The IMF review will cover Pakistan’s progress under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF). A successful review would strengthen confidence in Pakistan’s economic reforms and reduce the risk of delays in future programmed support.

Fiscal Challenges Remain

Despite progress on IMF targets, Pakistan faces growing fiscal pressure in FY27. AHL expects the fiscal deficit to increase to 3.9% of GDP, compared with 2.6% in FY26.

Interest payments are expected to rise sharply to around Rs8.5 trillion, up 22% from the previous year. Higher borrowing costs and increased government spending could make fiscal management more difficult.

Tax collection is another concern. The Federal Board of Revenue missed its FY26 target by around Rs1.1 trillion, raising questions about whether revenue targets for FY27 can be achieved.

Inflation and External Pressures

Inflation is projected to average 8.22% in FY27, with the annual rate potentially reaching nearly 9.5% early in the year before easing later.

Pakistan’s current-account deficit is also expected to widen to 0.78% of GDP, mainly because imports are projected to grow faster than exports. However, record workers’ remittances remain an important source of support, reaching $41.6 billion in FY26.

Oil prices will be particularly important. Higher global energy prices could increase inflation and put additional pressure on Pakistan’s external account.

Growth and Investor Confidence

AHL forecasts Pakistan’s GDP growth at 3.84% in FY27, slightly above the 3.70% recorded in FY26. Growth is expected to be led by industry, while agriculture could face challenges from weaker-than-targeted wheat production.

Pakistan has also received a boost from international rating agencies. S&P and Moody’s recently upgraded the country’s credit ratings, while Fitch maintained its existing rating. The successful launch of Pakistan’s first Panda Bond also signals improving access to international capital markets.

The Road Ahead

The September IMF review is likely to focus more on Pakistan’s consistency in implementing reforms than on introducing new commitments. While the country appears well placed to clear the review, FY27 will be a tougher test.

Pakistan now needs to control inflation, improve tax collection, manage rising interest costs and protect its external reserves while maintaining economic growth.

The immediate IMF outlook is encouraging, but the real challenge will be turning recent economic stability into sustainable long-term growth.

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The initiative is aimed at removing unnecessary paperwork, reducing repeated verification procedures and making it significantly quicker for individuals to start investing.

Under the new framework, investors applying for Sehl/Sahulat accounts can expect their applications to be processed within one working day, while applications for Normal Accounts are targeted for completion within two working days.

A More Convenient Way to Start Investing

The new system, introduced through Circular No. 19 of 2026, establishes common onboarding requirements for a range of regulated financial institutions, including securities brokers, asset management companies, insurers and other market participants.

Previously, investors could face repeated documentation and verification requirements when dealing with different financial institutions. The new framework seeks to address this issue by allowing eligible institutions and notified third parties to rely on verification that has already been completed.

This means customers may no longer need to repeatedly provide the same information or go through identical verification procedures when accessing different regulated financial services.

Digital Processing at the Centre

Technology is at the heart of the new onboarding framework. The SECP is encouraging regulated entities to use API-based systems and straight-through processing to make applications faster and more efficient.

The framework also supports completely digital onboarding, reducing the need for physical paperwork and manual processing.

Among the features being introduced are the ability to issue Unique Identification Numbers (UINs) instantly and facilitate the opening of CDC sub-accounts through digital processes.

For investors, this could translate into a smoother experience from application to market participation.

Greater Transparency for Applicants

The new framework is also designed to make the application process more transparent.

Applicants will receive a tracking ID that allows their onboarding process to be monitored. If an application contains deficiencies, the applicant must be informed within the prescribed timeframe.

Similarly, where an application is rejected, the reasons for the rejection must be communicated in writing. This provides investors with greater clarity about the status of their applications and what may need to be corrected.

SECP Targets 2.5 Million Investors

The digital onboarding initiative is part of a wider effort by the SECP to expand retail participation in Pakistan’s capital markets.

The regulator has set an ambitious goal of increasing the country’s investor base to 2.5 million people. Younger Pakistanis and first-time investors are expected to be an important focus of this expansion.

SECP Chairman Kabir Ahmed Sidhu said the objective is to use technology to remove barriers that have traditionally discouraged people from entering the investment market.

The broader vision is to create an investment environment that is easier to access, particularly for a younger generation that is increasingly accustomed to digital financial services.

What the New Framework Could Mean for Investors

For ordinary Pakistanis, the changes could make the process of entering the stock and investment markets considerably less complicated.

A faster onboarding process means new investors may be able to move from application to investment more quickly. At the same time, reduced duplication in verification could make it easier for customers who already use regulated financial services to access additional investment products.

The initiative could also help financial institutions reduce administrative work and shift more of their onboarding operations toward automated digital systems.

A Step Toward a More Inclusive Capital Market

Pakistan has significant potential to expand retail participation in its capital markets, but complicated procedures and lengthy onboarding have historically been among the obstacles facing new investors.

By introducing common digital standards and reducing unnecessary repetition, the SECP is attempting to make the market more accessible to a much larger segment of the population.

If successfully implemented across regulated institutions, the framework could represent an important shift toward a faster, more digital and investor-friendly financial ecosystem.

The ultimate test, however, will be how consistently financial institutions implement the new standards and whether the simplified process encourages more Pakistanis—particularly younger and first-time investors—to participate in the country’s capital markets.

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Led by Prince Mansour bin Mohammad Al Saud, Chairman of the Saudi-Pakistan Joint Business Council, the delegation visited the Special Investment Facilitation Council (SIFC) for discussions with Pakistani officials and business representatives.

Wide Range of Investment Opportunities

The meetings focused on sectors considered important to Pakistan’s future economic development, including energy, petroleum, privatization, manufacturing, communications and road infrastructure.

Representatives from these sectors presented potential areas for cooperation, while Saudi businessmen explored opportunities for investment and partnerships with Pakistani companies.

The discussions included both government-level and private-sector engagements, creating opportunities for Saudi investors to consider projects through Government-to-Government (G2G) as well as Business-to-Business (B2B) arrangements.

Pakistan Looks to Deepen Saudi Partnership

The visit comes at a time when Pakistan is working to strengthen its economic relationship with Saudi Arabia.

Islamabad is seeking to move beyond conventional bilateral cooperation and establish a broader strategic economic partnership that can generate long-term benefits for both nations.

Prime Minister Shehbaz Sharif has emphasized the importance of developing stronger economic ties with Riyadh. He has also expressed hope that the latest engagement will build upon previous discussions and eventually result in formal agreements and memoranda of understanding in multiple fields.

SIFC Facilitates Foreign Investment

The Special Investment Facilitation Council has emerged as a key platform for Pakistan’s foreign-investment strategy.

Its role includes connecting international investors with relevant government institutions and helping them understand available projects and investment opportunities.

For the Saudi delegation, the SIFC meetings provided a single platform to engage with officials from multiple sectors. This can make it easier for potential investors to assess projects and determine where their companies can establish partnerships or make direct investments.

Opportunities in Energy and Infrastructure

Pakistan’s energy and infrastructure sectors offer significant potential for international investors. Demand for reliable power, petroleum-related projects, modern communications and improved transportation infrastructure remains substantial.

Saudi companies with expertise and capital in these areas could potentially contribute to the development of large-scale projects while gaining access to Pakistan’s sizeable domestic market.

Investment in industries and privatization opportunities could also support Pakistan’s efforts to expand productive capacity and improve the performance of key businesses.

From Discussions to Real Investment

While the Saudi delegation’s visit reflects strong interest, the real impact will depend on how quickly discussions translate into concrete projects.

Successful implementation will require clear regulations, efficient approvals, investor-friendly policies and commercially viable projects. Turning proposed cooperation into actual investments could create employment, encourage technology transfer and strengthen Pakistan’s foreign-exchange position.

A Potential New Chapter in Bilateral Relations

The latest engagement demonstrates that Pakistan and Saudi Arabia are looking to expand their relationship through investment and business cooperation.

If the ongoing discussions result in meaningful agreements and successful projects, Saudi investment could become an important contributor to Pakistan’s economic development.

The coming months will therefore be crucial as both sides work to transform high-level meetings and investment proposals into signed agreements, financial commitments and projects on the ground.

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The initiative is aimed at addressing one of the major challenges faced by Pakistani startups: limited access to investment capital. The proposed framework is expected to create a more straightforward regulatory environment and encourage both local and international investors to put money into emerging businesses.

Creating a startup-friendly investment environment

Pakistan has a growing technology and innovation ecosystem, but many young companies struggle to secure the funding required to expand.

Traditional bank financing is often difficult for early-stage businesses because startups may not have significant assets, established revenues or a long financial history.

Venture capital can provide an alternative source of funding by allowing investors to take equity positions in promising businesses.

The proposed legislation is intended to make this type of investment easier to conduct within Pakistan.

Simplified rules for venture capital

The draft Bill proposes a dedicated regulatory structure for venture capital funds and their managers.

Rather than applying overly complicated requirements, the proposed framework would introduce relatively flexible licensing and registration procedures that reflect the risk-oriented nature of venture capital.

The legislation is also expected to establish clearer requirements for fund management, governance and reporting.

The aim is to create enough oversight to protect investors while avoiding unnecessary restrictions that could discourage investment.

Bringing more investment into Pakistan

A significant amount of startup investment involving Pakistani businesses has historically been structured through offshore arrangements or outside the country’s formal regulatory system.

The proposed framework could provide investors with a clearer domestic route for investing in Pakistani startups.

A stronger local venture capital market could also reduce the dependence of emerging businesses on foreign structures and make it easier for domestic investors to participate in the country’s startup economy.

Potential benefits for the economy

The government expects a stronger venture capital ecosystem to have benefits beyond individual startups.

Greater availability of risk capital could help innovative companies increase their operations, develop new technologies and enter new markets.

Successful startups can also generate employment and create demand for professional services, technology and other supporting industries.

In the longer term, increased startup investment could contribute to innovation and economic growth.

SECP seeks balance between flexibility and protection

SECP Chairman Dr Kabir Ahmed Sidhu has emphasized the need for a regulatory approach that recognizes the unique characteristics of venture capital.

Venture capital investments involve significant risk because investors often provide funding to businesses that are still developing their products, markets or revenue models.

The proposed framework therefore aims to reduce regulatory barriers while maintaining appropriate governance standards and investor safeguards.

Finding the right balance will be critical to the success of the new system.

Consultation with industry stakeholders

The draft legislation will now be discussed with key stakeholders before it moves toward the formal legislative process.

The consultation process is expected to include startups, venture capital managers, legal and financial experts, the State Bank of Pakistan, Pakistan Stock Exchange and industry associations.

Their feedback could help identify practical issues and improve the proposed regulatory framework before it is finalized.

What could change for startups?

If the proposed law is approved, Pakistani startups could gain access to a more organized domestic venture capital market.

A clear legal structure may encourage more investors to consider early-stage Pakistani businesses, particularly in technology and other innovation-focused sectors.

For fund managers, clearly defined rules could also make it easier to establish and operate venture capital funds within Pakistan.

The road ahead

The Venture Capital Bill remains a proposal and will need to pass through consultation and the legislative process before becoming law.

Its success will ultimately depend on more than legislation. Investors will also consider factors such as economic stability, market opportunities, currency risks and the overall business environment.

Nevertheless, the proposed framework represents a significant move toward formalizing venture capital activity in Pakistan.

If implemented effectively, it could help connect Pakistani startups with much-needed risk capital, encourage investment in innovation and create a stronger foundation for the country’s emerging entrepreneurial ecosystem.

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The clarification was issued through Sales Tax General Order No. 19 of 2026, with the aim of removing uncertainty and ensuring that the relevant sales tax provisions are applied consistently.

How will sales tax be calculated?

Under the revised mechanism, different valuation rules will apply depending on whether the goods are supplied locally or imported.

For locally manufactured goods, sales tax will be calculated on the value of supply as defined under Section 2(46) of the Sales Tax Act.

For imported goods, the calculation is different. The taxable value will be taken at 130% of the value determined under Section 25 of the Customs Act, 1969. This customs-based value will also include applicable customs duties and Federal Excise Duty.

For example, if the relevant customs value, including applicable duties and FED, comes to Rs. 1 million, the sales-tax value under this mechanism would be Rs. 1.3 million. The applicable sales tax rate would then be applied to that amount.

Who will be covered?

The revised framework applies to several categories of manufacturers, importers and retailers.

These include footwear manufacturers selling through their own FBR digitally integrated and POS-compliant retail outlets. It also covers importers supplying registered manufacturers or digitally integrated and POS-compliant retailers.

Retailers that directly import covered goods for sale to final consumers are also included within the revised framework.

In addition, the provisions apply when digitally integrated manufacturers or registered importers supply goods to corporate organizations, government departments, autonomous bodies and statutory bodies purchasing those goods for their own use.

Manufacturers that exclusively supply their products to FBR digitally integrated and POS-compliant retailers are also covered.

Why has FBR issued the clarification?

According to the FBR, the corrigendum has been issued to eliminate ambiguity surrounding the valuation and collection of sales tax under Serial No. 65.

The tax authority has also replaced the previous Annexure-A attached to the earlier general order with a revised annexure. The new annexure will serve as the basis for determining the levy, assessment and collection of sales tax on the relevant supplies.

Effective from July 1, 2026

One of the key aspects of the notification is its effective date. The revised provisions will apply retrospectively from July 1, 2026.

However, the FBR has clarified that all other provisions of the earlier Sales Tax General Order will continue to remain in force.

What does this mean for businesses?

The clarification is particularly important for businesses involved in the manufacturing, importing and retailing of goods falling under Serial No. 65.

Importers will need to pay particular attention to the revised valuation mechanism because the taxable value for imports is now linked to 130% of the customs-determined value after accounting for applicable duties and FED.

Manufacturers and retailers covered by the order should also review their invoicing, tax calculations and POS integration arrangements to ensure compliance with the revised requirements.

Overall, the FBR’s latest clarification is intended to establish a more consistent sales-tax mechanism and remove uncertainty over how covered transactions should be valued and taxed.

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One of the most notable changes is the extension of the maximum housing-finance repayment period to 30 years. The longer repayment period could make home financing more manageable for borrowers by reducing their monthly instalments, although a longer loan generally results in higher total financing costs over time.

Financing Available for More Housing Needs

Under the updated framework, banks and DFIs can provide financing for several housing-related purposes. These include purchasing a house, apartment or plot, constructing a home on an already-owned plot, and extending, renovating or expanding an existing residential property.

The rules also specifically allow financing for renewable-energy solutions installed in residential properties. This could make it easier for homeowners to invest in solar panels and other energy-related systems through formal financing.

Renewable-energy financing can have a maximum repayment period of 10 years.

Up to 90% Loan-to-Value Ratio

The revised regulations set the maximum Loan-to-Value (LTV) ratio at 90:10. In simple terms, eligible borrowers may potentially obtain financing of up to 90% of the relevant property value, while contributing the remaining portion themselves.

The actual amount approved, however, will continue to depend on the lender’s assessment of the borrower, the property and repayment capacity.

Monthly Payments Limited to 65% of Income

To control borrowers’ repayment burden, banks and DFIs must ensure that total monthly amortization payments do not exceed 65% of the borrower’s net disposable income.

This calculation includes the proposed housing-finance payment as well as payments on other consumer loans. For borrowers earning informal income, lenders may also use proxy models approved by the Pakistan Banks’ Association (PBA) when assessing income and repayment capacity.

Stronger Credit and Property Checks

The revised rules require lenders to obtain the latest credit report of each prospective borrower from the SBP’s Electronic Credit Information Bureau (e-CIB) or a licensed private Credit Information Bureau.

Banks and DFIs must also collect relevant ownership and title documents and provide borrowers with a signed acknowledgement confirming the documents received.

As a general requirement, the financed house, apartment or plot must be mortgaged in favor of the financing institution. For housing finance of up to PKR 5 million, a lien may be accepted in certain cases where the property has a Green Property Certificate or an equivalent document issued by the relevant authority.

New Valuation Requirements

The revised framework also sets specific requirements for property valuation.

For housing finance exceeding PKR 10 million, lenders must obtain a valuation from at least one valuator included on the PBA-approved panel. For financing of PKR 10 million or less, banks and DFIs may use an internal valuation process.

The regulations also provide flexibility for similar residential units located within the same housing society or colony. Where properties have the same category, layout and size, a single valuation may be used.

Security for Renewable-Energy Financing

The new framework recognizes renewable-energy equipment as potential security for financing. Solar panels, inverters and batteries installed at a housing unit may be hypothecated, alongside other forms of security acceptable to the lender.

This provision could support greater access to financing for households seeking to reduce their dependence on conventional electricity sources.

Insurance and Takaful Requirements

Banks and DFIs must ensure that financed housing units have comprehensive insurance or Takaful coverage equal to the outstanding amount of housing finance.

Borrowers must also receive clear information about the type of coverage, applicable premium rate and other related charges.

What the New Rules Mean for Homebuyers

The revised regulations could make housing finance more accessible by combining a longer repayment period with a higher maximum LTV ratio. For eligible borrowers, a 30-year tenor may help bring monthly payments within their affordability range, while the 90% LTV limit could reduce the upfront amount required for a property purchase.

At the same time, borrowers should carefully consider the overall cost of long-term financing. A lower monthly payment does not necessarily mean a lower total cost, as financing charges accumulate over a longer period.

The new framework therefore represents a significant update to Pakistan’s housing-finance landscape. By expanding eligible financing purposes, supporting renewable-energy investments and providing greater flexibility in repayment and property financing, the SBP’s revised rules could create new opportunities for households seeking to purchase, build or improve their homes.

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The proposal comes as Islamabad works to meet commitments under its programmed with the International Monetary Fund (IMF), which has repeatedly called for stronger tax collection from the agriculture sector.

September Deadline for Provinces

The federal government is expected to assess provincial progress after September 30, the deadline for meeting agricultural tax collection and return-filing targets.

Officials will reportedly use the results to determine whether the existing system is delivering sufficient revenue. If provinces fall significantly short, discussions on an alternative fixed-tax mechanism could start in October.

Such a move would potentially introduce a simpler method of collecting agricultural taxes by linking the liability to the size of farmland rather than relying entirely on declared agricultural income.

Agriculture’s Low Contribution to Tax Revenue

The issue has gained importance because of the huge difference between agriculture’s economic importance and its contribution to government revenue.

Agriculture accounts for roughly 24.5% of Pakistan’s economy, making it one of the country’s largest sectors. Yet its share of total tax revenue is estimated at only about 0.3%.

This imbalance has made agricultural taxation a recurring issue in discussions between Pakistan and the IMF. Increasing revenue from the sector could help the government broaden its tax base and improve its fiscal position.

How the Proposed Tax Could Work

Under the idea currently being considered, agricultural land could be subject to a fixed charge of up to Rs5,000 for every acre.

A per-acre system would make the tax calculation relatively straightforward. Instead of determining the exact income earned from different crops and farming activities, authorities could calculate the liability according to the area of land owned or cultivated.

However, a uniform rate could also create challenges. Farms differ considerably in terms of productivity, crops, irrigation facilities, location and profitability. A fixed amount could therefore affect farmers differently depending on their circumstances.

IMF Commitments Driving the Debate

The proposed measure reflects the government’s efforts to demonstrate progress on agricultural taxation to the IMF.

For years, Pakistan has struggled with a narrow tax base, while large parts of the economy have generated comparatively little direct tax revenue. Bringing agriculture more effectively into the tax system is therefore seen as one way to increase government receipts without relying entirely on the sectors that already pay significant amounts of tax.

The government is reportedly continuing discussions with provinces in an attempt to meet the IMF’s expectations without immediately imposing a new nationwide fixed-tax arrangement.

October Could Bring a Key Decision

The coming weeks could determine whether the fixed agricultural tax becomes a serious policy option.

If provinces succeed in meeting their revenue and compliance targets by the September deadline, the proposed Rs5,000-per-acre system may not be required. If performance remains below expectations, consultations could begin in October on a new taxation framework.

For Pakistan, the challenge will be to increase agricultural tax revenues while keeping the system practical and equitable for farmers. The final policy could have significant implications for landowners, provincial finances and the country’s broader efforts to expand its tax base.

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In July 2025, freelancers generated around $120.6 million in export receipts. The latest figures therefore represent an increase of nearly $54.9 million in foreign exchange earnings within a single month.

IT Freelancing Continues to Drive Growth

Information technology remains a major contributor to Pakistan’s freelance exports. IT-related freelance receipts climbed to approximately $106.8 million in July 2026, compared with $89.9 million during July 2025.

The continued expansion of IT freelancing highlights the growing demand for Pakistani professionals providing services such as software development, programming, web development, data-related work and other digital services to international clients.

However, the most striking growth came from the non-IT segment.

Non-IT Freelance Earnings More Than Double

Non-IT freelance earnings reached $68.7 million in July 2026, compared with just $30.7 million a year earlier. This represents growth of more than 120% over the same period.

The increase indicates that Pakistan’s freelance industry is becoming more diverse. Freelancers are increasingly earning internationally through fields beyond conventional IT, including digital marketing, graphic design, content creation, virtual assistance, writing and other professional online services.

This diversification could provide opportunities for a much larger section of Pakistan’s young workforce.

Skills Remain Critical for International Success

Industry representatives believe the momentum is encouraging, but maintaining such rapid growth will require continued investment in skills and professional development.

Pakistan Freelancers Association chairperson Ibrahim Amin has stressed that freelancers need more than technical expertise to succeed in international markets. Skills such as communication, business development, negotiation and client management can play an equally important role in building long-term relationships with overseas customers.

For students and young professionals in particular, freelancing offers a way to participate in the global digital economy without necessarily needing to relocate abroad.

Pakistan’s Broader IT Exports Also Rise

The positive freelance figures come alongside wider growth in Pakistan’s technology exports. The country recorded approximately $417 million in IT exports during July 2026, up 18% from $354 million in July 2025.

Monthly performance remained almost unchanged from June, when IT export receipts stood at around $416 million. This suggests that the technology sector entered the new fiscal year with relatively stable export momentum.

More Support Could Unlock Greater Potential

Government and private-sector initiatives aimed at developing digital skills could help Pakistan expand its pool of internationally competitive freelancers. Recognition programs and freelancer awards introduced by industry bodies are also intended to highlight the contribution of online professionals and encourage more people to enter the sector.

Nevertheless, sustaining the current pace will be the bigger challenge. A single month of strong growth does not guarantee the same performance throughout the year. Pakistan will need continued investment in training, digital infrastructure, international payment systems and market access if it wants freelance exports to become a significantly larger source of foreign exchange.

With millions of young people entering the workforce, freelancing could become an increasingly important component of Pakistan’s digital economy. The July 2026 figures provide an encouraging start, but sustaining and broadening this growth will determine how significant the sector becomes over the longer term.

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The latest figures represent a 43.13% increase from June, when textile exports stood at $1.27 billion. Compared with July 2025, exports were also higher by 8.07%, highlighting continued growth in the country’s largest export-oriented sector.

In rupee terms, textile exports amounted to approximately Rs504.34 billion during the month.

Garments and Knitwear Remain Major Export Drivers

Knitwear continued to account for the largest share of Pakistan’s textile exports. Exports of knitwear climbed 46.60% month-on-month to $533.84 million, while recording a more modest 4.06% year-on-year increase.

Readymade garments also delivered a strong performance. Their export value rose 45.87% from the previous month to $459.99 million and was 15% higher than a year earlier. The double-digit annual increase makes garments one of the stronger-performing segments of the textile sector.

Bedwear exports followed a similar trend, reaching $308.50 million, up 47.13% compared with June and 4.16% year-on-year.

Towels and Made-Up Articles Show Strong Momentum

Among the major textile categories, towels recorded the most significant monthly growth. Exports increased 60.35% month-on-month to $106.36 million and were 13.37% higher than in July 2025.

Made-up articles, excluding towels and bedwear, also posted substantial gains. Exports rose 58.51% from June to $77.21 million, representing a 10.56% annual increase.

Meanwhile, cotton cloth exports grew 26.27% month-on-month to $141.59 million. However, they remained almost unchanged on an annual basis, declining slightly by 0.10%.

Cotton yarn exports showed more moderate monthly growth, increasing 3.91% to $66.53 million. On a year-on-year basis, however, cotton yarn exports were up a healthy 18.69%.

Textile Imports Also Increase

The improvement in exports was accompanied by higher textile imports. Pakistan imported $682.21 million worth of textile products in July, compared with $647.43 million in June.

This represents a 5.37% monthly increase and a 14.82% year-on-year rise. In rupee terms, textile imports stood at approximately Rs189.93 billion.

Raw cotton remained one of the largest import categories at $186.34 million. Although raw cotton imports declined 15.37% from June, they were 30.01% higher than a year earlier.

Imports of synthetic and artificial silk yarn recorded particularly strong monthly growth, rising 43% to $125.84 million. They were also 18.42% higher year-on-year.

Worn clothing imports increased to $62.36 million, up 6.30% from June and an impressive 41.44% compared with July 2025.

Synthetic fiber imports reached $72.42 million, representing a 4.34% monthly increase. However, they were 4.02% lower on an annual basis.

A Positive Start for Pakistan’s Textile Sector

July’s figures provide an encouraging start for Pakistan’s textile industry. The strongest growth came from value-added products such as garments, knitwear, towels and made-up articles, rather than being driven solely by raw or semi-processed textile products.

The 8.07% annual increase in total textile exports is particularly important because it indicates that the sector is performing better than it did at the same time last year. Stronger garment and towel exports could also help support foreign-exchange earnings and industrial activity.

However, rising textile imports show that manufacturers are also increasing their purchases of cotton, yarn and other inputs. Whether this translates into sustained export growth will depend on international demand, production costs, energy prices, exchange-rate conditions and the competitiveness of Pakistani manufacturers.

For now, July’s $1.81 billion export figure signals renewed momentum for one of Pakistan’s most important economic sectors. If the pace of demand for value-added textile products continues, the industry could play an even greater role in boosting the country’s exports during the months ahead.

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The demonstration was conducted during an online consultation with the Karachi Tax Bar Association (KTBA). The session was part of the FBR’s continuing efforts to gather feedback from tax practitioners and improve the digital tax-filing experience.

Easier Reporting of Property and Capital

During the meeting, the FBR’s Domain Team demonstrated how taxpayers can enter information about investments in immovable property in their tax returns. The system also allows users to record more than one business capital holding and declare tax under the relevant provisions of tax law.

Another feature demonstrated during the session enables taxpayers to include inherited property in their records. FBR officials also explained that some fields in the system are optional. The vehicle chassis number, for example, does not have to be entered where the field is not mandatory.

According to the FBR team, the existing return system is operating without major technical issues or significant software defects. Questions raised by KTBA members were addressed during the demonstration, with officials providing practical explanations of how different features work.

Tax Bar Appreciates FBR’s Approach

KTBA President Mehmood Bikiya welcomed the FBR’s willingness to listen to concerns raised by tax professionals. He appreciated the authority’s efforts to make the return system more responsive and easier for taxpayers and practitioners to use.

KTBA Vice President Saud ul Hasan also praised the FBR for maintaining direct communication with the business community. Such consultations can help the tax authority identify difficulties faced by users and make practical improvements to the online filing process.

Suggestions for Future Improvements

The tax bar also presented several recommendations that could further simplify the filing process in future versions of the return system.

One major suggestion was to introduce an Excel upload option. Such a facility could make it easier for taxpayers and tax practitioners to enter large volumes of financial information without manually filling in every field.

The association also requested a review of the requirement to provide certain financial information again in the following year’s return. In addition, KTBA proposed that the system should generate a PDF containing an explanation of the relevant legal provisions concerning tax residence status.

Refunds and Assessment Matters

The discussion was not limited to technical features. KTBA representatives also raised concerns regarding the timing of refund applications, deemed assessment orders and revision of tax returns.

FBR officials explained that some of these matters are linked to existing policy and legal provisions. They specifically referred to the 15-day deemed assessment rule and said the concerns raised by the association had been sent to the FBR’s Policy Wing for review.

A More Digital and User-Friendly Tax System

The consultation demonstrates the FBR’s continued focus on improving Pakistan’s digital tax-filing infrastructure through direct feedback from practitioners.

Features for reporting property, business capital and inherited assets could make the return process more structured, while proposed additions such as Excel uploads could reduce the burden of manual data entry.

As consultations with tax professionals continue, further changes may be introduced to address practical filing issues. The broader objective is to develop a tax return system that is simpler, clearer and more convenient for taxpayers, while also improving transparency and compliance across the tax system.

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The development follows amendments to the government’s Brownfield Refineries Upgradation Policy, which has introduced a tighter timeline for refineries to move from plans to formal implementation agreements. Under the revised policy, companies have 45 days to sign their agreements with the government.

Parco Leads With Green Fuel Investment

Pak-Arab Refinery Company (Parco), one of Pakistan’s largest refining companies, has committed to a $600 million green fuel project after assessing different options for modernizing its operations.

Rather than pursuing a standalone bottom-of-the-barrel project, Parco selected a green fuel-focused approach. The company has already reduced its furnace oil production from roughly 20% to around 14% through operational improvements. Its new project is expected to bring that figure down to approximately 10–11% during the first phase, with a longer-term objective of eliminating furnace oil production altogether.

The upgrade will also move Parco completely from Euro-III to Euro-V fuel standards. Gasoline production is expected to increase from approximately 3,678 tonnes per day to more than 4,000 tonnes per day, while diesel production is also projected to rise.

PRL Plans to Double Refining Capacity

Pakistan Refinery Limited (PRL) is preparing one of the largest investment projects under the programmed, with an estimated cost of $1.8 billion to $2 billion.

The company’s proposed bottom-of-the-barrel project is designed to eliminate furnace oil production while improving the refinery’s overall product mix. More significantly, PRL plans to increase its crude processing capacity from 50,000 barrels per day to 100,000 barrels per day.

Such an expansion could significantly strengthen PRL’s ability to supply petroleum products to the domestic market while reducing the need for imports.

Attock Refinery Targets Cleaner, Higher-Value Products

Attock Refinery Limited (ARL) is also moving forward with its previously announced modernization programmed, estimated at around $600 million.

The project includes a Continuous Catalytic Reformer, improvements to its diesel hydrodesulphurization unit, a kerosene hydrotreating facility, additional storage and utility infrastructure, as well as a biofuel facility required under the revised policy.

Once completed, the upgrade is expected to enable ARL to produce Euro-V quality fuels and increase motor gasoline output by approximately 25%.

Cnergyico Eyes $1.2 Billion Expansion

Cnergyico Pakistan Limited, the country’s largest private refinery, has outlined an investment programmed of approximately $1.2 billion.

The company’s strategy involves several stages. The first focuses on producing Euro-V and Euro-VI compliant petroleum products. The second involves a bottom-of-the-barrel project, for which technical studies are being conducted. The final phase is expected to increase refining capacity and develop a new Single Point Mooring facility to support the import and export of crude oil and finished petroleum products.

Cnergyico currently has refining capacity of around 156,000 BPD and aims to increase this to approximately 200,000 BPD.

The company also expects its upgraded facilities to significantly increase gasoline and diesel production while reducing the amount of furnace oil generated during the refining process.

NRL Considering a Hybrid Upgrade

National Refinery Limited (NRL) is considering a more flexible approach through a proposed $300 million to $800 million hybrid project combining green fuel and bottom-of-the-barrel technologies.

NRL has already achieved Euro-V production for high-speed diesel, while further work is underway to determine the best configuration for motor gasoline and other products.

The proposed investment would substantially reduce furnace oil production. NRL is also considering increasing its crude refining capacity from 50,000 BPD to 70,000 BPD, although the final scope of the project has yet to be determined.

A Potential Turning Point for Pakistan’s Oil Industry

Taken together, the five projects could bring up to $5 billion in investment into Pakistan’s refining sector. The programmed represents a shift away from older refining configurations toward facilities capable of producing cleaner and more commercially valuable petroleum products.

A major objective is to reduce furnace oil production. As demand for furnace oil has declined, producing large quantities of it has become less attractive for domestic refineries. Converting more of the crude barrel into gasoline, diesel and other higher-value products could therefore improve refinery economics.

The move toward Euro-V and Euro-VI standards is another important element. Cleaner fuel production would improve the quality of petroleum products available in Pakistan and bring domestic refining operations closer to international standards.

However, the proposed investment figures should not yet be viewed as completed investments. The immediate test will be whether the refineries sign their implementation agreements within the government’s new 45-day deadline and subsequently secure financing and execute the projects.

If the plans move ahead as intended, Pakistan could see a significant expansion and modernization of its refining capacity, improved fuel quality and a more efficient domestic petroleum supply chain. The coming months will therefore be crucial in determining whether the proposed $4.5–5 billion refinery transformation becomes a reality.

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The reform agenda was discussed during a high-level meeting chaired by Federal Minister for Economic Affairs and Establishment Division Ahad Cheema. Government officials, representatives of the Public Procurement Regulatory Authority (PPRA), and members of the Construction Association of Pakistan (CAP) participated in the discussions.

A New Body for the Construction Sector

The proposed CIDB is expected to play both a developmental and regulatory role. Rather than focusing solely on oversight, the board would work with government and industry stakeholders to promote growth, introduce better standards, and encourage modern construction practices.

According to the proposal, the board would include representatives from both the public and private sectors. This structure could provide the industry with a central platform for addressing regulatory problems while improving the quality and efficiency of construction projects across Pakistan.

The government and CAP have reportedly reached a broad understanding on the need for such an institution, with the proposed framework expected to be presented to the prime minister for approval.

Longer Liability Period for Public Projects

One of the most important proposed changes concerns the Defect Liability Period (DLP) for government-funded construction projects.

Currently, the standard liability period is generally one year. The government is considering extending it to three years, with a possible future increase to five years.

The purpose is straightforward: contractors should remain responsible for the quality of their work for a meaningful period after a project is completed. A longer liability period could discourage shortcuts and poor-quality construction because contractors would remain exposed to the cost of repairing defects that emerge after completion.

For taxpayers, the measure could also help reduce the recurring problem of infrastructure requiring repairs soon after being handed over.

Consultants Could Face Greater Accountability

The proposed reforms also address an area that has received comparatively less attention in the past: the responsibility of consultants.

Under the existing framework, contractors can be penalized for failing to meet contractual requirements or delivering substandard work. However, consultants involved in project design and technical supervision may not face the same level of direct accountability.

The proposed CIDB framework could change that by bringing consultants under stronger regulatory supervision. They could potentially face legal and financial consequences when poor designs, technical errors, or professional negligence contribute to project failures.

CAP has supported the idea, arguing that greater accountability among consultants would help protect public funds and improve the accuracy of project designs.

Dedicated Bank for Construction Companies

Financing is another major concern for Pakistan’s construction sector. Industry representatives have highlighted difficulties in obtaining bank guarantees and performance guarantees, which can create obstacles for contractors bidding for and executing major projects.

In response, the government is exploring the creation of a Construction Development Bank specifically designed to meet the industry’s financial needs.

Federal authorities have asked the relevant finance officials to engage with the State Bank of Pakistan and the Pakistan Banks Association to assess whether such an institution would be practical and financially viable.

The proposal is still under consideration, meaning the creation of the bank will depend on the outcome of these consultations and a detailed feasibility assessment.

Tax and Trade Measures Also Under Consideration

The reform package goes beyond institutional changes. Authorities are also examining targeted tax measures and adjustments to import and export policies.

These changes are intended to reduce some of the financial and regulatory pressures affecting construction companies. Better access to modern machinery, technology, and imported materials could help domestic firms improve productivity and compete more effectively.

At the same time, carefully designed tax incentives could encourage investment and support the industry’s expansion.

Potential Impact on Pakistan’s Construction Industry

Pakistan’s construction sector plays an important role in employment, infrastructure development, housing, and economic activity. However, the industry has long faced challenges including inconsistent standards, financing constraints, regulatory complexity, and concerns over project quality.

The proposed reforms could address several of these issues simultaneously.

A strong CIDB could provide a dedicated institution for developing industry standards and resolving regulatory problems. Longer defect liability periods could improve construction quality, while consultant accountability could strengthen professional responsibility. Meanwhile, a specialized financial institution could potentially make it easier for construction firms to obtain the guarantees and financing required for major projects.

However, the success of the reforms will ultimately depend on how they are implemented. A new regulatory body will need clear powers, transparent procedures, and effective coordination with existing institutions. Similarly, any specialised construction bank would need a sustainable financial model and strong governance.

A Potential Turning Point

Pakistan’s proposed construction-sector reforms represent an attempt to move beyond individual project regulations and create a more organized framework for the industry.

If approved and implemented effectively, the CIDB could become a central institution for improving construction standards, encouraging innovation, and holding both contractors and consultants accountable. The proposed Construction Development Bank, meanwhile, could help address one of the industry’s most persistent challenges: access to suitable financial support.

The combination of stronger regulation, longer liability periods, professional accountability, financing reforms, and targeted tax and trade measures could significantly reshape Pakistan’s construction landscape.

The proposals are still moving through the approval and consultation process, but they signal the government’s intention to make the construction sector more accountable, competitive, technologically capable, and aligned with international standards.

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The changes are aimed at encouraging traders to complete customs procedures on time and prevent imported or export goods from remaining at customs stations for unnecessarily long periods.

Higher Fines for Late Declarations

Under the new schedule, importers and other relevant parties will face penalties when a goods declaration for home consumption, warehousing or transshipment is not submitted within 20 days after the arrival of the goods at a customs station.

Once the initial period has passed, a fine of Rs25,000 per day will apply for the next five days. If the delay continues, the penalty will increase to Rs50,000 for every additional day, with the total fine limited to Rs1 million.

Delays After Assessment and Payment

The FBR has also introduced penalties for goods that remain uncleared even after customs assessment has been completed and applicable duties and taxes have been paid.

Where a declaration was submitted before the vessel’s arrival, goods must be removed within five days after assessment and berthing. Failure to do so will result in a Rs15,000 daily penalty for the next five days, followed by a Rs20,000 daily fine for each subsequent day.

The maximum penalty under this provision is also Rs1 million.

Another category applies when the declaration is filed after the vessel has already berthed. If the goods are not removed within five days after clearance of the declaration, the penalty will begin at Rs10,000 per day for five days and then increase to Rs20,000 per day.

Exporters Also Face Time-Based Penalties

The revised rules extend to export consignments as well. Goods entering a port for export must be loaded onto the relevant conveyance within 15 days.

If they remain unshipped, the exporter will face a fine of Rs5,000 per day for the next five days. Continued delays will attract a higher penalty of Rs15,000 per day, with the maximum liability capped at Rs1 million per case.

New Notification Replaces Previous Rules

The revised penalty structure was notified through S.R.O. 1346(I)/2026, issued by the Revenue Division on August 13, 2026. It has been issued under Section 82(1) of the Customs Act, 1969, and replaces the earlier notification S.R.O. 1387(I)/2025 dated July 31, 2025.

According to the notification, penalties will be dealt with through the prescribed adjudication process or by voluntary payment in accordance with the relevant rules.

Impact on the Trading Community

The new system could have a significant financial impact on businesses that fail to meet customs deadlines. Because the penalties increase as delays continue, traders will have a stronger incentive to submit declarations promptly, complete assessment requirements and remove goods without unnecessary delays.

Importers and exporters may therefore need to strengthen their documentation, compliance and logistics procedures to avoid accumulating daily fines.

Conclusion

The FBR’s latest notification signals a tougher approach toward delays in customs clearance and export procedures. With penalties reaching as much as Rs1 million per case, businesses will need to closely monitor statutory deadlines once the new regime becomes effective on October 1, 2026.

The measure is ultimately intended to promote faster customs processing, reduce congestion at customs stations and encourage greater compliance among Pakistan’s trading community.

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The arrangement provides a formal framework for both sides to assist each other in customs-related matters. It includes the exchange of information, mutual administrative assistance and cooperation in identifying suspicious consignments and individuals. The two authorities will also work together to support the enforcement of their respective customs laws.

The agreement was formalized during a virtual ceremony held at the Federal Board of Revenue (FBR) headquarters. Member Customs Operations Shakeel Shah co-chaired the ceremony, while copies of the agreement were subsequently exchanged between Hong Kong Customs and Pakistan’s Consul General in Hong Kong.

A stronger intelligence-sharing mechanism

One of the most significant features of the new arrangement is the improved flow of customs intelligence between Pakistan and Hong Kong. Timely access to information can help authorities identify potentially problematic shipments and take appropriate action before illegal or fraudulent trade causes further harm.

Cooperation between customs administrations is particularly important in today’s interconnected global trading system, where goods can pass through several countries and territories before reaching their final destination. Sharing intelligence can therefore help authorities detect suspicious patterns that may otherwise be difficult to identify.

Focus on enforcement and trade security

The agreement also strengthens cooperation in enforcing customs regulations. By working more closely, the two sides can improve their ability to address activities that undermine legitimate commerce and government revenues.

Officials have emphasized that the cooperation follows standards promoted by the World Customs Organization (WCO). This gives the arrangement an international framework and reflects the two sides’ commitment to modern customs practices.

The objective is not only to prevent illegal activities but also to enhance the security of international supply chains. A more effective customs system can help protect legitimate businesses and traders from unfair competition caused by smuggling, fraud and other illicit practices.

Potential benefits for Pakistan

For Pakistan, closer customs cooperation with Hong Kong could provide useful support in improving revenue collection and combating customs violations. Better access to trade-related intelligence may enable authorities to investigate suspicious transactions and consignments more effectively.

At the same time, stronger coordination could contribute to smoother legitimate trade. When customs authorities have better information and risk-assessment capabilities, they can focus enforcement efforts on high-risk shipments while allowing compliant businesses to move goods more efficiently.

Building a long-term partnership

Shakeel Shah described the agreement as an opportunity to establish a lasting institutional relationship between the customs administrations of Pakistan and Hong Kong. He also stressed Pakistan Customs’ willingness to continue supporting its Hong Kong counterpart in the areas covered by the agreement.

The pact therefore represents more than a routine exchange of commitments. It creates a structured platform through which both sides can cooperate on emerging customs challenges and respond more effectively to changing patterns of international trade.

Conclusion

The Pakistan-Hong Kong customs agreement marks a significant development in bilateral customs cooperation. Through greater intelligence sharing, mutual assistance and coordinated enforcement, the two sides aim to make international trade more secure while facilitating legitimate commercial activity.

As global supply chains become increasingly complex, cooperation between customs authorities is becoming essential. The new framework could help Pakistan and Hong Kong strengthen enforcement, protect government revenues and create a safer and more efficient environment for legitimate trade.

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The company plans to make 58,049,541 shares available to investors, representing 15% of its paid-up capital following the IPO. The shares will be offered through the book-building process before being listed on the Pakistan Stock Exchange (PSX).

The move will allow the company to raise fresh capital while giving investors an opportunity to become shareholders in a business operating in Pakistan’s food and industrial products sector.

Institutional Investors to Get Larger Allocation

The IPO has been structured to give institutional investors and high-net-worth individuals the majority of the offered shares.

Around 75% of the issue will be allocated to institutional and high-net-worth investors, while 25% will be set aside for individual or retail investors.

Using the book-building system, investor demand will help determine the final price at which the shares are offered.

Expanding Production Capacity

Agro Processors & Atmospheric Gases is involved in the production and marketing of a variety of food and industrial products. Its portfolio includes edible oils, vanaspati, margarine, industrial fats, spices and sauces.

A substantial share of the funds generated through the IPO will be used to expand the company’s manufacturing capabilities.

The company intends to dedicate roughly 40% of the IPO proceeds to increasing its refining capacity by about 33%. Once the planned expansion is completed, annual refining capacity is expected to reach 120,000 tons.

The additional capacity could allow the company to respond to increasing market demand and strengthen its position within the edible-oil and related industries.

Storage Infrastructure Also on the Agenda

Part of the capital raised will be used to develop a new storage facility. Additional storage can play an important role for a company operating in commodity-related industries by improving inventory management and supporting larger production volumes.

The investment could also help the company streamline its supply chain as its production capacity expands.

Turning to Renewable Energy

Another notable feature of the company’s expansion strategy is its focus on energy efficiency.

Agro Processors plans to invest in biomass and solar energy businesses as part of an effort to reduce energy expenses. For a manufacturing company, lowering electricity and fuel costs can have a direct impact on production expenses and profitability.

The shift toward alternative energy could therefore support the company’s long-term cost-control strategy while reducing its reliance on conventional energy sources.

What Investors Should Watch

The IPO could attract interest from investors looking for exposure to Pakistan’s consumer and manufacturing sectors. However, the success of the offering will ultimately depend on factors such as the valuation, company earnings, market conditions and its ability to deliver on the expansion plans.

Increasing refining capacity, building storage infrastructure and investing in alternative energy all require effective execution and careful financial management.

A Potentially Significant Market Debut

The SECP’s approval marks an important step toward Agro Processors & Atmospheric Gases becoming a publicly traded company.

By offering 15% of its post-IPO capital to investors, the company is opening its ownership to the wider market while raising funds for expansion. Its plans to increase refining capacity to 120,000 tons annually and invest in storage and renewable energy could provide a foundation for future growth.

The upcoming PSX listing will therefore be worth watching as the company seeks to turn fresh market capital into greater production capacity, improved efficiency and long-term expansion.

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According to official figures, 317,436 workers travelled abroad for employment between January and June. The departures included both skilled professionals and technical workers, ranging from doctors and engineers to IT specialists, technicians and healthcare personnel.

Gulf Countries Remain the Main Choice

Saudi Arabia remained by far the most attractive destination for Pakistani workers. Nearly 184,000 workers moved to the Kingdom during the first half of the year.

The United Arab Emirates ranked second, with more than 50,000 Pakistani workers travelling there. Qatar received around 34,000, while Bahrain attracted over 13,000. Türkiye also appeared among the notable destinations, with thousands of Pakistanis securing employment there.

Several other countries, including the United Kingdom, Greece, Cyprus and Malaysia, also provided employment opportunities for Pakistani workers.

The figures reinforce the Gulf region’s long-standing role as a major destination for Pakistan’s overseas workforce.

Skilled Workers Are Increasingly Leaving

One of the most significant aspects of the current migration trend is the diversity of workers seeking opportunities abroad.

The departing workforce includes doctors, software engineers, IT professionals, petroleum and mechanical engineers, paramedical employees and technical specialists. This suggests that the movement is not simply a search for manual labor jobs but also reflects dissatisfaction among highly educated and professionally qualified Pakistanis.

Limited opportunities for career progression and concerns about the country’s economic direction are encouraging many skilled individuals to consider building their careers elsewhere.

Economic Uncertainty Drives the Trend

Several domestic challenges are contributing to the growing demand for overseas employment. Inflation, unemployment and economic uncertainty have made it increasingly difficult for many people to achieve financial stability.

Political uncertainty and repeated internet disruptions have also created difficulties for businesses and professionals, particularly those working in technology and digital industries.

Pakistan’s limited technological infrastructure and shortage of research and development facilities are additional concerns. For highly skilled workers, foreign countries can offer better access to advanced technology, research opportunities, competitive salaries and professional development.

A Potential Benefit Through Remittances

The departure of hundreds of thousands of workers also has an important economic dimension. Pakistan receives substantial remittances from citizens employed overseas, and a larger international workforce could potentially increase the money flowing back into the country.

These funds support millions of families and provide an important source of foreign exchange for Pakistan. Overseas workers therefore play a significant role in supporting household incomes and the wider economy.

However, the benefits of migration need to be balanced against its long-term consequences.

The Risk of Losing Skilled Talent

When doctors, engineers, IT experts and other professionals leave Pakistan, the country loses part of its skilled workforce. If the trend continues, sectors already facing shortages could experience further pressure.

The challenge for Pakistan is therefore not simply to manage overseas employment but to create domestic conditions that make talented workers want to stay.

Greater investment in technology, research, education and high-value industries could generate more attractive career opportunities at home. Economic stability and reliable digital infrastructure would also be important for retaining professionals.

A Sign of Opportunity and Concern

The departure of more than 317,000 workers in only six months presents two sides of the same story. Overseas employment can provide Pakistanis with higher incomes and valuable international experience while increasing remittance flows into the country.

At the same time, the scale of the movement signals serious weaknesses in Pakistan’s domestic employment environment.

Unless the country can create more competitive salaries, stronger institutions and better professional opportunities, increasing numbers of Pakistanis may continue to look beyond its borders for their future.

The overseas employment boom may provide short-term economic relief, but reversing the underlying causes of the talent outflow will require long-term investment and meaningful improvements in Pakistan’s economic and professional landscape.

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Under the EU’s revised scheme, Pakistan will no longer receive an automatic extension of its GSP+ status. Instead, the country will have to submit a formal application along with an action plan demonstrating its commitment to implementing 32 United Nations conventions.

A More Demanding GSP+ Framework

The change represents a significant shift in the way Pakistan’s access to the European market will be assessed. Rather than relying on an automatic continuation, the country will have to demonstrate progress in areas covered by the relevant international conventions.

According to Commerce Secretary Jawad Paul, the new framework includes a two-year transition period. During this time, beneficiary countries are expected to prepare their action plans and present them for assessment by the European Union.

Pakistan’s performance will therefore come under closer scrutiny as it seeks to maintain the trade preferences that have supported its exports to the European market.

Human Rights Remain a Key Concern

The EU’s assessment of Pakistan reportedly highlighted both achievements and areas requiring improvement. Human rights emerged as one of the major concerns.

The assessment also considered Pakistan’s security environment and climate-related challenges. The country has faced significant economic pressures, security difficulties and the consequences of severe flooding and other climate events, all of which can affect its ability to fully implement international commitments.

However, the government has acknowledged that Pakistan must undertake fundamental reforms itself. The EU’s understanding of Pakistan’s difficult circumstances does not remove the responsibility to address areas where progress is required.

What It Means for Pakistani Exporters

The continuation of GSP+ is particularly important for Pakistan’s export sector because preferential access to the European market helps Pakistani products compete more effectively.

The new requirements could therefore have consequences beyond foreign policy and human rights. Industries that depend heavily on exports to Europe will have a strong interest in ensuring that Pakistan meets the EU’s conditions.

The government will need to coordinate closely with relevant institutions, businesses and other stakeholders to demonstrate measurable progress and protect Pakistan’s position in the European market.

Trade Reforms at Home

The discussion over GSP+ comes as Pakistan is also pursuing changes to its domestic trade and tariff policies.

Officials told the National Assembly Standing Committee on Commerce that duties and taxes are being reduced across sectors in an effort to improve competitiveness. Tariffs on around 2,000 tariff lines were reportedly reduced during the previous year, particularly with the objective of lowering the cost of raw materials.

The government’s broader approach is aimed at reducing excessive protection and making Pakistani industries more competitive. Lower input costs could help businesses improve productivity and strengthen their position in international markets.

A Critical Period Ahead

Pakistan now faces a period in which trade policy, economic reform and international commitments are increasingly interconnected. Maintaining GSP+ access will require more than diplomatic engagement with the EU; it will also depend on tangible progress in areas covered by the 32 UN conventions.

For Pakistan’s exporters, the stakes are high. The European market remains an important destination for Pakistani goods, and preserving preferential access could support export growth and industrial competitiveness.

The transition period therefore provides Pakistan with an opportunity to address the EU’s concerns, develop a credible action plan and demonstrate that it can meet the requirements of the revised GSP+ framework.

Ultimately, the challenge is not simply retaining a trade concession. It is about using the transition period to strengthen institutions, improve compliance with international commitments and create a more competitive environment for Pakistani businesses.

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The talks will cover the fourth review of the Extended Fund Facility (EFF) and the second review of the Resilience and Sustainability Facility (RSF). If Pakistan successfully completes both reviews, it could pave the way for around $1.2 billion in additional financing.

IMF to Examine First-Half Economic Performance

The visiting IMF team will assess Pakistan’s economic performance during the January-to-June 2026 period.

The review will determine whether the country has met the agreed targets and carried out the reforms required under its IMF commitments. Government officials are expected to present updated data and progress reports covering key areas of the economy.

The potential financing is significant for Pakistan as the government continues to focus on maintaining macroeconomic stability and strengthening its external financial position.

Tax Revenue Remains a Major Issue

One of the key areas likely to attract the IMF’s attention is Pakistan’s tax collection performance.

The government has been working to increase revenue and improve tax compliance, while businesses have simultaneously been calling for lower tax rates and a reduction in the cost of doing business.

The IMF is expected to assess whether Pakistan is making sufficient progress in broadening the tax base and meeting its revenue targets.

Energy Sector Reforms Under Review

Pakistan’s energy sector is another major component of the upcoming discussions.

Issues such as financial losses, inefficiencies and the accumulation of liabilities have remained longstanding challenges for the country. Reforms in this sector are therefore expected to remain an important part of the IMF programmed.

The Fund will likely examine the government’s progress in implementing measures designed to improve the financial health and efficiency of the energy system.

Privatization Efforts to Face Scrutiny

The pace of privatization is also expected to be discussed during the mission.

Pakistan has been pursuing the restructuring or sale of selected state-owned enterprises as part of efforts to reduce the financial burden on the government. The IMF is likely to seek updates on progress and assess whether the agreed timetable is being followed.

Governance and Anti-Corruption Measures

The upcoming review could also give considerable attention to governance reforms.

Transparency in the appointment of senior officials at important public institutions is expected to be among the issues discussed. Anti-corruption measures and institutional improvements are also likely to form part of the broader assessment.

These reforms are important because the IMF programmed extends beyond short-term financial targets and includes measures aimed at improving the way public institutions operate.

Around $1.2 Billion Could Be Unlocked

Successful completion of the two reviews could open the door to approximately $1 billion under the EFF and $200 million through the RSF.

However, reaching an agreement with the IMF mission would only be one step in the process. A staff-level agreement would still need to be considered and approved by the IMF’s Executive Board before the funds could be released.

Government Steps Up Preparations

Pakistan’s Ministry of Finance has instructed ministries and government departments to complete their preparations ahead of the IMF team’s arrival.

Officials are expected to provide updates on commitments made under the programmed and demonstrate progress on agreed targets and reforms.

The mission is likely to start its engagements in Karachi, where it will meet officials from the State Bank of Pakistan. It will then move to Islamabad for talks with the federal government’s economic team.

A Crucial Test for Pakistan’s Economic Programmed

The upcoming IMF mission will be an important checkpoint for Pakistan’s economic reform efforts.

Approval of the reviews would provide much-needed financial support and could strengthen confidence in Pakistan’s economic management. However, the discussions are also likely to highlight some of the country’s most difficult challenges, particularly taxation, energy reforms, privatization and governance.

Pakistan’s ability to demonstrate measurable progress in these areas will be crucial in determining whether the next IMF disbursements move forward.

The review is therefore more than a routine financial assessment. It will provide a broader indication of whether Pakistan is staying on course with the economic reforms needed to achieve greater stability and reduce its reliance on external financial support.

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Under the new Withholding Tax Card for 2026, individuals earning money through social media platforms will face a 5% withholding tax if they are active taxpayers, while non-filers will be subject to a higher 10% rate.

The new rates apply from July 1, 2026, and are part of the tax changes introduced through the Finance Act 2026.

Higher Rate for Non-Filers

The new rules fall under Section 154B of the Income Tax Ordinance, which covers certain payments made through social media platforms.

Content creators and influencers whose names appear on the FBR’s Active Taxpayers List will have 5% of their relevant social media income deducted as withholding tax. Those who are not included on the list will face a 10% deduction.

This means a creator’s tax status can have a direct impact on the amount deducted from their earnings.

For example, if an eligible social media payment is Rs1 million, the withholding amount would be Rs50,000 for an active taxpayer compared with Rs100,000 for a non-filer, based on the stated rates.

Impact on Pakistan’s Growing Creator Economy

Social media has created new income opportunities for thousands of Pakistanis. YouTubers, influencers, streamers, bloggers and other digital professionals can now earn through advertising, platform monetization, sponsorships and other online activities.

As this sector grows, the government is increasingly focusing on bringing digital earnings within the formal tax framework.

The higher rate for non-filers also fits into the broader policy of encouraging individuals to register with the tax authorities and comply with filing requirements.

What Creators Need to Consider

For people earning regularly from social media platforms, understanding their taxpayer status will become more important.

Creators should keep proper records of their online income and the taxes deducted from payments. They should also ensure that their tax information and filing status remain up to date.

It is worth remembering that withholding tax is generally collected in advance and may not necessarily represent the individual’s final tax liability. The ultimate tax treatment depends on the applicable income-tax rules and the taxpayer’s overall circumstances.

Property and Salary Taxes Also Revised

The updated FBR tax card does not focus only on social media earnings. It also incorporates changes affecting other areas, including the salaried sector and real estate transactions.

Withholding tax rates related to the purchase and sale of immovable property have been revised, while changes have also been made to taxation applicable to salaried individuals.

These adjustments form part of the wider amendments introduced through the Finance Act 2026.

Digital Income Comes Under Greater Scrutiny

The introduction of separate rates for filers and non-filers reflects the government’s broader effort to expand the formal tax base.

As more people earn income through digital platforms, online earnings are becoming harder to overlook from a taxation perspective. The latest measures indicate that content creators are increasingly being treated as part of the formal economic system rather than as a separate or informal category.

For creators, maintaining an active taxpayer status could therefore become financially important.

Conclusion

The revised withholding tax structure marks another significant development for Pakistan’s rapidly expanding creator economy. From July 2026, active taxpayers earning through covered social media arrangements will face a 5% withholding rate, while non-filers will face 10%.

The change is likely to encourage more digital earners to register, file their returns and maintain compliance with the FBR.

As Pakistan continues to strengthen taxation of digital income, social media professionals will need to become more aware of their tax obligations and keep accurate records of their earnings and deductions.

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Business leaders argued that high taxes, expensive energy, costly borrowing and complex tax procedures are making it increasingly difficult for companies to operate competitively. According to representatives of the business community, many industries are currently working at only around 40 to 45 percent of their production capacity.

Possible Cuts in Super Tax and Sales Tax

During the meeting, FBR Member Hamid Ateeq Sarwar said the government was reviewing the existing tax structure and considering additional reductions in the super tax as well as the sales tax burden.

The government has already introduced several tax-related relief measures since 2025. These include reductions in income tax for salaried individuals, cuts in super tax and the removal of super tax for exporters.

The FBR said the measures already introduced have resulted in a revenue impact of approximately Rs361 billion. Officials indicated that efforts to make the tax system more reasonable and business-friendly would continue.

While the possibility of further reductions is encouraging for businesses, the proposed measures have yet to become a finalized tax package. Companies will therefore need to wait for formal announcements and legal changes before the relief can be considered effective.

Businesses Demand Wider Tax Reforms

Business representatives said reducing super tax alone would not be enough to address the difficulties facing the private sector. They called for reductions in advance tax and withholding taxes, along with a review of customs duties.

They also raised concerns about the procedures used by FBR field offices. According to business representatives, excessive tax notices, complicated audits and aggressive enforcement are creating additional uncertainty for taxpayers.

Simplifying the audit process and establishing clearer rules could help businesses spend less time dealing with tax disputes and more time focusing on production, investment and expansion.

Expanding the Tax Base

Another major demand from the business community is a broader tax base.

Rather than increasing the burden on businesses and individuals who are already registered and paying taxes, representatives argued that the government should bring more businesses and economic activities into the formal tax system.

A wider tax base could potentially allow the government to collect more revenue without repeatedly increasing tax rates on existing taxpayers. It could also create a more balanced environment between compliant businesses and those operating outside the formal economy.

Industries Under Growing Pressure

The concerns raised by business leaders reflect the wider challenges facing Pakistan’s industrial sector. High electricity and gas costs, expensive financing and taxation have increased the cost of doing business.

Representatives warned that if these pressures continue, some companies could consider moving parts of their operations outside Pakistan in search of more competitive conditions.

Low capacity utilization is another concern. When factories operate well below their potential, businesses face difficulties covering fixed costs, while the wider economy loses opportunities for investment, exports and employment.

FBR Focuses on Taxpayer Facilitation

Alongside potential tax reductions, the FBR is also working on measures intended to improve taxpayer services.

Officials highlighted plans for a mobile application to facilitate tax reimbursements and designated taxpayer facilitation days in major commercial centers. Exporter facilitation committees have also been established in Karachi, Lahore, Sialkot, Faisalabad, Islamabad and Multan.

These initiatives could help improve communication between taxpayers and the tax authorities, particularly if complaints and refund-related issues can be resolved more quickly.

Transport Strike Adds to Business Concerns

The committee also discussed the ongoing goods transport strike and its impact on commercial activity.

Disruptions to the movement of goods can create serious problems for manufacturers, exporters and retailers. Perishable products face the risk of losses, while delays can also increase container detention and other logistics costs.

Committee convener Muhammad Talha Mahmood called for immediate negotiations with transporters to restore normal movement of goods and reduce the economic impact of the dispute.

He also recommended that taxpayers’ accounts be restored within 24 to 48 hours when genuine errors in tax returns have been corrected. An improved biometric verification system was another recommendation discussed during the meeting.

A Potential Shift Toward Business-Friendly Taxation

The latest discussions suggest that the government and FBR recognize the need to reduce some of the pressures facing Pakistan’s formal business sector. Lower taxes, simpler procedures and better taxpayer services could help improve investment and industrial activity.

However, meaningful reform will require more than temporary tax concessions. Businesses are also looking for consistency, transparency and predictable enforcement.

If the government succeeds in reducing unnecessary compliance costs while expanding the tax base, it could create a system that generates sustainable revenue without placing excessive pressure on existing taxpayers.

For now, the consideration of further super-tax and sales-tax relief is a positive signal for the business community. The real test, however, will be whether these proposals translate into concrete reforms that lower the cost of doing business and encourage companies to invest and expand within Pakistan.

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