division requested a Technical Supplementary Grant rather than seeking additional budgetary support. Officials also proposed transferring unused funds originally reserved for K-Electric’s tariff subsidy to support other distribution companies facing financial pressure.

ECC Approves Partial Relief

The Economic Coordination Committee (ECC) reviewed the proposals and approved only part of the requested financial support. While some funds were released, the amount fell short of the total requested by the Power Division.

The committee also directed authorities to continue legal proceedings regarding K-Electric’s outstanding dues. Officials remain hopeful that a court decision could help resolve the issue and improve the sector’s financial position.

Why Circular Debt Remains a Major Concern

Circular debt is one of the biggest structural problems in Pakistan’s energy sector. It develops when electricity bills are not fully recovered, government subsidies are delayed, or power companies fail to receive payments on time. As a result, unpaid obligations move through the supply chain, affecting electricity producers, fuel suppliers, banks, and distribution companies alike.

The longer these liabilities remain unresolved, the greater the pressure on the country’s public finances and energy system.

Looking Ahead

Although the government has introduced several measures to improve collections and manage subsidies, the latest figures show that much more needs to be done. Better governance, improved operational efficiency, timely subsidy payments, and stronger recovery mechanisms will be essential if Pakistan hopes to meet future IMF commitments and place the power sector on a more sustainable financial footing.

Reducing circular debt is not simply about meeting international targets—it is critical for ensuring reliable electricity supply, strengthening investor confidence, and supporting long-term economic stability.

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The update was shared by Privatization Secretary Usman Bajwa during a meeting of the Senate Standing Committee on Privatization. He said the government’s objective is to attract multiple interested buyers, creating a competitive environment that could help secure the highest possible return from the sale.

Roosevelt Hotel Remains Under Government Ownership

Unlike other assets linked to Pakistan International Airlines (PIA), the Roosevelt Hotel was not included in the airline’s privatization deal. Instead, it continues to be owned through the PIA Holding Company, making it one of Pakistan’s most valuable overseas properties.

Its location in the heart of New York and its long-standing reputation make it a significant asset that has drawn attention from international investors over the years.

Strategy Still Being Finalized

Although preparations for the sale are progressing, the government has not yet finalized the structure of the transaction. Officials are still considering whether the property should be offered through a joint venture or another investment model.

In addition, authorities are evaluating which categories of foreign investors should be invited to participate in the bidding process. These decisions are expected to influence both the level of investor interest and the overall success of the transaction.

Creating a Competitive Bidding Process

The government’s approach is focused on encouraging broad participation from potential buyers rather than relying on a single investor. By generating competition among interested parties, officials believe they can maximize the property’s market value and achieve the best financial outcome.

Reports that US banks have shown interest indicate that the Roosevelt Hotel remains an attractive investment opportunity, particularly because of its prime location in one of the world’s most active real estate markets.

What This Means for Pakistan

The planned sale of the Roosevelt Hotel forms part of Pakistan’s wider privatization and economic reform agenda. Successfully completing the transaction could generate significant revenue for the government while demonstrating its commitment to managing state-owned assets more efficiently.

As policymakers finalize the investment framework and prepare the property for the market, investors will be watching closely to see how the sale unfolds. If the process attracts strong international participation, it could become one of Pakistan’s most notable overseas asset transactions in recent years.

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According to the chamber, the outstanding amount includes Rs68 billion in income tax refunds and Rs35 billion in sales tax refunds. These figures represent verified claims submitted by companies that have been waiting for reimbursement, with the latest data compiled from OICCI members as of June 2026.

Delays Putting Pressure on Businesses

The OICCI has expressed concern that the prolonged delay in processing these refunds is creating financial challenges for many of its member companies. Since tax refunds represent money that businesses have already paid in excess or are legally entitled to recover, delays reduce the funds available for daily operations, investment, and expansion.

Many of the affected firms are among Pakistan’s largest foreign investors, making the issue particularly significant for the country’s investment environment.

Impact on Investor Confidence

Beyond the immediate financial impact, the chamber believes that delayed refunds send an unfavorable signal to current and potential investors. A tax system that processes refunds efficiently is often viewed as an indicator of transparency, policy consistency, and good governance.

When legitimate refund claims remain pending for extended periods, businesses may question the predictability of the tax regime, which can influence future investment decisions.

Call for Prompt Action

The OICCI has requested the intervention of FBR Chairperson Rashid Mahmood Langrial to ensure that verified refund claims are processed and paid without further delay. The chamber emphasized that resolving these outstanding payments would help improve business liquidity while reinforcing confidence in Pakistan’s tax administration.

Why It Matters

Tax refunds are not financial incentives—they are funds that rightfully belong to businesses after adjustments in tax liabilities. Releasing these payments on time allows companies to reinvest in operations, create employment opportunities, and contribute more effectively to economic growth.

As Pakistan seeks to attract greater foreign investment and strengthen its business environment, efficient tax administration and timely refund processing will remain essential components of building investor trust and supporting sustainable economic development.

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Passenger Vehicle Market Shows Strong Momentum

Passenger cars and light commercial vehicles (LCVs) recorded combined sales of 206,445 units during FY2025-26, reflecting a 39% increase compared to the previous fiscal year. This total included 155,631 passenger cars and 50,814 LCVs and pickup trucks, highlighting broad-based demand across different vehicle categories.

The strong performance was supported by lower financing costs, relatively stable vehicle prices, and attractive promotional campaigns offered by automakers throughout the year.

Overall Auto Industry Expands by 41%

The country’s automotive sector registered total sales of 1.63 million units, marking a 41% year-on-year increase. Growth was evident across most vehicle segments.

Truck sales climbed 67% to 7,439 units, benefiting from stronger transportation activity and stricter enforcement of axle-load regulations. Bus sales also improved by 25%, reaching 985 units.

The two-wheeler market achieved a new milestone, with motorcycle sales rising 31% to a record 1.93 million units, while three-wheeler sales increased 4% to 41,802 units.

Tractors were the only major segment to experience a slight decline. Sales slipped 1% to 28,791 units, mainly due to higher prices and delays in government subsidy programs.

June Performance Reflects Changing Buyer Trends

In June 2026, total vehicle sales reached 26,823 units, representing a 5% increase compared to the same month last year and a 28% rise from May.

Passenger cars and LCVs together sold 22,741 units, although passenger car sales alone declined 13% year-on-year. Meanwhile, LCV and pickup sales surged 73%, indicating growing demand from commercial users and businesses.

Industry analysts believe the decline in passenger car sales was largely the result of a high comparison base, as many buyers had accelerated purchases in June 2025 before tax incentives for small-engine vehicles expired.

The month also witnessed rising demand for hybrid and plug-in hybrid vehicles, with consumers rushing to buy ahead of higher taxes introduced in the new federal budget.

Leading Automakers Continue to Grow

Pak Suzuki maintained its position as Pakistan’s largest automobile manufacturer, recording sales of 94,848 vehicles, an increase of 30% over the previous year.

Indus Motor Company delivered 44,646 units, supported by strong demand for its Corolla, Yaris, Corolla Cross, Fortuner, and IMV lineup.

Honda Atlas posted one of the strongest performances among established manufacturers, with sales jumping 53% to 28,015 units. The company’s City, Civic, BR-V, and HR-V models all contributed to this growth.

Sazgar Engineering emerged as the fastest-growing passenger vehicle manufacturer, with four-wheel vehicle sales soaring 77% to 19,179 units. The popularity of its Haval H6 Plug-in Hybrid, Tank SUV, and other models played a significant role in this impressive performance.

Hyundai also reported positive results, increasing sales by 18% to 12,937 units.

Consumer Preferences Continue to Shift

Demand was particularly strong for vehicles equipped with larger engines. Sales of models above 1,000cc increased 50% to 80,730 units, while vehicles below 800cc registered a 31% increase to 69,605 units.

In contrast, the 800cc to 1,000cc category experienced a slight 2% decline, suggesting buyers are gradually moving toward either entry-level budget vehicles or more premium offerings, including SUVs and hybrid models.

Positive Outlook for FY2026-27

Industry experts expect Pakistan’s automotive market to maintain its upward trajectory in FY2026-27, with projected growth of around 20%.

Lower financing costs, stable pricing, improving macroeconomic conditions, and increasing competition among manufacturers are expected to support vehicle demand. At the same time, consumers may benefit from additional discounts, promotional offers, and flexible financing packages as automakers compete for market share.

However, the industry also faces several challenges. Reduced import duties could increase competition from imported vehicles, potentially affecting local manufacturers’ sales and profitability. In addition, revised tax policies on hybrid and plug-in hybrid vehicles may slow the rapid growth witnessed in these segments.

Conclusion

Pakistan’s automobile industry has demonstrated remarkable resilience by achieving a second consecutive year of strong growth. Rising consumer confidence, easier access to financing, and expanding product choices have fueled higher sales across nearly every vehicle category. While policy changes and increased competition remain important factors to watch, the sector appears well-positioned for continued expansion in the coming fiscal year.

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The announcement was made by SBP Governor Jameel Ahmad during the Pakistan Banking Summit 2026, where he highlighted the need for banks to play a larger role in financing productive sectors of the economy. According to the governor, greater access to credit for SMEs, agriculture, and affordable housing is essential for creating jobs, increasing exports, and building a more resilient economy.

SMEs at the Heart of Economic Growth

Small and medium-sized businesses form the backbone of Pakistan’s economy, contributing to employment, innovation, and industrial development. However, many of these businesses continue to struggle with limited access to formal financing. The SBP believes that improving credit availability will enable SMEs to expand operations, invest in technology, and contribute more effectively to economic growth.

Although SME financing has shown encouraging progress in recent years, the governor noted that much more needs to be done. Outstanding financing to SMEs has more than doubled since 2021, while the number of businesses receiving bank loans has grown by approximately 75 percent. Even so, the financing gap remains substantial.

A New Strategy for Sustainable Lending

Rather than relying solely on government-directed lending, the SBP plans to encourage banks through a combination of regulatory reforms, digital innovation, and risk-sharing initiatives.

Several programs are already supporting this objective, including the SME Asaan Finance Scheme, the Risk Coverage Scheme for SMEs, and the Prime Minister’s Youth Business and Agriculture Loan Scheme. These initiatives are designed to reduce lending risks while making financing more accessible for small businesses.

The central bank has also introduced regulatory changes that simplify loan procedures, increase financing limits, and allow banks greater flexibility in offering clean financing. Financial institutions are being encouraged to collaborate with fintech companies and adopt modern lending models such as digital supply chain financing and cash flow-based lending that use alternative data instead of depending primarily on traditional collateral.

Banks Encouraged to Develop Tailored Products

The SBP has urged commercial banks to move beyond standardized lending practices and develop financial products that match the specific needs of different industries. Since SMEs and agricultural businesses often have unique cash flow cycles, customized financing solutions can help improve repayment capacity while expanding access to credit.

The governor also emphasized that banks should gradually reduce their dependence on government-backed schemes and strengthen their own lending capabilities through innovation and better risk assessment.

Documentation Remains a Major Challenge

One of the biggest obstacles to expanding SME financing is the lack of proper documentation among many businesses. Banking leaders noted that informal enterprises often face difficulties obtaining loans because they lack financial records and tax registration.

Improving business documentation and encouraging greater participation in the formal economy will not only help enterprises secure financing but also strengthen Pakistan’s overall financial system.

Digital Banking Driving Financial Inclusion

The SME financing initiative is closely linked with SBP’s broader Vision 2028, which focuses heavily on digital transformation. Pakistan has witnessed rapid growth in digital banking, with more than 92 percent of retail financial transactions now taking place through digital channels.

The expansion of financial accounts, widespread adoption of Raast IDs, and the digitization of government payments demonstrate how technology is reshaping the country’s financial landscape. Digital banking is expected to make lending faster, more transparent, and accessible to businesses across Pakistan.

Investing in Technology and Human Capital

Industry leaders also stressed the importance of continued investment in technology and workforce development. As banking services become increasingly digital, financial institutions must strengthen cybersecurity, improve data management, and build customer trust.

Greater investment in innovation, ethical banking practices, and customer-focused services will be critical as banks work toward achieving the ambitious SME financing targets.

Positive Economic Conditions Support Growth

The central bank believes the current macroeconomic environment provides a solid foundation for expanding financial services. Moderating inflation, improving economic growth, a current account surplus, and stronger foreign exchange reserves have created conditions that could encourage increased private-sector lending.

If successfully implemented, the SBP’s strategy has the potential to transform Pakistan’s SME sector by providing thousands of businesses with improved access to finance. Increased lending can stimulate entrepreneurship, create employment opportunities, enhance exports, and contribute to long-term economic stability.

As Pakistan moves toward Vision 2028, collaboration between the central bank, commercial banks, fintech companies, and entrepreneurs will be essential to turning these ambitious goals into meaningful economic progress.

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Making It Easier to Incorporate

One of the biggest obstacles for many small and medium-sized businesses has been the perception that incorporation is complicated and time-consuming. To address this, the SECP is introducing a more business-friendly compliance framework that simplifies registration procedures, cuts unnecessary paperwork, and expands digital services. These measures are designed to make the transition from an informal business to a registered company more accessible.

Why Corporatization Benefits Businesses

Operating as a registered company offers several long-term advantages. A formal corporate structure improves governance, establishes clearer management practices, and increases credibility with customers, investors, and financial institutions.

For family-owned businesses, corporatization can also provide a smoother path for succession planning and long-term continuity. Well-defined governance structures help reduce uncertainty and make it easier to attract investment, secure financing, and build partnerships.

Improving Access to Finance

Many businesses struggle to obtain funding because they operate outside the formal corporate framework. Registered companies generally have better access to bank financing, equity investment, and other financial opportunities. Strong financial records and transparent reporting can also increase investor confidence, enabling businesses to pursue expansion plans more effectively.

Building a Stronger Investment Culture

The SECP is also encouraging entrepreneurs and young investors to participate more actively in Pakistan’s capital markets. Informed investment decisions not only help individuals build wealth but also provide businesses with access to much-needed capital. A broader investor base can strengthen financial markets and support economic development across the country.

Digital Transformation and Regulatory Reform

The regulator’s ongoing focus on digital services reflects a broader effort to modernize Pakistan’s corporate environment. Online registration, digital compliance processes, and simplified regulatory requirements can reduce costs, save time, and improve the overall ease of doing business.

Such reforms are particularly important for startups and small businesses that often have limited resources and need efficient regulatory systems to support their growth.

Looking Ahead

Encouraging businesses to formalise is about more than meeting regulatory requirements. It is about creating stronger, more resilient enterprises that can compete effectively, attract investment, and contribute to national economic growth.

By simplifying compliance and promoting greater participation in the corporate and capital markets, the SECP is laying the groundwork for a more transparent, inclusive, and competitive business environment. If businesses embrace these opportunities, the benefits could extend beyond individual companies to the wider economy through increased investment, job creation, and sustainable growth.

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The meeting reflected a shared vision of transforming a relationship rooted in history and mutual trust into one driven by economic growth and business collaboration.

A New Phase of Economic Cooperation

One of the key outcomes of the discussions was the renewed commitment to achieving the $5 billion trade target. Although trade between the two countries has grown over the years, both governments believe there is significant untapped potential that can be unlocked through stronger commercial partnerships and improved market access.

To support this objective, officials agreed to continue negotiations aimed at expanding the Pakistan–Türkiye Preferential Trade Agreement. A broader agreement could reduce trade barriers, encourage exports, and make it easier for businesses from both countries to enter new markets.

Focus on Investment and Industrial Development

Investment emerged as another major priority during the talks. Türkiye plans to encourage more of its companies to invest in Pakistan, particularly in manufacturing and industrial projects.

A major proposal under discussion is the development of a Special Economic Zone (SEZ) in Karachi dedicated to Turkish businesses. The project is expected to provide investors with a business-friendly environment while creating employment opportunities and promoting industrial growth in Pakistan.

The leaders expressed confidence that greater private-sector participation would strengthen economic ties and generate long-term benefits for both countries.

Expanding Cooperation Beyond Trade

While trade remains a central focus, Pakistan and Türkiye are also looking to broaden cooperation across several strategic sectors.

Defence production continues to be one of the strongest areas of collaboration, with both countries already working together on joint projects. In addition, the two governments agreed to explore new opportunities in energy, transportation, information technology, and critical minerals.

These industries are expected to play an important role in supporting innovation, infrastructure development, and sustainable economic growth in the years ahead.

Shared Vision on Regional Issues

The discussions also covered regional and international developments. President Erdoğan praised Pakistan’s diplomatic efforts in promoting dialogue and reducing regional tensions, emphasizing that peaceful engagement remains essential for lasting stability.

Prime Minister Shehbaz Sharif reaffirmed Pakistan’s support for Türkiye on issues of national importance, while expressing appreciation for Ankara’s consistent backing of Pakistan on international forums. The leaders agreed to continue close coordination on matters affecting regional peace and global cooperation.

A Friendship Built on History

The relationship between Pakistan and Türkiye extends far beyond politics and economics. It is built upon centuries of shared cultural, religious, and historical connections.

Prime Minister Shehbaz highlighted the enduring friendship between the two nations, recalling Türkiye’s unwavering support during difficult times, including natural disasters and humanitarian crises. He also acknowledged the Turkish government’s contributions to rebuilding schools, hospitals, and other public facilities in Pakistan following devastating floods and earthquakes.

Such acts of solidarity have reinforced the deep trust that exists between the people of both countries.

Looking Ahead

The latest meeting demonstrates a strong commitment from both governments to deepen economic engagement and create new opportunities for businesses and investors. By focusing on trade expansion, industrial investment, technological collaboration, and strategic partnerships, Pakistan and Türkiye aim to build a more dynamic and mutually beneficial relationship.

If the commitments announced during the visit are translated into concrete actions, both countries stand to benefit from increased trade, stronger investment flows, and closer cooperation across a wide range of sectors. As Pakistan and Türkiye continue to work together, their partnership has the potential to become an important example of regional economic collaboration built on decades of friendship and shared aspirations.

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One of the biggest contributors to this success was Motor Vehicle Tax, which generated Rs3.38 billion, significantly higher than the target of Rs2.75 billion. This impressive performance resulted in a recovery rate of 123 percent, making it the division’s largest source of revenue during the fiscal year.

The department also recorded excellent results in Excise Duty, collecting Rs150 million against a target of Rs122.5 million, representing 122 percent recovery. These figures highlight the effectiveness of the department’s revenue collection strategy and the commitment of its field teams.

While some tax categories exceeded expectations, others fell short of their assigned goals. Property Tax collections reached Rs1.64 billion, achieving 83 percent of the target, while Luxury House Tax reached 96 percent recovery with collections of Rs71 million. Meanwhile, Professional Tax and Highway Tax recorded recovery rates of 65 percent and 68 percent, respectively, indicating areas where further improvements can be made.

District-level performance was equally encouraging. Vehari and Khanewal emerged as the top-performing districts, each recording a recovery rate of 107 percent. Multan achieved 104 percent, while Lodhran completed the fiscal year with 103 percent, ensuring that every district in the division exceeded its overall revenue target.

Department officials credited this success to the dedication of Excise and Taxation Officers, inspectors, and supporting staff who worked collectively throughout the year. They also emphasized that taxpayer confidence has increased due to the Punjab government’s business-friendly policies and the department’s efforts to make tax services more accessible.

A major factor behind the improved performance has been the introduction of digital reforms. Online services and transparent tax assessment systems have simplified payment procedures, reduced unnecessary delays, and made the taxation process more convenient for citizens and businesses alike. These initiatives have encouraged greater voluntary compliance and strengthened trust between taxpayers and the department.

Looking ahead, the Excise Department plans to continue expanding citizen-focused services while maintaining transparency and efficiency. Officials have reaffirmed their commitment to treating taxpayers professionally and respectfully, alongside taking firm legal action against individuals and businesses that deliberately evade taxes.

The department has also encouraged citizens to clear any outstanding tax liabilities on time, noting that higher tax revenues play a vital role in supporting public services and development projects across the region.

The strong performance in FY2025–26 demonstrates that a combination of effective administration, technological innovation, and taxpayer cooperation can significantly improve revenue collection. As digital reforms continue to evolve, Multan Division is well-positioned to build on this momentum and further strengthen its contribution to Punjab’s economic development.

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Billions in Question

According to the audit, the reported irregularities span several areas of the ministry’s operations. The largest concerns involve over Rs2.1 billion linked to cash collections and funds maintained in unauthorized private bank accounts. Auditors also identified more than Rs508 million in spending that exceeded approved budget allocations, around Rs117 million related to procurement issues and vendor overpayments, and over Rs821 million in questioned expenditures at Pakistan’s foreign missions.

In addition, the audit states that approximately Rs84.6 million may be recoverable through official proceedings.

Budget Overspending Raises Concerns

The report notes that while the ministry’s headquarters finished the fiscal year with modest savings under one budget grant, overseas missions exceeded their approved allocation by more than Rs508 million under another grant. Auditors concluded that this excess spending had not received the required authorization.

Questions Over Apostille Fee Collections

One of the most significant findings relates to the collection of apostille certification fees. Auditors state that the ministry increased service charges for various document categories without obtaining the necessary statutory approval or clearance from the Finance Division.

The report further alleges that courier companies collected nearly Rs956 million in cash from applicants, with the funds reportedly remaining in private bank accounts instead of being deposited promptly into the Federal Treasury. Auditors also questioned two privately held accounts containing over Rs1.14 billion, saying they lacked the required government approval.

Procurement Process Under Review

The audit also highlights concerns regarding procurement procedures. It questions the outsourcing of apostille courier services to private firms without open competitive bidding, including the selection of a newly established company that reportedly lacked a formal business profile and sales tax registration.

Another observation focuses on an Rs86 million agreement awarded to the National Information Technology Board without what auditors describe as a transparent tendering process. The report also raises concerns about a Rs200 per-document transaction fee charged under the arrangement.

Overpayments During International Summit

Auditors examined expenditures related to the 23rd Shanghai Cooperation Organization (SCO) Summit and reported that an events management company claimed more than it was entitled to receive. The report identifies an alleged excess claim of Rs14.47 million and recommends recovering additional unpaid taxes associated with the contract.

Spending at Overseas Missions

Several observations relate to Pakistan’s diplomatic missions abroad. The audit questions millions of dollars spent on health insurance premiums and medical reimbursements without a standardized government-approved policy.

It also highlights expenditures on leased official vehicles at missions in cities including Houston, Los Angeles, Chicago, and Belgrade, arguing that these arrangements conflicted with existing federal restrictions.

Additional findings include litigation expenses incurred by Pakistan’s mission in Geneva in connection with a personal employment dispute, as well as alleged financial losses involving a rental arrangement at the embassy in Havana. Auditors also flagged various payments for medical treatment and educational subsidies across missions in Europe and Asia that they believe require further review.

Weak Internal Controls

Beyond the financial figures, the audit points to broader governance issues within the ministry. It notes that hundreds of audit observations accumulated over several years remain unresolved, with the ministry’s compliance rate standing at only 43 percent.

The report cites missing records, weak financial controls, suspected overpayments, and instances where auditors were unable to verify transactions due to incomplete documentation.

What Happens Next?

The Departmental Accounts Committee has instructed the Ministry of Foreign Affairs to conduct detailed fact-finding inquiries, seek formal approval where expenditures require regularization, and recover public funds wherever financial losses or overpayments are confirmed.

It is important to note that audit observations represent findings that require explanation or further examination. They do not, on their own, establish legal liability or misconduct. The ministry will have an opportunity to respond to the audit, and any subsequent investigations or decisions by oversight authorities will determine the final outcome.

The audit nevertheless highlights the importance of strong financial oversight, transparent procurement, and effective internal controls in managing public resources. As the review process continues, the findings are likely to remain a significant topic of discussion regarding accountability and governance within Pakistan’s public sector.

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Over the course of the fiscal year, 43,559 new companies were incorporated, representing a 24% increase compared with the previous year. This remarkable growth has expanded Pakistan’s corporate landscape to 301,615 registered companies, reflecting increasing participation in the formal economy.

The momentum was especially noticeable at the end of the fiscal year. In June 2026, the SECP registered 4,323 new companies, the highest number ever recorded in a single month. The record-breaking performance suggests that business formation remained strong despite ongoing economic challenges.

Regional Growth Shows Wider Business Activity

Punjab continued to dominate in terms of new business registrations, accounting for 22,364 newly incorporated companies during the year. Sindh followed with 6,691 registrations, while Khyber Pakhtunkhwa added 3,820 companies to the national total.

Among the smaller regions, Gilgit-Baltistan stood out with exceptional growth. The region recorded 1,585 new companies, marking a 65% increase over the previous fiscal year—the highest growth rate in the country. Balochistan also posted encouraging results, registering 759 companies, up 36% year-on-year.

The broad regional growth indicates that entrepreneurship is expanding beyond Pakistan’s traditional business centers, with more individuals opting to formalize their ventures.

Trading Remains the Largest Business Category

The trading sector emerged as the leading contributor to new company registrations, accounting for 41% of all businesses incorporated during the fiscal year. This reflects the continued importance of commerce and distribution in Pakistan’s economy.

Meanwhile, registrations of public sector companies also increased by 25%, indicating continued institutional development alongside private-sector expansion.

Foreign Investors Continue to Expand Their Presence

International investors also demonstrated confidence in Pakistan’s business environment. During FY2025-26, 1,014 companies were registered with foreign investment, together representing a paid-up capital of Rs2.5 billion.

According to the SECP, overseas investors showed the greatest interest in the trading, mining, and information technology sectors. Chinese investors established the largest number of companies among foreign participants, while investors from the United States, United Kingdom, Germany, Canada, and Spain also launched businesses in Pakistan.

The growing presence of foreign-owned companies reflects sustained interest in sectors with long-term growth potential and highlights Pakistan’s appeal as an investment destination for selected industries.

A Positive Sign for the Economy

The record-breaking number of company registrations signals continued progress in expanding Pakistan’s documented business sector. A larger corporate base can strengthen economic activity by improving tax compliance, creating employment opportunities, encouraging innovation, and attracting additional investment.

Although businesses continue to face challenges such as inflation, financing costs, and regulatory hurdles, the latest SECP data suggests that entrepreneurial confidence remains resilient. If accompanied by supportive economic reforms and a stable policy environment, this momentum could help drive broader economic growth and strengthen Pakistan’s private sector in the years ahead.

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During a meeting chaired by Finance Minister Senator Muhammad Aurangzeb, the committee approved the provision of 175,000 tonnes of indigenous wheat from the 2026-27 crop for military use. The move follows recommendations from the Ministry of Defense, which highlighted that wheat flour is a staple food for soldiers and plays a vital role in maintaining their nutrition, particularly for personnel serving in challenging environments such as glaciers, deserts, and remote operational areas.

According to defense officials, flour prepared from imported wheat did not meet expectations in terms of taste, texture, and the overall quality of chapatis served to troops. These concerns prompted the military to seek a return to fresh local wheat, which is considered better suited to the dietary preferences and nutritional needs of soldiers.

The shift is expected to bring financial benefits as well. Estimates presented to the ECC indicate that relying entirely on locally produced wheat could reduce spending on imported grain by nearly Rs2.8 billion, easing pressure on government resources while supporting domestic agricultural production.

The meeting also reviewed a financial sustainability and governance proposal submitted by Quaid-i-Azam University in Islamabad. However, the committee decided not to approve the plan in its current form. Instead, university officials were asked to work with independent financial experts to develop a more practical strategy that would strengthen the institution’s finances without affecting its academic standards or day-to-day operations.

Alongside these decisions, the ECC endorsed amendments to Pakistan’s Import Policy Order, 2022, to bring the country’s import regulations into line with international labour standards. The committee also formally approved previously announced measures related to the closure of the Pakistan Agricultural Storage and Services Corporation (PASSCO), including compensation for employees and the disposal of wheat stocks damaged during floods.

The approval of fresh local wheat for the armed forces signals a policy shift that balances quality, cost savings, and support for local farmers. At the same time, the committee’s stance on Quaid-i-Azam University’s financial plan shows its emphasis on ensuring that long-term reforms are both financially sound and academically sustainable. Together, these decisions highlight the government’s broader effort to improve efficiency, reduce unnecessary costs, and strengthen key public institutions.

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According to the Corporate Social Responsibility Report 2025 released by the Overseas Investors Chamber of Commerce and Industry (OICCI), its member companies collectively invested Rs15 billion in social development initiatives during fiscal year 2025. This represents a 10% increase compared to the previous year and reflects the growing commitment of international businesses to Pakistan’s long-term development.

Reaching Millions Across Pakistan

The report reveals that CSR projects implemented by OICCI member companies positively impacted more than 44 million people nationwide. These initiatives covered a wide range of sectors and were carried out in partnership with approximately 270 civil society organizations, demonstrating the value of collaboration between the private and non-profit sectors.

In addition, employees from member companies contributed over 13 million volunteer hours, highlighting that corporate responsibility extends beyond financial contributions to include active community engagement.

Healthcare Remains the Top Priority

Healthcare received the largest share of CSR funding, with Rs6.5 billion allocated to projects aimed at improving public health. These initiatives included free and subsidized medical treatment, hospital infrastructure development, maternal healthcare services, and mental health awareness programs.

Collectively, these healthcare efforts reached more than 19 million people, making health and well-being the primary focus of corporate social investment during the year.

Supporting Disaster Recovery

Pakistan continues to face climate-related challenges, including severe flooding in recent years. Recognizing this need, OICCI member companies dedicated Rs4.5 billion to flood relief and rehabilitation activities.

These funds supported emergency assistance, rebuilding efforts, and community recovery programs, helping affected families and communities restore their livelihoods.

Investing in Education and Skills

Education remained another key area of investment, with Rs1 billion directed toward scholarships, digital education, vocational training, and improvements to school infrastructure.

These initiatives benefited nearly 900,000 individuals, equipping students and young professionals with opportunities to enhance their knowledge and develop valuable skills for the future.

Tackling Poverty Through Sustainable Programs

To help improve livelihoods, companies invested Rs645 million in poverty reduction initiatives. These projects focused on income generation, microfinance, and social protection measures, benefiting more than 1.2 million people.

Rather than offering only short-term assistance, many programs aimed to create lasting economic opportunities for vulnerable communities.

Nationwide Impact

CSR activities were implemented throughout Pakistan, ensuring that support reached communities across different regions. While Sindh and Punjab accounted for nearly half of all interventions, substantial efforts were also carried out in Khyber Pakhtunkhwa, Balochistan, Gilgit-Baltistan, and Azad Jammu and Kashmir.

This broad geographical coverage reflects an effort to distribute development initiatives beyond major urban centers.

Aligning with Global Development Goals

The report notes that many CSR initiatives were designed to support the United Nations Sustainable Development Goals (SDGs), particularly those related to good health, quality education, and poverty reduction.

Member companies also continued investing in environmental sustainability through projects focused on clean energy, responsible resource management, water conservation, and environmentally responsible business practices. These initiatives complement Pakistan’s broader environmental and ESG objectives.

Looking Ahead

The findings of the CSR Report 2025 demonstrate that foreign investors are playing an increasingly meaningful role in Pakistan’s social and economic development. By directing resources toward healthcare, education, disaster recovery, poverty alleviation, and environmental sustainability, these companies are contributing not only to economic growth but also to improving the quality of life for millions of Pakistanis.

As businesses continue to integrate social responsibility into their operations, partnerships between the private sector, government, and civil society will remain essential in building a more resilient, inclusive, and sustainable future for Pakistan.

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Rather than introducing an abrupt overhaul, the plan focuses on a carefully managed transition that seeks to preserve financial stability, protect investors, and maintain confidence in both domestic and international markets.

A Gradual Transition Instead of a Sudden Shift

The government’s roadmap is based on the Federal Shariat Court’s 2022 ruling and the constitutional timeline that requires the elimination of Riba before January 1, 2028.

Recognizing the complexity of Pakistan’s financial system, policymakers have chosen a phased approach. Existing agreements, including government debt, bank loans, and other financial contracts, will continue under their original terms until they mature. This ensures that contractual obligations remain intact while providing sufficient time for institutions to adapt.

New Financing Will Follow Islamic Principles

Beginning in 2028, the government intends to raise new domestic financing primarily through Shariah-compliant instruments, with Sukuk expected to become the cornerstone of public borrowing.

This shift represents a major change in the way the government finances its spending. Conventional debt will gradually be replaced as existing obligations mature, allowing the transition to take place without disrupting financial markets.

For international financing, Pakistan will also prioritize Islamic financing wherever practical. However, the strategy acknowledges that access to global Islamic capital markets may sometimes be limited, meaning conventional external financing could still be considered when necessary.

Banking Sector Set for Transformation

Pakistan already has a growing Islamic banking industry, which now represents a substantial portion of the country’s banking assets, deposits, and financing.

The new strategy anticipates that most local financial institutions will eventually convert into fully Shariah-compliant institutions, provided the necessary legal, regulatory, and operational frameworks are in place.

Banks with majority foreign ownership, however, will not be required to convert immediately. Instead, they will make independent decisions based on their own business strategies and regulatory considerations.

Building the Infrastructure for Islamic Finance

A successful transition requires more than simply replacing financial products. The government is also working on strengthening the entire Islamic financial ecosystem.

One of the most important initiatives is the creation of an Assets Registry Company, which will maintain a record of government-owned assets that can support future Sukuk issuances. These assets will remain available for government use while serving as the underlying foundation for Islamic securities.

The government has also introduced a hybrid Sukuk structure designed to expand its borrowing capacity and provide investors with additional Shariah-compliant investment opportunities.

Monetary Policy Will Also Evolve

The State Bank of Pakistan is reviewing its monetary policy framework to ensure it aligns with Islamic financial principles while continuing to fulfill its primary responsibility of maintaining price stability.

Several Shariah-compliant liquidity management tools have already been introduced, including facilities that allow Islamic banks to access short-term liquidity. Additional instruments will be implemented as more government Sukuk become available.

Legal and Regulatory Reforms

Transitioning an entire financial system requires extensive legal reform.

Authorities have already completed much of the review of banking legislation, while work continues on updating remaining financial laws. Regulators are also revising supervisory frameworks to ensure they fully comply with Shariah principles before the 2028 deadline.

These reforms aim to create a regulatory environment that supports Islamic finance without compromising financial stability or investor protection.

Preparing Financial Institutions and Professionals

Beyond legal reforms, the strategy emphasizes education and capacity building across the financial sector.

Training programs are being developed for bankers, regulators, company directors, auditors, government officials, academics, journalists, and Shariah scholars. The objective is to ensure that professionals across the industry possess the knowledge required to operate effectively within an Islamic financial system.

Technology readiness has also been assessed, with many banks already possessing the systems needed to offer Islamic banking products through existing Islamic banking windows.

The Biggest Challenge Ahead

Among all the reforms outlined in the strategy, the conversion of Pakistan’s existing public debt remains the most significant challenge.

Replacing conventional government debt with Shariah-compliant instruments requires a sufficient pool of eligible assets, regular Sukuk issuance, and a well-developed Islamic money market. Successfully achieving these objectives will be essential for the overall transition.

Looking Ahead

Pakistan’s post-2027 financial strategy represents a long-term structural reform rather than an overnight transformation. By honoring existing commitments while gradually expanding the use of Islamic financial instruments, the government hopes to achieve constitutional objectives without creating unnecessary disruption to the economy.

The success of this ambitious initiative will depend on coordinated efforts by policymakers, regulators, financial institutions, and market participants. If implemented effectively, Pakistan could emerge with one of the world’s largest fully Shariah-compliant financial systems, setting an important example for other countries exploring similar reforms.

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The revised rates have been introduced through the Punjab Finance Act 2026 and apply to both dine-in and takeaway orders at restaurants across the province.

What Has Changed?

Customers who choose to pay using debit cards, credit cards, mobile wallets, or QR code payments will now be charged an 8% sales tax instead of the previous 5%. Although this represents a tax increase for digital transactions, it still offers a lower tax burden than paying with cash.

The updated tax structure is as follows:

• Digital payments (cards, mobile wallets, QR codes): 8% sales tax
• Cash and other non-digital payments: 16% sales tax

Why the Change?

The Punjab government has introduced this revision as part of its revenue measures for the new fiscal year. While the concession on digital payments has been reduced, the lower tax rate continues to serve as an incentive for consumers to use electronic payment methods.

Digital transactions are generally easier to document and track, helping improve transparency in business operations and reducing the size of the informal economy. By maintaining a tax difference between digital and cash payments, the government aims to continue encouraging the adoption of formal payment channels.

Impact on Consumers

Restaurant customers who regularly pay through digital methods will notice a slight increase in their overall bill due to the higher tax rate. However, they will still pay significantly less sales tax than those opting for cash payments.

For example, on a restaurant bill of Rs. 10,000 before tax:

• A customer paying digitally will pay Rs. 800 in sales tax.
• A customer paying in cash will pay Rs. 1,600 in sales tax.

This means digital payments continue to provide a meaningful tax advantage despite the revised rate.

Looking Ahead

The increase in the digital payment sales tax reflects the government’s effort to balance revenue generation with its long-term objective of promoting electronic transactions. Although the gap between digital and cash payment tax rates has narrowed, digital payments remain the more tax-efficient option for restaurant customers in Punjab.

As businesses and consumers adapt to the updated tax policy, the move is expected to support continued growth in digital payments while contributing to provincial revenue collection.

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The inspection highlights the importance both countries place on maintaining secure and reliable international air travel.

Security Assessment Begins in Lahore

The delegation, representing the UK’s Department for Transport (DfT), reached Pakistan on Sunday and is scheduled to begin its inspections at Allama Iqbal International Airport in Lahore. The review will examine the airport’s security arrangements and operational procedures to ensure they align with international aviation requirements.

After completing the Lahore assessment, the team will travel to Islamabad International Airport to conduct a similar inspection.

Purpose of the Visit

The primary objective of the audit is to evaluate whether airport security systems continue to meet the standards required for direct passenger flights between Pakistan and the United Kingdom.

Officials are expected to review several aspects of airport operations, including passenger screening, baggage security, access control, emergency response procedures, and overall compliance with international aviation safety protocols.

These evaluations are a routine part of international aviation oversight and help ensure that airports remain prepared to handle international traffic safely.

Why the Inspection Matters

Aviation security reviews are essential for protecting passengers, airline staff, and airport infrastructure. Regular inspections by international partners help identify areas that may require improvement while ensuring that existing security measures remain effective.

For Pakistan, maintaining internationally accepted security standards is crucial for supporting direct air connectivity with the UK. Strong compliance with global aviation requirements can also enhance confidence among airlines, regulators, and travelers.

Strengthening Bilateral Aviation Cooperation

The visit reflects continued cooperation between Pakistan and the United Kingdom in the field of civil aviation. By working together on security assessments and operational standards, both countries aim to facilitate safe and efficient travel for thousands of passengers who fly between the two nations each year.

Once the inspections at Lahore and Islamabad airports are completed, the British delegation is expected to prepare its findings for review by the relevant UK authorities. The results will contribute to ongoing evaluations of aviation security arrangements for direct flight operations.

Overall, the audit represents a routine but significant step toward ensuring that international air travel between Pakistan and the United Kingdom continues to meet globally recognized safety and security standards.

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