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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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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According to a notice submitted to the Pakistan Stock Exchange (PSX), the board of directors has recommended investing approximately Rs180 million in MPIL following the completion of due diligence.

Under the proposal, LSE SPAC-II will subscribe to 269,000 ordinary shares of M.P. Industries at a price of Rs669.14 per share. Once the new shares are issued, the investment is expected to give LSE SPAC-II an ownership stake of around 15% in MPIL’s post-issue paid-up capital.

The proposed investment represents an important step for LSE SPAC-II as it seeks to deploy its funds into a new business opportunity. However, the transaction is not yet final, as it requires approval from the company’s shareholders through a special resolution and must also go through the required corporate and regulatory procedures applicable to SPACs.

Shareholders to Decide on Investment

To obtain the necessary approval, LSE SPAC-II has scheduled its Annual General Meeting for Saturday, September 19, 2026, at 9:30 am. The meeting will be held at the company’s registered office in Lahore.

Shareholders will be asked to consider and approve the proposed investment in MPIL, along with other related matters.

The company said the AGM notice, Statement of Material Facts and Information Circular required under Section 12(g) of the Public Offering Regulations, 2017, will be distributed to shareholders in due course.

Why the Investment Matters

The proposed transaction gives LSE SPAC-II an opportunity to obtain a meaningful stake in M.P. Industries without acquiring the entire company. A 15% holding could potentially allow SPAC-II to benefit from MPIL’s future growth and financial performance, although the ultimate return will depend on the company’s business prospects and valuation.

For investors, the key consideration will be whether the agreed price of Rs669.14 per share provides sufficient value relative to MPIL’s earnings, assets and future growth potential.

The transaction also highlights the role of SPACs in identifying and investing in businesses after their initial capital-raising phase. If approved by shareholders and completed successfully, the MPIL investment will become a significant portfolio transaction for LSE SPAC-II.

What Happens Next?

The immediate milestone is the September 19 AGM, where shareholders will decide whether to approve the proposed investment. If the resolution receives the required approval, LSE SPAC-II can proceed with the subscription of MPIL shares, subject to completion of the remaining regulatory and corporate requirements.

Until those steps are completed, the Rs180 million investment remains a proposal rather than a finalized transaction. Investors will therefore be watching the AGM outcome and subsequent disclosures closely for further details on the deal and its potential impact on LSE SPAC-II.

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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 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 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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The two countries are working on plans for freight rail services linking Moscow with Faisalabad and Karachi. The proposed corridors are expected to operate in both directions, creating additional opportunities for the transportation of goods between Pakistan and Russia.

Russian Ambassador to Pakistan Albert P. Khorev said discussions with Pakistani stakeholders were continuing to establish the two routes. He also indicated that Belarus could potentially become part of the initiative, adding another dimension to the proposed regional transport network.

Rail Projects Aim to Improve Trade Connectivity

The proposed rail corridors have encountered delays because of the difficult geopolitical environment in the region during 2025 and the beginning of 2026.

According to the ambassador, efforts are now focused on completing the necessary commercial agreements and identifying businesses that could use the planned services.

The development of direct freight connections could help reduce logistical barriers for traders and provide businesses with an alternative route for transporting products between the two markets.

Faisalabad’s importance as a major industrial and textile center and Karachi’s position as Pakistan’s principal commercial and port hub could make the two destinations strategically important for the proposed network.

Agriculture Emerges as a Major Area of Cooperation

Transport connectivity is not the only area where Islamabad and Moscow are seeking closer ties. Agriculture is also becoming an important part of the bilateral economic agenda.

Federal Minister for National Food Security and Research Rana Tanveer Hussain recently met Russian Ministry of Economic Development representative Nikita Buzanov to discuss ways to expand agricultural trade and technical collaboration.

The Pakistani side stressed the importance of converting diplomatic relations into practical initiatives that can improve agricultural productivity and strengthen food security.

Modern farming equipment was among the priorities discussed. Pakistan is interested in obtaining advanced agricultural machinery and technologies from Russia to increase mechanization, improve efficiency and reduce the cost of farming operations.

Demand for Fertilizers and Crop Protection Products

Pakistan is also looking for more reliable and affordable sources of essential agricultural inputs.

During the discussions, the food minister called for increased Russian cooperation in the supply of fertilizers and pesticides. Access to competitively priced inputs could help farmers control expenses and improve agricultural output.

The two countries also see potential for closer cooperation in the livestock sector. Pakistan has expressed interest in Russian vaccines and modern animal-health technologies to improve disease prevention and strengthen livestock production.

Russia Shows Interest in Pakistan’s Agricultural Market

Russia has signaled its willingness to work with Pakistani authorities to identify specific requirements within the country’s agricultural sector.

Russian companies and institutions could potentially supply machinery, fertilizers, pesticides and veterinary vaccines, while greater institutional cooperation could help establish longer-term commercial relationships.

The Russian side has also highlighted opportunities to increase trade in agricultural products and develop stronger links between organizations in the two countries.

Turning Discussions Into Results

Pakistan’s authorities have been instructed to examine potential areas of cooperation and maintain active engagement with Russian counterparts.

The immediate challenge will be turning the proposals into commercially viable projects. The success of the rail corridors will depend on final agreements, participating companies and sufficient freight demand, while agricultural cooperation will require reliable supply arrangements and effective institutional coordination.

Nevertheless, the initiatives demonstrate a growing focus on practical economic cooperation between Pakistan and Russia.

If successfully implemented, improved rail connectivity could make bilateral trade easier, while cooperation in machinery, farm inputs and animal health could provide Pakistani agriculture with additional technology and supply options.

Together, these initiatives could help diversify Pakistan’s trade relationships and create new opportunities for businesses in transportation, agriculture, manufacturing and related sectors.

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The Economic Coordination Committee (ECC) has approved an export finance support package worth Rs88 billion for fiscal year 2026-27, combining expanded working-capital financing, long-term funding for export-oriented investment and incentives tied directly to export growth.

Under the new framework, the Export Finance Scheme (E-EFS) will see its overall financing limit increase from Rs1 trillion to Rs1.5 trillion. The facility is designed primarily to provide working capital to exporters of value-added products, with financing available for periods of up to 180 days.

The government also plans to gradually reduce support for conventional products and markets. EXIM Bank is expected to bring the share of financing allocated to traditional export categories down from around 70% currently to 50% by 2030, encouraging exporters to move toward more diversified and higher-value markets.

New Rs350 Billion Long-Term Export Facility

A major component of the policy is the proposed Rs350 billion Long-Term Export Growth Financing Facility (LTEGFF). The programmed will replace the existing Export Long-Term Financing Facility and focus on new export-oriented projects as well as balancing, modernization and replacement investments.

To qualify, businesses will generally need to have an export orientation of at least 80%. The facility will offer subsidized fixed-rate financing with maturities of up to 10 years, giving exporters greater certainty when making long-term investment decisions.

The overall subsidy associated with LTEGFF is estimated at approximately Rs195.98 billion, including around Rs25.16 billion during FY2026-27.

The initiative is intended to encourage businesses to expand production capacity, modernize equipment and invest in projects capable of generating additional export revenues.

Incentives Linked to Export Growth

The government is also introducing a new performance-based rebate from July 1, 2026. Unlike traditional financing subsidies, this mechanism will reward exporters according to their increase in exports compared with the previous year.

For exporters achieving growth of up to 10%, the rebate will be equivalent to 1% of incremental exports. A higher rate is expected to apply to companies recording growth above 10%, although the final structure is still being worked out.

The government has estimated the cost of the rebate programmed at Rs15 billion for FY2026-27, with approximately Rs10 billion expected to be utilized during the current fiscal year.

To ensure exporters do not have to wait until the end of the year for support, companies that exceed their previous year’s average quarterly export performance will be eligible to receive 75% of their expected rebate on a provisional basis.

The final amount will be calculated after the close of the financial year. Exporters that fail to achieve their required annual targets will have to return the excess provisional payment within 15 days.

SBP to Strengthen Monitoring

Alongside the expansion of financing, the ECC has placed greater responsibility on the State Bank of Pakistan (SBP) to ensure that the schemes are properly administered.

The central bank has been asked to introduce safeguards such as limits on financing available to individual parties, greater access for small and medium-sized enterprises and measures aimed at broadening Pakistan’s export base.

The government also wants the schemes to encourage diversification away from a limited number of products and markets. This is particularly important because excessive concentration can leave exporters vulnerable to changes in international demand, prices and trade policies.

SBP’s monitoring role is also intended to address weaknesses identified in previous subsidy programmed. The objective is to ensure that concessional financing reaches genuine export-oriented businesses rather than being diverted for purposes unrelated to export expansion.

A Shift Toward Performance-Based Export Support

The latest measures represent a broader attempt to make Pakistan’s export support system more targeted and results-oriented.

Instead of relying solely on subsidized credit, the new framework combines financing with measurable export objectives. Long-term funding can help companies modernize and expand, while the performance rebate creates a direct financial incentive to increase exports.

The challenge, however, will be implementation. Strong monitoring, transparent eligibility criteria and timely verification of export performance will be essential if the programmed is to deliver the intended results without creating new opportunities for abuse.

If effectively managed, the package could provide exporters with greater access to affordable financing while encouraging investment, diversification and higher export growth. The success of the programmed will ultimately depend on whether the additional public support translates into sustained increases in Pakistan’s export earnings.

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According to a disclosure submitted to the Pakistan Stock Exchange (PSX) on Monday, BOP’s Board of Directors approved the proposal during its 334th Emergent meeting held on August 7, 2026. The transaction will be carried out subject to the necessary corporate and regulatory approvals.

Share Subscription to Be Completed in Two Phases

The proposed investment will be made in two stages. The Government of Punjab is expected to subscribe for shares worth up to Rs20 billion by December 31, 2026, while the remaining amount, up to Rs10 billion, is planned for completion by June 30, 2027.

Unlike a conventional rights issue, the proposed shares will be issued otherwise than by way of a rights issue, meaning existing shareholders will not receive rights to subscribe to the new shares on a proportional basis.

Issue Price Set at Rs38.20

BOP has proposed an initial issue price of Rs38.20 per ordinary share.

However, the final price could be higher. If BOP’s market price is above Rs38.20 at the time the shares are issued, the bank will use the prevailing market price and add a 5% premium.

At the base price of Rs38.20, a full Rs30 billion subscription would translate into approximately 785 million new shares.

Regulatory and Shareholder Approvals Required

The proposed transaction is not yet final. BOP will first have to secure approval from its shareholders through an Extraordinary General Meeting (EGM).

The bank will also require clearance from relevant regulatory bodies, including the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP).

BOP said that any further developments concerning the proposed share issuance will be communicated to the PSX in line with applicable laws and regulations.

What Does the Capital Injection Mean for BOP?

The proposed Rs30 billion investment could provide BOP with a substantial boost to its capital base. Additional equity could support the bank’s future expansion, strengthen its financial position and provide greater capacity to pursue lending and other business opportunities.

For existing shareholders, however, the issuance of new shares could result in dilution of their ownership percentage, depending on the final number of shares issued.

The ultimate effect will also depend on the price at which the shares are issued and how effectively BOP deploys the additional capital.

A Significant Move by the Government of Punjab

The proposed transaction highlights the Government of Punjab’s continued involvement in the Bank of Punjab and could significantly increase its equity exposure to the financial institution.

With the first tranche targeted for completion by the end of 2026 and the remaining investment scheduled for the first half of 2027, investors will now be watching the approval process, the final issue price and the impact of the new capital on BOP’s financial performance.

For now, the Rs30 billion share subscription remains a proposal subject to shareholder and regulatory approval, rather than a completed transaction.

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Bilal Bin Saqib, Minister of State and Chairman of the Pakistan Virtual Assets Regulatory Authority (PVARA), highlighted the progress during the authority’s third meeting. The session focused on the ongoing development of regulations governing virtual assets and the requirements that businesses will need to meet to operate within the sector.

Regulators Working on Licensing Rules

The meeting brought together senior representatives from several important government and financial institutions, including the Governor of the State Bank of Pakistan, the Finance Secretary, the Law Secretary, the Chairman of the Securities and Exchange Commission of Pakistan (SECP), and the Chairman of the Pakistan Digital Authority.

Officials reviewed the progress made on the proposed regulatory framework, with licensing and human-resource requirements among the key areas under consideration. According to the discussions, Pakistan is now approaching the stage where a complete licensing mechanism for virtual asset businesses can be established.

The move could provide greater clarity for companies seeking to offer crypto-related services in the country while also giving regulators a structured way to monitor the industry.

Focus on Responsible Crypto Growth

Bilal Bin Saqib described the development as an important milestone for Pakistan’s emerging virtual assets sector. He said the proposed framework is intended to be modern, transparent and based on risk assessment.

Rather than simply restricting the use of digital assets, the regulatory approach appears designed to create an environment where innovation can take place under clearly defined rules. At the same time, regulators want to reduce potential risks faced by consumers and investors.

A formal licensing system could also help distinguish legitimate and compliant virtual asset businesses from unregulated operators, potentially improving confidence in the market.

Protecting Consumers and Investors

One of the major objectives of the proposed framework is stronger protection for people participating in the virtual asset market. Clear licensing requirements can establish standards that businesses must follow before providing services to customers.

Greater regulatory oversight could also improve transparency across the industry and help authorities address risks associated with financial crime, market misconduct and inadequate consumer safeguards.

For investors and crypto users, the introduction of clear rules could eventually make it easier to identify which platforms and service providers are operating within Pakistan’s regulatory framework.

A Step Toward a Digital Economy

Pakistan’s move toward formal virtual asset regulation comes as digital finance continues to develop globally. By establishing a structured regulatory environment, the country aims to encourage legitimate investment and support innovation while maintaining financial and consumer safeguards.

PVARA has indicated that it intends to develop a regulatory system that is aligned with international practices. This could help Pakistan create stronger connections with the wider digital-asset ecosystem while ensuring that businesses operating domestically meet appropriate regulatory standards.

What Comes Next?

The immediate focus remains on completing the regulatory framework and finalizing the requirements for licensing virtual asset service providers. Once the system is fully established, crypto-related businesses will have greater clarity regarding the standards they must meet to operate legally within the country.

For Pakistan’s growing digital economy, the development represents an important transition. The country is moving toward a model in which virtual assets can potentially operate within a defined legal and regulatory structure rather than remaining in an uncertain regulatory environment.

While the final rules and implementation details will determine how the system works in practice, Pakistan’s progress toward a comprehensive VASP licensing regime signals a significant change in the country’s approach to cryptocurrency and virtual assets.

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According to recent reports, more than 30% of beverage manufacturing in Pakistan operates through unregistered or counterfeit facilities. Since these businesses function outside the formal economy, they are not covered by the Federal Board of Revenue’s (FBR) latest electronic monitoring framework, raising concerns about fair competition and revenue losses.

To improve oversight of the documented sector, the FBR issued Sales Tax General Order (STGO) 07/2026 under the Sales Tax Act, 1990. The order requires all registered beverage manufacturers, including toll manufacturers, to install an Electronic Production Monitoring System (EPMS) that records production activities and transmits data directly to the FBR in real time.

The new system uses advanced technology such as barcode scanners, product-counting sensors, industrial computers, programmable logic controllers (PLCs), IP cameras, network video recorders, and other monitoring equipment. Together, these tools allow tax authorities to track production volumes, identify unexpected interruptions in manufacturing, and analyze production trends using real-time data.

Only vendors approved by the FBR are authorized to install and maintain the monitoring equipment, ensuring that the system follows standardized technical requirements. Dedicated officials from the Inland Revenue department have also been assigned to coordinate the implementation process with manufacturers and service providers.

Tax professionals believe the digital monitoring initiative represents an important milestone in the FBR’s broader strategy to modernize tax administration. By capturing production data electronically, the authority expects to reduce under-reporting, improve compliance, and increase government revenue from one of the country’s major manufacturing sectors.

Despite these advancements, the biggest obstacle remains the illegal segment of the industry. Factories operating without registration or producing counterfeit beverages continue to avoid taxation and regulatory oversight. As long as these businesses remain outside the documented economy, the government’s electronic monitoring system will only cover part of the market.

Industry experts suggest that while digital monitoring is a positive development for registered manufacturers, stronger enforcement against illegal production units is equally important. Without bringing undocumented factories into the tax net, the government may continue to lose substantial revenue while compliant businesses face unfair competition from untaxed producers.

The success of Pakistan’s digital tax reforms will therefore depend on two parallel efforts: ensuring accurate production monitoring for documented manufacturers and strengthening enforcement to identify and eliminate illegal beverage factories. Together, these measures could help create a more transparent, competitive, and accountable manufacturing sector while boosting the country’s tax revenues.

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The proposed reforms aim to address long-standing challenges such as mounting circular debt, inefficient pricing mechanisms, and limited private sector participation. If approved and implemented, the changes could reshape how natural gas is transported, sold, and priced across the country.

A New Tariff System for Greater Stability

A key feature of the reform plan is the introduction of a Multi-Year Tariff (MYT) framework. Instead of revising tariffs every year, gas utilities would operate under a longer-term pricing structure. This approach is intended to provide greater financial certainty for gas companies while encouraging investment in infrastructure and improving operational planning.

The tariff model will be based on internationally recognized principles, including the Regulatory Asset Base (RAB) and Weighted Average Cost of Capital (WACC), allowing companies to earn regulated returns while maintaining service standards.

Restructuring Pakistan’s Gas Utilities

The reform roadmap proposes splitting the country’s two major gas distribution companies—Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL)—into separate business units.

Each company would be divided into:

• A gas transmission company responsible for transporting natural gas.
• A Regulated Gas Sales (RGS) business serving domestic and protected consumers.
• A Competitive Gas Sales (CGS) business supplying industrial and commercial customers in an open market.

This separation is expected to improve transparency, increase operational efficiency, and encourage healthy competition.

Opening the Market to Private Companies

To reduce the state’s dominance in gas supply, the government plans to launch a Gas Market Release Programmed.

Under this initiative, private companies would gradually gain access to gas supplies through competitive auctions. The roadmap proposes releasing 20 percent of available gas volumes in the first year, followed by an additional 10 percent annually over the next two years.

The gradual transition is intended to create a competitive marketplace without causing major disruptions to existing consumers.

A Shift Toward Market-Based Pricing

One of the most important objectives of the reform package is to move toward cost-reflective gas pricing.

Currently, many gas consumers benefit from broad subsidies, while commercial and industrial users often pay higher prices to offset those costs. This system has contributed to financial losses and increasing circular debt.

The proposed reforms seek to replace blanket subsidies with targeted financial assistance for low-income households. Over time, gas prices would better reflect the actual cost of supply, while protecting vulnerable consumers through focused support programs.

Addressing Circular Debt

Pakistan’s gas sector has struggled with growing circular debt, limiting the financial health of public utilities.

To address this issue, the roadmap recommends establishing a dedicated holding company that would take over existing receivables and liabilities. This would allow the newly restructured operating companies to begin with cleaner balance sheets and improve their financial performance.

The government also plans to review existing contracts throughout the gas supply chain, including LNG import agreements, to align them with the new market structure.

Strengthening Regulation

Successful implementation will require significant regulatory reforms.

The government intends to update licensing rules, transmission and distribution regulations, and third-party access frameworks. New measures will also be introduced to improve transparency, strengthen market oversight, and prevent anti-competitive practices.

The Oil and Gas Regulatory Authority (OGRA) is expected to receive enhanced responsibilities, including establishing a dedicated market monitoring function to oversee competition and market behavior.

Challenges Ahead

While the proposed reforms offer significant long-term benefits, implementation will not be easy.

Moving toward cost-reflective tariffs may result in higher gas prices for many consumers, making public acceptance a major challenge. The government plans to ease this transition through targeted subsidies and gradual price adjustments.

In addition, legal amendments, approvals from the Council of Common Interests and the federal cabinet, coordination with provincial governments, and institutional capacity building will all be essential before the reforms can move forward.

Looking Ahead

The roadmap represents a bold effort to modernize Pakistan’s gas sector and place it on a more sustainable financial footing. By encouraging competition, improving regulatory oversight, attracting private investment, and reforming pricing mechanisms, the government hopes to create a more efficient and resilient energy market.

Although the implementation process is likely to take time and require broad political and institutional support, these reforms could play a crucial role in strengthening Pakistan’s energy sector and ensuring a more reliable gas supply for future generations.

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The rise in the deficit was mainly driven by a sharper increase in imports compared with export growth. During July 2026, Pakistan’s exports improved by 9.54% year-on-year to $2.939 billion, up from $2.683 billion recorded in the same month a year earlier. However, imports grew at a much faster pace, climbing 18% to $6.887 billion from $5.837 billion in July 2025.

Exports Show Positive Momentum

The increase in exports reflects a gradual improvement in Pakistan’s ability to generate foreign exchange through international trade. Export earnings rose by nearly $256 million compared with July last year, suggesting stronger performance from key exporting sectors.

On a monthly basis, exports recorded a substantial improvement, rising 31.09% from $2.242 billion in June 2026 to $2.939 billion in July. This monthly jump indicates improved export activity at the beginning of the new financial year.

Rising Imports Put Pressure on Trade Balance

Despite stronger exports, the rapid increase in imports remained a challenge. Imports expanded by $1.05 billion compared with July 2025, reflecting higher demand for foreign goods, raw materials, machinery, and other imported products.

The faster growth in imports compared with exports resulted in a wider trade imbalance, highlighting Pakistan’s continued dependence on imported goods and the need to strengthen domestic production capacity.

Monthly Deficit Shows Improvement

While the annual trade deficit widened, the month-to-month trend showed some improvement. The trade deficit declined by 15.22%, falling from $4.657 billion in June 2026 to $3.948 billion in July.

This improvement came as exports increased sharply during the month, while imports remained almost stable, declining slightly by 0.17% from June’s level of $6.899 billion.

Impact in Rupee Terms

The trade deficit also increased when measured in Pakistani rupees. The deficit rose 22.73% year-on-year to Rs1.10 trillion in July 2026 compared with Rs896.388 billion in July 2025.

Exports in rupee terms reached Rs817.246 billion, showing a 7.17% annual increase, while imports climbed 15.58% to Rs1.917 trillion.

On a monthly basis, rupee-based exports improved by 30.94%, while imports decreased marginally by 0.29%. As a result, the rupee trade deficit narrowed by 15.3% compared with June 2026.

Outlook for Pakistan’s Trade Sector

The latest figures present a mixed picture for Pakistan’s economy. The improvement in exports is a positive development and indicates progress in earning foreign currency through trade. However, the continued faster growth of imports remains a major concern for the country’s external balance.

To reduce the trade gap over the long term, Pakistan will need to focus on expanding export industries, increasing value-added exports, encouraging local manufacturing, and reducing reliance on imported products.

Although July’s monthly performance offers some relief, maintaining export growth while managing import demand will remain crucial for achieving a more sustainable trade position.

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The latest developments emerged during a meeting in Islamabad between Prime Minister Shehbaz Sharif and an Iranian delegation led by Iran’s Minister of Industry, Mine and Trade, Syed Mohammad Atabak. The discussions focused on removing barriers to trade and creating a more efficient system for the movement of goods between the two neighboring countries.

Around-the-Clock Border Crossings

One of the most notable outcomes of the meeting was the agreement to work towards keeping border crossings operational 24 hours a day. Continuous border operations are expected to reduce delays, improve supply chain efficiency, and make it easier for businesses on both sides to transport goods.

Alongside extended operating hours, Pakistan and Iran also agreed to modernize border infrastructure, simplify customs procedures, and strengthen logistical coordination. These measures are intended to make cross-border trade faster, more transparent, and more cost-effective.

Expanding Cooperation in Mining

Beyond trade facilitation, both countries are looking to strengthen collaboration in the mining sector. Discussions highlighted opportunities in mineral development, particularly the processing and value addition of precious stones. By investing in downstream industries instead of exporting raw materials, both nations aim to generate greater economic value and create new employment opportunities.

Shared Vision for Economic Growth

Prime Minister Shehbaz Sharif reiterated Pakistan’s commitment to building stronger relations with Iran, describing the neighboring country as an important regional partner. He expressed confidence that sustained cooperation and regular dialogue would help both nations achieve their ambitious trade target.

The Prime Minister also pointed to agriculture and food products as sectors with strong potential for increased bilateral trade, offering new opportunities for businesses and exporters in both countries.

Progress Towards a Free Trade Agreement

Iranian Minister Syed Mohammad Atabak reaffirmed Tehran’s commitment to expanding economic cooperation and revealed that technical discussions on a bilateral Free Trade Agreement (FTA) are continuing. A comprehensive trade agreement could further reduce barriers, encourage investment, and increase the volume of goods exchanged between the two countries.

Rebuilding Trade Momentum

Trade between Pakistan and Iran has faced challenges over the past decade, particularly after international sanctions on Iran affected banking channels and financial transactions. Before those restrictions, bilateral trade had reached more than $1.2 billion, with Pakistan exporting products such as rice, textiles, surgical instruments, meat, fruits, and paper, while importing chemicals, plastics, petroleum products, and steel from Iran.

Recent initiatives, including plans for border Special Economic Zones (SEZs), are expected to help revive commercial activity and encourage greater private-sector participation.

Looking Ahead

The renewed commitment by Pakistan and Iran reflects a broader effort to strengthen regional economic integration through improved connectivity, investment, and trade facilitation. If both countries successfully implement round-the-clock border operations, advance customs reforms, and conclude a Free Trade Agreement, bilateral commerce could experience substantial growth in the years ahead.

As both governments continue working toward the $10 billion trade target, stronger economic cooperation has the potential to benefit businesses, create employment opportunities, and contribute to greater regional prosperity.

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During a background briefing, a US embassy official reportedly said that the United States would be willing to support another mining venture on the scale of the Reko Diq project if future feasibility studies confirm its commercial potential. The statement reflects Washington’s increasing focus on securing reliable sources of critical minerals as global demand continues to rise.

Pakistan is home to significant deposits of copper, antimony, tungsten, and rare earth elements. These minerals play a vital role in the production of semiconductors, electric vehicles, renewable energy systems, artificial intelligence technologies, and advanced defence equipment. As countries seek to diversify their supply chains, Pakistan’s untapped mineral resources are attracting growing international attention.

In addition to large-scale projects, American companies are also exploring opportunities to invest in smaller mining operations. Some firms are considering acquiring and developing local mines, while others are interested in signing long-term offtake agreements to purchase minerals for processing and export to the United States. Reports also indicate that companies are evaluating copper reserves in Khyber Pakhtunkhwa and rare earth deposits in Gilgit.

The US government’s interest aligns with its broader strategy to strengthen supply chains for critical minerals. Financial institutions such as the Export-Import Bank of the United States (EXIM) and the US International Development Finance Corporation (DFC) are expected to play an important role in supporting eligible mining projects abroad.

Reko Diq remains one of Pakistan’s flagship mining developments and serves as a benchmark for future investment. Although the project has experienced some delays due to revised cost estimates, it continues to move forward. Once fully operational, it is expected to generate substantial economic benefits through exports, employment opportunities, and revenue for both the Government of Balochistan and Pakistan’s state-owned enterprises.

Despite the promising outlook, challenges remain. Many of Pakistan’s richest mineral reserves are located in areas facing security concerns, particularly in Balochistan and parts of Khyber Pakhtunkhwa. The US has reportedly encouraged Pakistan to maintain a transparent investment environment and provide adequate security measures to support foreign investors and local partners.

For Pakistan, attracting responsible foreign investment into the mining sector could help diversify the economy, boost exports, create skilled jobs, and unlock the value of resources that have remained underdeveloped for decades. With minerals currently contributing only a small share of the country’s economy, increased investment has the potential to become an important driver of long-term growth.

While no formal commitment has yet been announced for a new project matching the scale of Reko Diq, the reported interest from the United States highlights Pakistan’s growing importance in the global race to secure critical minerals. If translated into concrete investments, this cooperation could strengthen economic ties between the two countries while positioning Pakistan as a more significant player in the global minerals market.

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The understanding was reached during a high-level meeting in Karachi between the Chairman of the FBR and representatives of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and the Pakistan Business Council (PBC). The discussions were held following special instructions from the Prime Minister, highlighting the government’s focus on creating a more business-friendly environment.

Building Better Communication

One of the key outcomes of the meeting was the decision to establish joint committees comprising senior FBR officials and representatives from the business community. These committees will serve as a platform for continuous dialogue, allowing both sides to address genuine concerns quickly and efficiently.

The committees are expected to improve coordination, reduce delays in handling tax matters, and ensure that businesses have a voice in discussions related to tax administration and policy implementation.

Addressing Business Concerns

Business leaders used the meeting to highlight several long-standing challenges, including delays in tax refunds, complicated compliance procedures, and complaints regarding the conduct of some tax officials.

In response, the FBR chairman assured participants that the organization remains committed to making the tax system more transparent and business-friendly. He emphasized that legitimate taxpayers should be treated with fairness and respect and made it clear that harassment or unnecessary pressure on compliant businesses would not be tolerated.

The chairman also reiterated the FBR’s intention to simplify tax procedures, accelerate the processing of pending refunds, and improve the overall experience for taxpayers.

A Step Towards Greater Transparency

Another important aspect of the agreement is the commitment to stronger engagement between senior FBR officials and business representatives. Regular interaction and closer supervision by senior officers are expected to enhance transparency and ensure that issues are addressed before they become major obstacles.

By maintaining open communication channels, both parties hope to build greater trust and encourage constructive cooperation between the public and private sectors.

Boosting Business Confidence

The formation of these committees reflects a shared commitment to improving Pakistan’s tax administration while supporting economic growth. A responsive and efficient tax system can reduce uncertainty for businesses, encourage investment, and create a healthier environment for trade and industry.

Representatives of the FPCCI and PBC welcomed the initiative, appreciating both the Prime Minister’s efforts to facilitate dialogue and the FBR’s willingness to engage with the business community. They expressed confidence that the agreed measures would strengthen business confidence and contribute positively to the country’s economic development.

Looking Ahead

While the announcements have been well received, their long-term success will depend on effective implementation. Businesses will be looking for timely action, faster resolution of grievances, and measurable improvements in tax administration.

If the newly formed committees are able to deliver practical solutions and maintain consistent engagement with stakeholders, this initiative could mark an important step toward creating a more transparent, efficient, and business-friendly tax environment in Pakistan.

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Why Pakistan Is More Vulnerable

Every year, thousands of graduates complete their education with hopes of finding stable, well-paying jobs. However, Pakistan has long faced limited formal employment opportunities, slow private-sector growth, and high youth unemployment. According to the World Bank, the rise of AI could add another layer of difficulty if businesses begin using technology to perform tasks that were previously handled by skilled professionals.

Many of today’s AI systems are capable of writing reports, analyzing data, generating software code, handling customer support, and performing administrative work. These are the same kinds of responsibilities often assigned to fresh graduates in fields such as business, finance, information technology, and communications.

Automation Is Not the Whole Story

Despite concerns about job displacement, the report does not present AI as a threat alone. Instead, it highlights that AI is likely to increase productivity across a much larger share of jobs than those it completely replaces.

In developing economies, only a small percentage of existing jobs are considered highly vulnerable to automation. At the same time, many occupations could become more efficient with AI assistance, allowing workers to complete tasks faster, make better decisions, and improve the quality of their work.

This means AI is more likely to transform jobs than eliminate them entirely.

Surprisingly, Wealthier Countries Face Greater Automation Risk

The report also points out an interesting trend: high-income economies are expected to experience a greater level of automation than developing countries. This is because richer nations have a larger concentration of office-based and knowledge-intensive professions that generative AI can perform more easily.

For Pakistan, the greater concern is not the percentage of jobs that may disappear, but the limited number of quality jobs already available. Even modest automation could make competition tougher for graduates if new employment opportunities are not created.

Massive Global Investment in AI

The World Bank highlights the enormous amount of money flowing into AI development worldwide. Technology giants such as Alphabet, Amazon, Meta, Microsoft, and Oracle are expected to invest hundreds of billions of dollars in AI infrastructure and data centers.

The scale of this investment demonstrates how rapidly AI technology is advancing and why countries cannot afford to ignore the digital transformation taking place across industries.

What Pakistan Should Do

The report recommends that developing countries focus on adopting AI rather than resisting it. Governments, businesses, and educational institutions should work together to prepare people for an AI-driven economy.

Some key priorities include:

• Expanding digital infrastructure and reliable internet access.
• Improving electricity availability.
• Teaching AI and digital skills through education and training programs.
• Supporting businesses that create new employment opportunities.
• Developing AI solutions that address local challenges in healthcare, agriculture, education, and public services.

These steps can help ensure that AI becomes a tool for economic growth rather than a source of greater inequality.

A New Skill Set for the Future

The future workforce will need more than academic qualifications alone. Employers are increasingly looking for individuals who can use AI tools effectively while also demonstrating creativity, critical thinking, communication skills, and sound judgment.

Rather than replacing human expertise, AI is expected to become a workplace assistant that enhances productivity. Those who learn to work alongside these technologies will be better positioned to succeed in the evolving job market.

The Bottom Line

Artificial intelligence presents Pakistan with both a significant challenge and a major opportunity. If adopted without proper planning, it could intensify employment pressures for educated youth. However, with timely investment in digital infrastructure, workforce training, and job creation, AI could also help improve productivity, strengthen public services, and support long-term economic growth.

The choices made today will determine whether AI widens existing employment gaps or becomes a powerful driver of innovation and opportunity for Pakistan’s next generation.

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