The major achievement includes securing 3,927 kanals of Pakistan Railways land across Islamabad, Rawalpindi, Jhelum, Chakwal and Murree, valued at Rs118 billion.

NAB also helped resolve a long-standing mining lease dispute in Gilgit-Baltistan, securing access to 27.4 million tonnes of Pozzolan deposits worth an estimated Rs123 billion for the Diamer-Bhasha Dam project.

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The revision was introduced through S.R.O. 2086(I)/2026, dated November 5, 2026, under the authority granted by the first proviso to clause (46) of Section 2 of the Sales Tax Act, 1990.

Which Steel Scrap Transactions Are Covered?

The revised valuation applies to remeltable iron and steel scrap classified under Pakistan Customs Tariff (PCT) heading 72.04.

However, the amendment is limited to specific transactions involving direct supplies from manufacturer-cum-exporters of recycled copper who are authorised under the Export Facilitation Scheme (EFS) to registered steel melters.

Therefore, the revised valuation should be considered in the context of the particular suppliers, buyers and transactions identified in the notification.

Minimum Valuation Increased by Five Percentage Points

Under the previous arrangement, the minimum supply value for the specified scrap category was set at 55% of the benchmark value applicable to steel bars. Following the latest amendment, this percentage has been raised to 60%.

The change replaces the existing 55% figure with 60% against serial number 5 of the relevant valuation table.

For illustration, if the applicable benchmark value of steel bars is Rs200,000 per metric tonne, the minimum taxable value would increase from Rs110,000 to Rs120,000 per metric tonne.

This represents a 9.09% increase in the prescribed minimum valuation, although the change in the benchmark percentage is five percentage points.

How Is the Steel Bar Benchmark Determined?

The reference value used for calculating the minimum supply value is linked to the average retail prices of steel bars published monthly by the Pakistan Bureau of Statistics (PBS).

The relevant prices are collected for six major cities:

• Lahore
• Karachi
• Peshawar
• Quetta
• Rawalpindi
• Islamabad

A deduction of Rs1,500 per metric tonne is applied to the benchmark value before the prescribed percentage is used to calculate the minimum taxable supply value.

With the revised percentage, the minimum value of qualifying scrap supplies will now be calculated at 60% of the adjusted steel bar benchmark.

Background of the Latest Amendment

The revised valuation is part of an existing framework introduced through S.R.O. 2402(I)/2025, dated December 10, 2025. This notification established minimum supply values for locally manufactured steel products for sales tax assessment on an ad valorem basis.

Later, through S.R.O. 1829(I)/2026, dated October 15, 2026, the FBR included the specified category of remeltable iron and steel scrap in the valuation table and prescribed a minimum value of 55% of the steel bar benchmark.

The latest notification, S.R.O. 2086(I)/2026, has now revised that percentage to 60%.

Impact on Sales Tax Calculations

The increase does not represent a change in the statutory sales tax rate. Instead, it modifies the minimum taxable value used to calculate sales tax on the specified supplies.

As a result, businesses involved in the covered transactions may face a higher taxable base, potentially increasing the amount of sales tax payable even though the applicable tax rate remains the same.

Registered steel melters and authorised recycled-copper exporters should review their valuation practices, accounting records and sales tax invoicing procedures to ensure compliance with the revised requirement.

Conclusion

The FBR’s latest amendment raises the minimum valuation of specified remeltable iron and steel scrap from 55% to 60% of the adjusted steel bar benchmark. The measure specifically concerns direct supplies made by authorised recycled-copper exporters to registered steel melters.

Businesses operating within this supply chain should take note of the revised valuation and incorporate the new benchmark into their sales tax calculations to maintain compliance with the applicable provisions of the Sales Tax Act, 1990.

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Pakistan’s federal government is considering major changes to the country’s tax administration, including the possibility of establishing a new tax collection agency or further restructuring the Federal Board of Revenue (FBR). The move comes amid concerns over revenue performance and the limited results of previous reform efforts.

Prime Minister Shehbaz Sharif has directed the FBR to prepare a comprehensive reform plan by October 19, covering human resources, institutional restructuring, and administrative improvements. The proposals are expected to help the government determine how Pakistan’s tax collection system can become more effective.

Government Explores Options for Tax Administration Reform

The idea of creating a separate national tax collection agency was discussed during a high-level government meeting held last Saturday. Following the meeting, FBR Chairman Rashid Langrial instructed officials to prepare recommendations for consideration by the prime minister.

However, the government has not yet made a final decision. Discussions are still at an early stage, and officials are examining different approaches to improving the existing system before determining the next course of action.

According to reports published by The Express Tribune, the FBR is working on proposals in line with the prime minister’s instructions. The board has indicated that the current emphasis remains on strengthening existing operations through staffing changes, improved technology, and more efficient administrative procedures.

The FBR has also dismissed speculation that tax collection responsibilities could be handed over to a private company.

What Could a New Tax Agency Mean for the FBR?

One proposal under consideration involves establishing a separate tax collection organisation while allowing the FBR to continue operating alongside it. Under this arrangement, employees who do not move to the new institution could remain in their existing positions until retirement.

Such a change would require significant legal and administrative adjustments. Establishing a new agency with powers currently held by the FBR could involve amendments to the Federal Board of Revenue Act, 2007, as well as changes to other relevant tax laws.

The final structure will depend on the government’s assessment of the available options and the recommendations submitted by the FBR.

Previous Reform Efforts Have Yet to Resolve Key Challenges

Pakistan has attempted to modernize its tax administration several times over the past two decades. These initiatives have included transforming the Central Board of Revenue into the FBR, reorganizing employee service structures, and introducing changes to the institution’s operational framework.

In 2024, the government also launched a transformation programme worth more than Rs55 billion to improve the tax system. An earlier proposal under the caretaker government sought to separate Customs operations from Inland Revenue functions.

Despite these efforts, concerns about revenue collection and the country’s narrow tax base remain central to the government’s economic agenda. The latest discussions reflect another attempt to address longstanding structural challenges within the tax administration.

Pakistan Faces Pressure to Increase Tax Revenue

The proposed reforms come at a time when Pakistan is under pressure to strengthen public finances and improve domestic revenue generation.

The country’s tax-to-GDP ratio stood at 10.3% in the previous fiscal year, while the FBR collected more than Rs1.1 trillion less than its original annual target. These figures highlight the gap between the government’s revenue ambitions and actual collection performance.

For the current fiscal year, the government has set an ambitious tax collection target of Rs15.263 trillion. Achieving this goal would require revenue growth of more than 17%, placing additional pressure on the tax administration to improve compliance and collection efficiency.

Expanding the number of taxpayers, reducing tax evasion, improving documentation of economic activity, and making tax procedures more transparent are among the broader issues facing Pakistan’s revenue system.

Technology and Administrative Changes Could Play a Key Role

Whether the government establishes a new agency or restructures the FBR, the effectiveness of the reforms will depend on their implementation.

Better digital systems could help identify undeclared economic activity, improve monitoring, and reduce opportunities for errors or manipulation. Clearer accountability mechanisms and more efficient internal processes could also support better performance.

At the same time, institutional restructuring alone may not be sufficient to address the country’s revenue challenges. Sustainable improvements will also depend on broader tax policy, compliance, public confidence, and the government’s ability to bring more economic activity into the documented tax system.

October 19 Deadline Could Shape the Next Phase

Prime Minister Shehbaz Sharif is expected to review the FBR’s reform proposals on October 19. The review could help clarify whether the government intends to retain the existing institutional structure with significant changes or move towards creating a separate tax collection agency.

For now, the proposal remains under consideration, and no final policy decision has been announced.

The outcome could have important implications for Pakistan’s tax administration, government revenue, and the way individuals and businesses interact with the tax system. The key question is whether the proposed changes will deliver lasting improvements in tax collection, institutional accountability, and compliance.

Ultimately, the success of the reform process will be measured not simply by the creation of a new organization or changes to the FBR’s structure, but by its ability to produce more consistent revenue growth and a more transparent, efficient tax system.

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Pakistan’s agricultural sector could see significant changes under a new proposal by the Securities and Exchange Commission of Pakistan (SECP) to establish a national agricultural spot market. The proposed initiative aims to create a more organized system for buying and selling agricultural commodities while helping farmers secure better prices, reduce crop wastage and obtain financing through formal channels.

The planned digital marketplace would bring farmers, commodity buyers, warehouse operators and banks onto a common platform. By introducing transparent trading procedures and modern storage arrangements, the initiative seeks to address some of the longstanding problems affecting Pakistan’s agricultural supply chain.

SECP Introduces a New Vision for Agricultural Markets

SECP Chairman Dr Kabir Ahmed Sidhu presented the proposal at the Pakistan Institute of Development Economics’ international conference, “Mission 100 Billion Dollars.”

The proposed system would rely on digital trading, standardized commodity grading and electronic warehouse receipts to improve the efficiency of agricultural transactions. Rather than depending entirely on traditional market arrangements, farmers could access a more transparent mechanism for finding buyers and negotiating prices.

Under the suggested framework, provincial authorities would continue regulating agricultural markets, while the SECP would help develop the technological systems needed to support the initiative.

The proposal reflects an effort to modernize agricultural commerce and establish stronger links between farming, financial services and commodity markets.

Reducing Agricultural Waste Could Deliver Major Economic Benefits

Crop losses after harvesting remain a significant challenge for Pakistan. Inadequate storage, inefficient transportation and limited access to suitable facilities can force farmers to sell produce quickly or allow crops to deteriorate before reaching consumers.

According to figures presented by the SECP chairman, post-harvest losses are estimated at between 20 and 40 per cent. With crop production valued at approximately Rs8.8 trillion, these losses represent a substantial economic burden.

Agriculture accounts for around 23.44 per cent of Pakistan’s gross domestic product, making improvements in this sector important for rural livelihoods and overall economic performance.

Sidhu estimated that reducing crop losses by just one percentage point could preserve approximately Rs88 billion in economic value.

Expanding storage facilities and improving supply chain management could therefore help farmers retain more of their produce, reduce unnecessary waste and increase the availability of agricultural commodities in domestic markets.

Limited Storage Capacity Remains a Major Concern

Pakistan’s existing warehouse infrastructure is considerably smaller than the volume of agricultural commodities produced each year.

The SECP chairman cited approved warehouse capacity of approximately 326,000 metric tonnes, compared with annual production of around 55.7 million metric tonnes of dry agricultural commodities suitable for conventional storage.

This imbalance highlights the need for investment in modern warehouses, temperature-controlled storage and more efficient distribution networks.

Better storage facilities would allow farmers to preserve crop quality for longer periods. They could also help stabilize supplies, reduce seasonal pressure on prices and improve the reliability of agricultural exports.

Encouraging private investment in storage infrastructure could be an important part of addressing this challenge.

Digital Warehouse Receipts Could Open New Financing Opportunities

One of the most important elements of the proposed marketplace is its plan to introduce electronic warehouse receipts.

Under the proposed arrangement, farmers would store their produce in approved warehouses and receive electronic documents confirming the quantity and ownership of their stored commodities. These receipts could then be presented to banks as collateral for loans.

This mechanism could give farmers greater financial flexibility after harvesting. Many producers need immediate cash to repay existing debts, cover household expenses or prepare for the next growing season. As a result, they may have little choice but to sell their crops when market prices are relatively low.

Access to loans against stored produce could reduce this pressure and allow farmers to make selling decisions based on market conditions rather than urgent financial needs.

The system could also help connect agricultural production with formal banking services, although its success would depend on reliable warehouse operations, appropriate lending arrangements and effective protection against fraud.

Wheat, Rice, Maize, Cotton and Sugar in the Initial Phases

The SECP has proposed introducing the digital marketplace in stages, initially focusing on wheat, rice, maize, cotton and sugar.

Standardized grading and quality assessment would help ensure that commodities are evaluated according to consistent requirements. Transparent bidding would allow buyers to compete for available produce, potentially improving price discovery.

Digital records of transactions and commodity inventories could also make it easier to monitor market activity and reduce opportunities for manipulation.

The proposal further calls for the registration of traders and commission agents to improve accountability across the trading process.

However, digital systems will need to be supported by reliable payment arrangements, clear rules for resolving disputes and practical procedures for moving commodities between markets and storage facilities.

Better Price Discovery Could Strengthen Farmers’ Bargaining Power

Farmers often have limited access to information about prevailing prices in different markets. This can weaken their negotiating position, particularly when they depend on intermediaries to sell their produce.

A nationwide digital platform could help address this information gap by making bids and trading activity more transparent.

With access to a broader pool of buyers, farmers could potentially identify more competitive offers and make better-informed selling decisions. Standardized quality assessments could also help buyers distinguish between different grades of produce and pay accordingly.

Nevertheless, better prices would not be guaranteed automatically. The actual benefits would depend on the number of active buyers, the competitiveness of bidding, transportation costs and farmers’ ability to access the platform.

Ensuring that smallholders can participate on fair terms will be essential to achieving the proposal’s intended goals.

Coordination and Infrastructure Will Be Critical

Establishing a national agricultural spot market will require cooperation among provincial governments, financial institutions, warehouse operators, traders and technology providers.

Provincial differences in agricultural market regulations, licensing requirements, fees and commodity transportation procedures could create implementation challenges if they are not addressed effectively.

The country will also need sufficient certified warehouses, dependable quality inspection services and secure electronic recordkeeping systems.

Farmer awareness will be another important consideration. Training and accessible digital services could help rural communities understand how to use the platform, obtain financing and participate in competitive trading.

Without these supporting measures, the marketplace may struggle to deliver its full potential.

SECP Also Targets Broader Financial Market Reforms

In addition to the agricultural initiative, the SECP chairman discussed plans to expand participation in Pakistan’s capital markets.

The regulator aims to increase the stock market investor base to 2.5 million through measures that include financial education campaigns for young people and simpler procedures for opening investment accounts.

The SECP also highlighted the importance of investor protection, dependable financial reporting and stronger supervision of audit firms. An independent legal framework for overseeing audit firms was discussed as a way to improve corporate disclosures and reinforce confidence in the financial system.

These measures form part of a broader effort to encourage financial inclusion and improve transparency across Pakistan’s markets.

Conclusion

The proposed national agricultural spot market offers Pakistan an opportunity to improve agricultural trading through digital technology, better storage and stronger connections with the banking sector.

By enabling farmers to store their crops, access financing and participate in more transparent bidding, the initiative could help reduce post-harvest losses and improve their ability to negotiate competitive prices.

However, achieving these outcomes will require more than a digital platform. Investment in warehouses, effective regulation, reliable payments and inclusive access for small-scale farmers will be equally important.

If implemented successfully, the proposal could contribute to a more efficient agricultural supply chain, stronger rural incomes and a more resilient economy. The key challenge will be ensuring that the planned reforms translate into practical, measurable benefits for farmers throughout Pakistan.

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The Securities and Exchange Commission of Pakistan (SECP) has introduced a new guidebook on Targeted Financial Sanctions (TFS) to improve regulatory compliance and strengthen efforts to prevent terrorist financing and other illegal financial activities.

The guidebook provides practical instructions for entities operating under SECP’s regulatory oversight, helping them understand and implement applicable sanctions requirements. The initiative is aimed at reducing the risk of financial services being exploited by individuals or organizations involved in terrorism, proliferation financing, or other illicit activities.

Key Requirements Under the New Guidebook

The guidebook highlights several important responsibilities that regulated entities must fulfil to ensure compliance with Pakistan’s applicable financial sanctions framework.

1. Screening Customers and Beneficial Owners

Regulated entities are expected to screen existing customers, potential clients and beneficial owners against relevant sanctions lists and official notifications. This process helps identify individuals and organizations that may be subject to financial restrictions.

Regular screening and effective monitoring are essential to ensure that potential matches are identified and assessed promptly.

2. Freezing Funds and Assets Without Delay

When a person or entity is identified as designated under the applicable sanctions regime, regulated entities must take the required action to freeze the relevant funds and assets without delay.

These measures are intended to prevent designated individuals and organizations from accessing or moving financial resources in violation of applicable sanctions requirements.

3. Reporting to Relevant Authorities

The guidebook emphasizes the importance of reporting required actions to the appropriate authorities within the prescribed timeframes. Regulated entities should maintain clear procedures for escalating potential sanctions matches, documenting decisions and submitting reports as required by law and regulation.

Timely reporting supports regulatory oversight and strengthens efforts to prevent the misuse of the financial system.

4. Strengthening Internal Compliance Controls

In addition to screening and reporting, the guidebook addresses the need for effective internal compliance arrangements. These include maintaining accurate records, conducting regular sanctions checks, raising employee awareness and establishing monitoring mechanisms to identify potential risks.

Organizations should periodically review their existing controls to identify weaknesses and ensure that their compliance procedures remain effective.

SECP Highlights the Importance of AML/CFT/PF Compliance

The introduction of the guidebook follows awareness sessions organized by SECP in collaboration with the National Counter Terrorism Authority (NACTA).

These sessions were designed to improve understanding of Pakistan’s Anti-Money Laundering, Countering Financing of Terrorism and Proliferation Financing (AML/CFT/PF) framework among entities regulated by SECP.

The initiative reflects the importance of cooperation between regulatory authorities and the financial sector in promoting responsible business practices and preventing financial services from being used for unlawful purposes.

What the Guidebook Means for Regulated Entities

The new resource encourages regulated organizations to assess whether their existing policies, procedures and systems adequately address targeted financial sanctions obligations.

Businesses may need to review their customer screening processes, strengthen internal reporting channels, update compliance documentation and provide appropriate training to employees responsible for identifying and managing sanctions-related risks.

A proactive approach can help organizations reduce regulatory exposure, improve operational controls and respond more effectively to potential sanctions matches.

However, the guidebook is intended to serve as a practical reference rather than a replacement for existing legal requirements. Regulated entities must continue to comply with applicable laws, regulations, directives and official notifications.

Strengthening Pakistan’s Financial Security

Targeted financial sanctions are an important tool for restricting access to financial resources by designated individuals and entities. Effective implementation depends on timely screening, appropriate asset-freezing measures, accurate reporting and strong internal controls.

Through this guidebook, SECP aims to encourage a more consistent approach to sanctions compliance across the sectors under its supervision. The initiative also reinforces the role of regulated entities in protecting the integrity of Pakistan’s financial system and reducing the risks associated with terrorist financing and proliferation financing.

Conclusion

SECP’s new Targeted Financial Sanctions guidebook is a practical step toward improving compliance standards and strengthening financial safeguards in Pakistan. By clarifying key responsibilities related to customer screening, asset freezing, reporting and internal monitoring, the guidebook can help regulated entities better understand their obligations.

Organizations should review their existing compliance frameworks and address any gaps to ensure that their practices remain aligned with applicable regulatory requirements. Strong sanctions compliance not only supports legal and regulatory adherence but also contributes to a more secure, transparent and resilient financial system.

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Pakistan may attract fresh Chinese investment as Shengtang Group has expressed interest in signing a $10 million memorandum of understanding (MoU) to explore business opportunities in seven important sectors of the country. The proposed investment could support industrial growth, infrastructure development, energy projects, and other areas linked to Pakistan’s economic progress.

According to a statement from Pakistan’s Ministry of Industries and Production, representatives of the Chinese company discussed potential investment opportunities during a meeting with Haroon Akhtar Khan, Adviser to the Prime Minister on Industries and Production.

Seven Sectors Under Consideration

Shengtang Group has shown interest in exploring opportunities across a range of industries that could contribute to Pakistan’s economic development. The sectors under consideration include:

• Industrial development: Expanding industrial activities and supporting local manufacturing.
• Infrastructure: Exploring projects that could improve facilities and support economic connectivity.
• Tourism: Identifying opportunities to develop tourism-related businesses and services.
• Electric vehicles (EVs): Exploring investment in the growing electric mobility sector.
• Railways: Considering opportunities to support railway development and transportation infrastructure.
• Energy: Looking into projects that could contribute to the country’s energy sector.
• Urban development: Exploring initiatives related to urban infrastructure and city development.

Investment across these sectors could create opportunities for collaboration between Pakistani businesses and Chinese investors. However, the projects, funding arrangements, and implementation timelines have yet to be confirmed.

Pakistan Highlights Reforms to Attract Chinese Investors

During the meeting, Haroon Akhtar Khan highlighted the government’s efforts to improve the business environment and make investment procedures more convenient for foreign companies.

He said the government was introducing business-friendly regulatory changes and had issued instructions to relevant authorities to facilitate Chinese investors. The measures are intended to improve the ease of doing business and encourage greater participation from international companies.

The adviser also discussed the land-lease model, which offers a potential mechanism for investors seeking land for industrial and commercial development. Such arrangements could help businesses explore opportunities without necessarily purchasing land outright, depending on the applicable terms and conditions.

Stronger Economic Cooperation Between Pakistan and China

Pakistan and China have maintained close economic ties, with cooperation extending across infrastructure, industrial development, energy, and other areas. The proposed interest from Shengtang Group represents another potential opportunity to expand commercial engagement between the two countries.

Khan emphasized the government’s intention to translate Prime Minister Shehbaz Sharif’s vision for stronger relations with China into practical economic outcomes.

He also stated that around 40% of joint ventures and memorandums of understanding signed between Pakistan and China had moved into the implementation stage. This figure was cited by the adviser during the meeting and points to the government’s stated focus on advancing bilateral initiatives beyond the agreement stage.

Potential Benefits for Pakistan’s Economy

If the proposed investment progresses into concrete projects, it could offer several potential benefits for Pakistan.

Employment opportunities: Industrial and infrastructure projects may generate jobs during construction, operations, and supporting business activities.

Technology transfer: Cooperation with Chinese companies could create opportunities for Pakistani businesses to gain access to new technologies, technical expertise, and industrial processes.

Industrial expansion: New investment could help strengthen manufacturing capacity, encourage local production, and support related supply chains.

Development of emerging industries: Interest in electric vehicles could open further opportunities in vehicle assembly, charging infrastructure, and associated services, depending on the projects eventually pursued.

Greater foreign investment: Progress on the proposed MoU could encourage other international investors to examine opportunities in Pakistan.

These outcomes will depend on the scale of the projects, the financing arrangements, regulatory approvals, and the extent to which the proposed initiatives move forward.

What Happens Next?

Although Shengtang Group has expressed interest in a $10 million MoU, the proposal should not yet be treated as a completed investment. Further details about the agreement, the allocation of funds across the seven sectors, and the schedule for implementation would be needed to assess its likely economic impact.

The next important step will be to determine whether the parties formalize the proposed agreement and develop specific projects from the discussions.

For Pakistan, converting investment interest into operational businesses and completed projects remains essential to achieving lasting economic benefits. Effective implementation, a predictable regulatory environment, and coordination between investors and government institutions will be important factors in this process.

Conclusion

Shengtang Group’s interest in a proposed $10 million MoU signals a potential new avenue for economic cooperation between Pakistan and China. With opportunities spanning industry, infrastructure, tourism, electric vehicles, railways, energy, and urban development, the discussions cover several areas relevant to Pakistan’s development priorities.

While the proposal is still at the expression-of-interest stage, successful negotiations and project implementation could create opportunities for employment, technology transfer, industrial growth, and stronger commercial ties. The actual benefits will become clearer as further details emerge and the proposed investment moves, if it does, toward implementation.

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The World Bank has proposed $200 million in financing to help Khyber Pakhtunkhwa (KP) strengthen its revenue collection system, improve public services and manage its finances more effectively. The initiative aims to nearly double the province’s own-source tax revenue in real terms, increasing it from Rs64 billion to Rs122 billion by June 2031.

The proposed initiative, titled the Pakistan Public Resources for Inclusive Development Multiphase Programmatic Approach for KP, carries a total estimated cost of $650 million. Of this amount, $200 million would come from the World Bank, while the provincial government would contribute the remaining $450 million.

According to the programmed document, the initiative is expected to cover FY2027 to FY2032, with approval scheduled for October 29, 2026.

Expanding KP’s Tax Base

A major objective of the proposed programmed is to reduce KP’s reliance on financial transfers from the federal government by increasing revenue generated within the province.

The province’s own tax receipts currently account for a relatively small and declining portion of its expenditure. At the same time, growing salary and pension obligations, inflation and additional spending requirements in the merged districts have placed considerable pressure on public finances.

To address these challenges, the proposed reforms will focus on expanding the tax base, simplifying tax procedures and improving the efficiency of revenue collection. Digital systems are also planned for the KP Revenue Authority, the Excise, Taxation and Narcotics Control Department, and the Board of Revenue.

The World Bank has identified weaknesses in property taxation, agricultural income taxation and the taxation of certain services as areas requiring attention. Fragmented administrative arrangements and limited information sharing between government departments have also restricted the province’s ability to collect revenue effectively.

Improving Healthcare and Education

Alongside tax reforms, the programmed seeks to improve how public funds are allocated and spent, particularly in the health and education sectors.

The proposed measures include better budgeting, more efficient procurement procedures and stronger financial management systems. These changes are intended to ensure that government resources are used more effectively and that essential services reach the people who need them.

By June 2031, the initiative aims to bring 60% of primary schools that currently fail to meet minimum functional standards into compliance.

It also seeks to introduce electronic verification and payment systems for 60% of contractual payments. In addition, the programmed targets a 15% reduction in procurement cycle times in healthcare and primary education.

If implemented effectively, these measures could improve transparency, reduce administrative delays and help public institutions deliver services more efficiently.

Addressing Major Social Challenges

The proposed reforms come at a time when KP continues to face significant challenges related to poverty, education and public health.

According to the World Bank figures cited in the programmed document, 35.3% of the province’s population lived below the national poverty line in FY2025. Approximately 40% of children under the age of five were affected by stunting, highlighting persistent nutritional and healthcare concerns.

Education indicators also remain troubling. Around 36% of school-age children were out of school, while only 58% of children were fully immunized.

These figures underline the importance of strengthening public institutions and directing government spending towards essential services. Although higher tax revenue alone will not resolve these problems, improved fiscal management could provide the provincial government with greater capacity to finance development priorities.

A New Digital Hub for Better Planning

Another important component of the initiative is the establishment of a KP Development Data Hub.

The proposed platform would help consolidate economic information, connect administrative records and improve access to reliable government data. Better information could enable policymakers to identify service delivery gaps, monitor public spending and make decisions based on evidence rather than incomplete records.

Digital reforms, however, will need to be accompanied by appropriate safeguards. The World Bank has classified the programmer’s environmental and social risks as moderate, identifying concerns that include digital exclusion, data privacy and the potential distributional effects of agricultural income tax reforms.

Ensuring that digital services remain accessible and that tax changes are implemented fairly will therefore be important aspects of the programmed.

Financing Structure and Implementation Timeline

The proposed $200 million World Bank contribution would consist of a $100 million International Development Association (IDA) credit and a further $100 million IDA loan. The provincial government would provide an estimated $450 million towards the overall programmed cost.

The initiative is expected to run from FY2027 through FY2032, while the central tax revenue target is set for June 2031. World Bank approval is scheduled for October 29, 2026, meaning the financing remains proposed as of October 12, 2026.

The programmer’s effectiveness will ultimately depend on the implementation of its planned reforms, the strength of institutional coordination and the provincial government’s ability to maintain consistent progress towards its targets.

Conclusion

The World Bank’s proposed financing represents a significant opportunity for Khyber Pakhtunkhwa to strengthen its fiscal position and improve the delivery of essential public services.

Raising own-source tax revenue from Rs64 billion to Rs122 billion in real terms would give the province greater capacity to finance its priorities and reduce its dependence on federal transfers. At the same time, improvements in education, healthcare, procurement and digital governance could help ensure that public resources are used more productively.

However, achieving these objectives will require more than changes to tax administration. Transparent implementation, effective oversight, fair taxation and a clear focus on public service outcomes will be essential to turning the proposed investment into lasting benefits for the people of KP.

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The facility is particularly relevant to steel melters, re-rollers and composite units, which are required to declare electricity consumption through Annex-K of their sales tax returns.

New solution for delayed electricity data

Under the existing sales tax framework, electricity consumption data for steel units is generally transferred automatically to Annex-K after the relevant electricity distribution company submits its Annex-C information.

However, delays or omissions by distribution companies can create problems for steel manufacturers. Without the required electricity consumption figures, taxpayers may face difficulties in completing Annex-K and determining their correct sales tax liability.

To address this issue, the FBR has developed an online approval facility that allows taxpayers to seek inclusion of their electricity units when the normal automated process has not provided the data.

How the new mechanism works

Steel manufacturers facing this issue can submit an application through the IRIS system to their respective Chief Commissioner of Inland Revenue.

The application must be supported by the relevant electricity bills and other required information. The Chief Commissioner will review and verify the documents before approving the electricity consumption figures.

Once the application is approved, the authorized electricity units will be entered into the system and will subsequently appear automatically in the taxpayer’s Annex-K.

Importance of Annex-K for steel manufacturers

The filing of Annex-K is a mandatory requirement for steel melters, re-rollers and composite units under the 13th Schedule of the Sales Tax Act, 1990.

Electricity consumption is an important component in determining the sales tax liability of these businesses. Consequently, missing or delayed electricity data can potentially disrupt the return-filing process.

The new facility is therefore intended to prevent taxpayers from being penalized or delayed because of reporting issues attributable to electricity distribution companies.

Taxpayers can avoid waiting for DISCO returns

Previously, a steel manufacturer could be left waiting for the relevant distribution company to submit its return before the electricity consumption data became available in Annex-K.

With the new arrangement, taxpayers have a formal route to request the required electricity units directly through the tax authority’s online system.

This should make the sales tax filing process more efficient and allow eligible steel manufacturers to complete their returns within the prescribed deadlines.

FBR directs field offices to process applications

The FBR has instructed Chief Commissioners of Inland Revenue to deal with these applications within the applicable statutory time limits. It has also directed its field formations to make use of the newly introduced online facility.

The measure effectively places greater responsibility on tax offices to verify genuine electricity consumption claims where the automated data-sharing mechanism between taxpayers and distribution companies does not work as intended.

What steel manufacturers should do

Eligible taxpayers whose electricity consumption is missing from Annex-K should:

1. Check their electricity bills and consumption records.
2. Confirm that the relevant units have not been reported through the normal automated process.
3. Submit the required application through IRIS within the applicable statutory period.
4. Provide the necessary electricity bills and supporting information.
5. Obtain approval from the concerned Chief Commissioner.
6. Verify that the approved consumption figures appear in Annex-K before completing the sales tax return.

Conclusion

The FBR’s new online facility is aimed at resolving a practical problem faced by steel manufacturers when electricity distribution companies fail to report consumption data or submit their returns late.

By allowing verified electricity consumption to be approved through the IRIS system, the FBR has provided steel melters, re-rollers and composite units with a mechanism to complete their Annex-K requirements without unnecessarily waiting for delayed DISCO reporting.

The initiative is expected to make sales tax compliance smoother for the steel sector while ensuring that electricity consumption used for calculating tax liability is supported by verified documentation.

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The two companies have signed a Memorandum of Understanding (MoU) to examine investment opportunities worth approximately Rs20 billion in Pakistan’s gas and upstream energy industry over the next three to five years.

Focus on Gas Development and Monetization

The proposed partnership will explore several areas of the energy value chain, including upstream gas development, field expansion, gas processing, production improvement and the sale of gas to third-party buyers.

A key area of interest will be the development of stranded and low-pressure gas resources. Such resources can be challenging to commercialize because of technical and economic constraints. The companies intend to examine ways of using modern technology and processing solutions to convert these resources into commercially usable gas.

The partnership also comes at a time when Pakistan’s regulatory framework is creating new opportunities for gas producers.

New Opportunities for Third-Party Gas Sales

Recent changes to the Petroleum (Exploration & Production) Policy 2012 have allowed exploration and production companies to sell up to 35% of their pipeline-quality gas to licensed third-party buyers through a competitive process.

This regulatory development could provide additional opportunities for companies seeking to process, transport and market gas outside traditional arrangements.

For Shaheen Energy, the new framework could complement its existing involvement in gas processing and third-party gas sales. The company has been working with exploration and production companies to develop solutions for processing and commercializing natural and flare gas.

Shaheen Energy’s Processing Capabilities

Shaheen Energy already operates a gas-processing facility at the Sinjhoro field, with a designed capacity of around 10 million standard cubic feet per day (MMSCFD).

The facility currently handles approximately 8–10 MMSCFD of low-pressure permeate gas. Its membrane-based technology is designed to remove carbon dioxide and improve the quality of the gas so that it can meet pipeline requirements.

This existing infrastructure gives Shaheen experience in dealing with gas that might otherwise be difficult to bring into the commercial market.

Anton to Bring International Oilfield Expertise

China-based Anton Oilfield Services Group will contribute its international experience and technical capabilities to the proposed cooperation.

The company provides a range of oilfield services, including drilling and completion, reservoir engineering, production enhancement, field management and energy-resource commercialization. Its operations extend across more than 30 countries and regions.

Through the partnership, Anton’s technical expertise could be combined with Shaheen Energy’s local knowledge, processing facilities and experience in Pakistan’s gas market.

Potential Impact on Pakistan’s Energy Sector

Pakistan continues to face challenges related to energy supply, domestic gas availability and the utilization of existing resources. Developing low-pressure and stranded gas could provide an additional source of commercially usable energy if projects prove technically and financially viable.

The proposed cooperation also highlights the growing role of technology in Pakistan’s upstream energy industry. Advanced processing and production-enhancement techniques can potentially help companies extract greater value from existing fields.

However, the Rs20 billion figure represents investment opportunities that the two companies intend to explore under the MoU; it should not be interpreted as a confirmed investment commitment at this stage. Specific projects would still need to undergo commercial, technical, regulatory and financing assessments.

Looking Ahead

The Shaheen Energy–Anton partnership reflects an effort to combine local expertise with international oilfield technology to identify new opportunities in Pakistan’s gas sector.

Over the proposed three-to-five-year period, the companies will assess projects ranging from gas processing and production enhancement to field development and third-party gas sales.

If commercially viable projects emerge from the cooperation, the initiative could contribute to the broader effort to monetize underutilized gas resources and strengthen Pakistan’s domestic energy infrastructure.

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The price adjustments come after weeks of uncertainty in the automotive market, during which many buyers reportedly held back from purchasing vehicles while waiting for clarity on taxation and the government’s upcoming automotive policy.

Honda Announces Major Price Reductions

Honda Atlas Cars has introduced significant price cuts on its hybrid and related models.

The Honda HR-V e has received the largest reduction, with its price falling from Rs10.369 million to Rs9.299 million. This represents a decrease of Rs1.07 million.

Meanwhile, the Honda HR-V VTi-S has been reduced from Rs7.799 million to Rs7.299 million, bringing its price down by Rs500,000.

Honda has stated that the revised prices are applicable to limited stock and will remain available for a limited period. The new prices apply to vehicles invoiced from September 25 onward.

Toyota Also Cuts Hybrid Prices

Toyota has followed the trend by lowering prices for its Corolla Cross hybrid lineup.

The Toyota Corolla Cross HEV X is now available at Rs9.729 million after a reduction of Rs570,000. The standard Corolla Cross HEV has also become cheaper, with its price falling by Rs550,000 to Rs9.299 million.

The reductions reflect the impact of the lower GST rate and could help make hybrid vehicles somewhat more accessible to consumers.

Tax Uncertainty Had Slowed the Market

The automotive sector has been dealing with considerable uncertainty since the previous tax structure and automotive policy framework expired.

The Automotive Industrial Development Policy 2021–26 ended on June 30. Under the previous framework, electric vehicles benefited from a considerably lower GST rate of 8.5%.

A new automotive policy was expected to replace the expired framework, but delays in announcing the new policy have created uncertainty for manufacturers, dealers and consumers.

Some assemblers reportedly postponed vehicle invoicing during July and August as they waited for clarification regarding taxes and tariff arrangements.

Automakers Expect Demand to Recover

Industry representatives believe the reduction in GST could help revive vehicle sales. The earlier 25% GST rate reportedly contributed to weaker demand, with some consumers delaying purchases in anticipation of a lower tax burden.

With the new 18% rate now in effect, manufacturers expect deliveries and sales activity to gradually return to normal. Many vehicles that were already booked are expected to reach customers over the next couple of months.

However, uncertainty has not completely disappeared. The industry is still waiting to see whether the 18% GST rate will remain in place or whether the government’s new automotive policy will introduce further changes.

Pakistan’s Growing Electrified Vehicle Market

The latest price cuts come at a time when Pakistan’s market for hybrid, electric and other new-energy vehicles is expanding.

Mega Motor Company, the local partner of Chinese automaker BYD, recently announced that 10,000 BYD vehicles had been placed on Pakistani roads. The company described this as a significant milestone for a new entrant in Pakistan’s new-energy vehicle market.

The development highlights the growing competition in Pakistan’s automotive sector as established manufacturers and newer electric-vehicle companies compete for consumers.

What It Means for Buyers

The reduction in GST has already translated into substantial price cuts on some popular hybrid models, with savings reaching more than Rs1 million in the case of the Honda HR-V e.

For consumers, however, the longer-term direction of vehicle prices will depend partly on the government’s forthcoming automotive policy and whether the current GST rate remains unchanged.

For now, the lower tax rate is giving the hybrid vehicle market a boost after several months of uncertainty, while manufacturers wait for greater clarity on Pakistan’s future automotive policy.

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According to reports, the raids were carried out at several locations in the capital, particularly in the E-11 and G-10 areas. A total of 212 individuals were reportedly taken into custody during the operation. The detainees are said to include both Pakistani and Chinese nationals, as well as men and women.

Large Quantity of Digital Equipment Seized

The operation also resulted in the seizure of a significant amount of electronic equipment. Authorities reportedly recovered 306 mobile phones, 383 computers and CPUs, and 299 laptops and monitors from the targeted premises.

Investigators are examining the seized devices and server information to determine how the alleged operations were organized and whether additional individuals or locations were involved.

Alleged Dating and Investment Scams

Initial findings reportedly suggest that the suspected networks used online dating platforms to approach potential victims. According to investigators, individuals allegedly established personal relationships with targets before introducing them to fake online task or investment schemes.

Victims were allegedly encouraged to deposit money into platforms that appeared to offer financial returns. Such schemes can create the impression of legitimate investment or employment opportunities while ultimately being designed to obtain money from users.

The NCCIA has also reportedly identified alleged international connections involving countries including India and Brazil.

Raids Conducted in G-10

As part of the operation, NCCIA teams reportedly conducted raids at FFK Lodhi Call Center in G-10 Markaz and another facility located near the Passport Office in G-10/4.

Digital devices, electronic equipment and server-related data were collected from the premises for further forensic analysis. Investigators are expected to examine the information to establish the scale of the alleged activities and identify any wider network.

Legal Proceedings Underway

The Islamabad Cyber Crime Reporting Centre has reportedly registered two cases in connection with the investigation. The cases invoke provisions of the Prevention of Electronic Crimes Act (PECA) 2016 as well as relevant sections of the Pakistan Penal Code, including provisions concerning cheating, impersonation, common intention and abetment.

The investigation is still in progress. Authorities are working to establish the roles of those detained and determine whether other people were involved in the alleged fraud operations.

The crackdown highlights the growing challenge posed by sophisticated online scams that combine social engineering, fake investment opportunities and digital communication platforms. For internet users, the case also serves as a reminder to remain cautious when strangers online request money, promote unfamiliar investment platforms or promise unusually high financial returns.

It is important to note that the allegations remain subject to investigation and legal proceedings, and detention does not by itself establish an individual’s guilt.

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The latest measures are aimed at reducing the financial burden on businesses involved in aviation and shipbuilding while also bringing changes to taxes charged on premium international air travel.

Sales Tax Relief Extended to All Local Airlines

Under the revised policy, airlines registered in Pakistan will be able to benefit from a sales tax exemption on the import or lease of aircraft and aircraft components.

The Federal Board of Revenue has introduced the exemption through S. No. 181A, covering aircraft and related parts brought into the country or acquired through leasing arrangements by registered airlines.

The move could provide considerable financial relief to carriers looking to expand their fleets, replace aging aircraft or obtain spare parts. Aircraft acquisition and leasing represent some of the largest expenses for an airline, meaning the removal of sales tax could help reduce upfront costs.

The broader eligibility also creates a more level playing field among Pakistan’s locally registered airline operators.

Shipping Industry Gets Tax Exemption Restored

The FBR has also revived a sales tax exemption for ships imported under the Pakistani flag.

This exemption had been removed in 2021, but the latest decision brings it back as part of efforts to support the country’s maritime sector.

In addition, machinery, plant and other capital equipment imported for shipbuilding purposes will also receive sales tax relief. The measure is expected to lower the cost of investment in ship construction and related infrastructure.

By reducing import-related taxes on essential equipment, the government hopes to encourage investment and strengthen domestic shipbuilding capabilities.

New FED Rates for Premium Air Tickets

Alongside the sales tax changes, the FBR has revised the Federal Excise Duty (FED) structure applicable to club, business and first-class international air tickets.

Previously, fixed FED charges could become disproportionately expensive, with the tax in some cases reportedly exceeding the actual price of a ticket.

The revised system sets specific amounts depending on the passenger’s destination:

• North America: Rs50,000 per ticket

• Europe: Rs40,000 per ticket

• Far East and Australia: Rs40,000 per ticket

• Middle East: Rs25,000 per ticket

The new rates are intended to make the tax burden more consistent and prevent unusually high duties on premium air travel.

What the Changes Mean for Pakistan

The government’s latest tax measures represent an attempt to provide relief to two important transport industries while maintaining taxation on high-end international air travel.

For airlines, the exemption could make aircraft leasing, purchases and maintenance-related imports less expensive. This may support fleet expansion and potentially improve the ability of local carriers to increase capacity.

For the maritime industry, restoring the ship-import exemption and extending relief to shipbuilding equipment could encourage investment and help develop local capabilities.

However, the ultimate impact on passengers and consumers will depend on how much of the savings airlines and other businesses pass on through lower fares, increased routes or improved services.

Overall, the policy signals greater government support for Pakistan’s aviation and maritime industries, while the revised premium-ticket duty provides a more structured approach to taxing high-end international travel.

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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 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 proposed arrangement comes as Pakistan looks to diversify its sources and routes for importing petroleum products. Concerns over regional instability and the importance of the Strait of Hormuz have encouraged Pakistan to explore alternative options for securing petrol and diesel supplies.

Increasing Fuel Imports from Oman

Pakistan and Oman have already begun increasing their energy cooperation. Discussions between PSO and Oman Trading International started in March 2026 with the objective of bringing additional petroleum cargoes to Pakistan.

During that period, Pakistan received three petrol shipments and one diesel shipment from Omani ports. Further petrol cargoes are also expected, demonstrating growing commercial cooperation between the two countries.

Pakistan Seeks Preferential Fuel Cargoes

Federal Minister for Petroleum Ali Pervaiz Malik recently met Oman’s Ambassador to Pakistan, Fahad Bin Sulaiman Bin Khalaf Alkharusi, to discuss regional energy developments and opportunities for stronger bilateral cooperation.

The petroleum minister emphasized Pakistan’s intention to diversify its energy imports and reduce its exposure to disruptions along traditional supply routes. He also requested that Oman consider providing Pakistan with preferential energy cargoes.

The Omani ambassador welcomed Pakistan’s efforts and indicated that Oman’s authorities would give the request favorable consideration.

Why Oman Is Important for Pakistan

For Pakistan, developing stronger energy links with Oman could provide another option for importing petroleum products. Diversifying suppliers can help improve the country’s ability to maintain fuel availability during periods of international market volatility or disruptions to important shipping routes.

The discussions are also not limited to petroleum imports. Pakistan and Oman are exploring opportunities in the upstream oil and gas sector, including exploration and production activities. Greater cooperation in these areas could potentially strengthen the long-term energy relationship between the two countries.

ECC to Consider Other Financial Proposals

The ECC meeting is also expected to examine several other government proposals. These include the distribution of PASSCO’s wheat stocks, funding related to PIA liabilities, and matters concerning the Roosevelt Hotel.

The committee is also scheduled to consider a proposed Rs43.849 billion National Bank of Pakistan term facility, as well as supplementary grants for the Karachi K-IV water project and security arrangements for the Reko Diq project.

Another proposal concerns the reallocation of funds under the FY2026-27 Public Sector Development Programmed (PSDP) for the automation of Pakistan Post.

Looking Ahead

The proposed PSO-OQ Trading agreement represents another step in Pakistan’s efforts to build a more diversified and resilient energy supply chain. Closer cooperation with Oman could give Pakistan an additional source of petroleum products while opening doors for broader investment in the energy sector.

However, the final outcome will depend on the ECC’s consideration and approval of the proposed arrangements. If approved and implemented effectively, the agreement could become an important component of Pakistan’s strategy to strengthen fuel security and expand its energy partnership with Oman.

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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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According to a report by The Express Tribune, the federal government has allocated Rs30 billion during the current fiscal year to cover interest payments on Rs268.5 billion of PIA’s legacy debt. This allocation is part of a larger Rs73 billion contingency provision linked to privatization-related expenses and the restructuring or closure of certain public-sector entities.

PIA’s Old Debt Remains With the Government

Before the airline was privatized, its substantial commercial liabilities were transferred to the government-owned PIA Holding Company. This effectively separated the airline’s operations from much of its historical debt.

The move was intended to make PIA more attractive to potential investors. However, it also meant that the responsibility for servicing the old debt remained with the public sector.

The debt was reportedly restructured for a period of 10 years at an interest rate of 12%. Based on this arrangement, the total amount paid to banks could reach approximately Rs573 billion, including more than Rs300 billion in interest, if the full repayment schedule is followed.

That makes the legacy debt one of the major continuing costs associated with PIA, even after the airline’s ownership has changed.

A Large Interest Bill Compared With Immediate Sale Proceeds

One of the most striking aspects of the arrangement is the contrast between the government’s annual interest burden and the cash it received from the privatization.

The successful bidder offered Rs135 billion for a 75% stake in PIA. However, the government received only Rs10 billion in immediate cash, while the remaining amount is reportedly being reinvested into the airline.

The government is also expected to sell the remaining 25% stake to the same investor for Rs45 billion in cash.

Against this backdrop, the Rs30 billion annual interest bill is significant. It is roughly three times the Rs10 billion in immediate cash received by the government from the initial 75% stake transaction.

Who Will Pay the Interest?

PIA Holding Company does not have a major independent source of recurring income with which to service the debt. As a result, the Finance Ministry is reportedly providing funds to cover the interest in the form of a loan.

The holding company is expected to repay these amounts using proceeds from the sale of assets, particularly its hotel properties.

This arrangement means that although PIA’s operational management has moved into private hands, the financial consequences of its past losses and borrowing continue to involve the government.

The Rs73 Billion Privatization Contingency

The Rs30 billion allocation is included within a broader Rs73 billion contingency provision.

According to government officials, this fund is designed to deal with unexpected financial requirements arising from privatization transactions, the restructuring of public-sector organizations and the winding down of entities that are no longer considered necessary.

Other planned transactions could also generate legacy liabilities. The government has specifically indicated that entities such as the Pakistan Agriculture Storage and Services Corporation (PASSCO) may require funding as part of the restructuring or winding-down process.

The Privatization Commission, however, has clarified that the Rs73 billion provision does not belong specifically to the commission or the Privatization Division.

Privatization Does Not Automatically Remove Public Debt

The PIA case highlights an important issue surrounding the privatization of loss-making state enterprises.

Selling a state-owned company does not necessarily mean that all of its historical financial obligations disappear. Governments often have to separate old debts and liabilities from the assets being sold to make an enterprise attractive to investors.

From the buyer’s perspective, this can make the company easier to operate and invest in. From the taxpayer’s perspective, however, it can mean that the state continues paying for problems accumulated before privatization.

PIA is therefore entering a new ownership structure while its legacy financial burden remains largely within the public sector.

What This Means for Pakistan

The success of the PIA transaction should ultimately be judged on more than the headline sale price. The government will need to manage billions of rupees in retained liabilities while ensuring that the privatized airline becomes financially sustainable.

If the sale of PIA’s remaining stake and government-owned hotel assets generates sufficient funds, some of the financial pressure could eventually be reduced. But until those liabilities are settled, taxpayers remain exposed to the cost of PIA’s past borrowing.

The episode also raises a broader question about Pakistan’s privatization strategy: does transferring operational control to private investors actually reduce the government’s financial burden, or does it simply move old losses and debt onto the public balance sheet?

PIA’s future performance will provide an important test of whether this model of privatization can deliver long-term savings for the government while giving the airline a genuine opportunity to recover and grow.

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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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