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FINMIN DEFENDS ‘BUDGET STINGS’ AMID ‘PUBLIC OUTCRY’, JOURNALISTS’ PROTEST Thursday, 12 June, 2025 | 15 Zilhaj, 1446
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FBR'S FAILURE TO HOLD TRADITIONAL FINANCE BILL SESSION DRAWS PROTEST AS PUBLIC CONCERN OVER SALARIES AND ONLINE SHOPPING TAXES DOMINATES; INFORMATION MINISTER TARAR APOLOGISES, PLEDGES REDRESS
Rs 20.00 | Vol XV No 334 | 8 Pages | Islamabad Edition
GOVT PROPOSES ALLOCATION OF RS1.75B FOR PMO EXPENSES IN FY26 BUDGET ISLAMABAD
staff RepoRt
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ISLAMABAD
ghulaM abbas
INANCE Minister Muhammad Aurangzeb on Wednesday addressed a post-budget press conference where he defended the government’s fiscal measures, responded to criticism on online shopping taxation and salary adjustments, and unveiled steps to broaden tax enforcement and boost exports. The event, however, began on a contentious note, with journalists staging a walkout over the absence of a technical briefing on the Finance Bill 2025. At the outset, reporters voiced their frustration for not being provided a detailed technical briefing of the finance bill by the Federal Board of Revenue (FBR), a customary post-budget practice. Despite the protest and partial walkout, the press conference continued with the minister flanked by FBR Chairman Rashid Mahmood Langrial and Finance Secretary Imdadullah Bosal.
ONLINE SHOPPING TAXATION AND SALARIED CLASS RELIEF: One of the major themes of the press conference was the taxation of the growing digital economy. Chairman FBR Rashid Mehmood and Member Inland Revenue, Dr. Najeeb Ahmad, explained that e-commerce, particularly in high-value retail categories like electronics and fash-
ion, was being streamlined for tax collection. “Items priced below Rs20,000 sold online are taxed at 0.25%, while boutique fashion items with higher margins are taxed at 2%,” he said. He emphasized that different rates were applied based on actual profit margins and sectoral realities, rather than applying blanket rates. Grocery items, with lower margins, faced a slightly higher effective rate. He also noted that earlier, online cash-on-delivery transactions weren’t being properly documented. “Pakistan is at risk of losing its digital sales tax rights globally as vendors mislabel cross-border digital sales as exports to evade taxes,” he cautioned. Minister Aurangzeb added that two significant measures were being introduced to bring Pakistan’s estimated Rs9.4 trillion cash economy into the tax net. Addressing concerns of the salaried class, the minister reiterated that their relief measures were “symbolic but significant.” The government has proposed a 10% raise in federal salaries and 7% in pensions, linking them to inflation trends. Responding to questions about why the minimum wage remained unchanged at Rs37,000, he said the government sought feedback from industries before making adjustments. “This budget is a signal to the salaried and formal sectors that the government recognises their burden,” Aurangzeb said, while highlighting a 0.5% reduction
Bilawal alleges India ‘sabotaging Trump’s peace efforts on Kashmir’ LONDON
MoNitoRiNg RepoRt
Former foreign minister and PPP Chairman Bilawal Bhutto Zardari on Wednesday condemned India for attempting to “sabotage President Donald Trump’s peace efforts” in South Asia, stressing that Pakistan remains committed to resolving all issues, including Kashmir, through dialogue. Speaking to the media in London, Bilawal’s remarks came against the backdrop of the ongoing IndiaPakistan conflict, triggered by the deadly April 22 attack on tourists in Pahalgam, Occupied Kashmir. India, without presenting evidence, accused Pakistan of backing the attackers, leading to a four-day military standoff between the two countries. A ceasefire was brokered by the United States on May 10. Pakistan, in response, formed a high-level delegation led by Bilawal to present its perspective on the conflict and counter Indian propaganda. After meetings in the
United States, the delegation is currently in the United Kingdom and will head to Brussels next to meet European Commission members. Addressing the press in London, Bilawal stated, “India wants to sabotage President Trump’s peace efforts, but its efforts will be in vain. The US will, if required, drag India to the table, as it is in the global interest that India and Pakistan make peace for regional stability and development.” He emphasized that the Kashmir issue has become a global topic, particularly after Trump’s involvement. “India thought Kashmir was an internal matter, but when President Trump called for mediation, the issue became global,” Bilawal said, noting that India has been forced to accept that Kashmir is a bilateral issue between India and Pakistan. Bilawal also reiterated Pakistan’s stance that all issues, whether Kashmir, water, or terrorism, can be resolved through dialogue. “War is not the solution,” he stated, while criticizing India’s on-
going narrative, which he called based on “lies and propaganda.” On the Indus Water Treaty, Bilawal declared that India had no right to suspend or terminate the treaty. He labeled India’s actions regarding the treaty as a violation of the UN Charter, describing any such move as an “act of war.” Responding to India’s Foreign Minister S. Jaishankar’s recent remarks about the continued right to act against terrorism, Bilawal dismissed them as “war mongering” and noted that India’s threats and escalation rhetoric were signs of regional instability, not strength. Bilawal further accused India of using terrorism as a foreign policy tool, referencing India’s targeting of Sikh activists worldwide. He said, “India has targeted Sikh activists, killed them, or paid criminal gangs to target them. The world knows India’s involvement in such actions, and this is why the international community is not backing them when they raise allegations against Pakistan.”
Remittances surge to $3.68b in May, pushing FY25 inflows to nearly $35b g
WORKER REMITTANCES UP 29% IN 11 MONTHS; MAY SEES 16% MONTHLY JUMP AMID STRONG INFLOWS FROM GULF, UK, AND US KARACHI
MoNitoRiNg Desk
Workers’ remittances to Pakistan rose sharply to $3.68 billion in May 2025, reflecting a 13.67% increase year-on-year and a 16% rise compared to April, according to data released by the State Bank of Pakistan (SBP) on Monday. The steady upward trend in remittance inflows continues to bolster Pakistan’s external account, with cumulative inflows reaching $34.89 billion during the first eleven months (July–May) of FY2024–25. This marks a significant 28.79% increase compared to $27.09 billion received during the same period in the previous fiscal year. The May 2025 inflows were primarily driven by remittances from major host countries of Pakistani migrant workers: n n n n
Saudi Arabia: $913.95 million United Arab Emirates: $754.17 million United Kingdom: $588.1 million United States: $314.69 million
These four countries collectively contributed over 70% of the total remittances received in May, underscoring the continuing reliance on Middle Eastern and Western corridors. May’s figures follow a record-setting March 2025,
when remittances briefly crossed $4.05 billion — a surge attributed to Ramadan and Eid-related transfers, stronger use of formal banking channels, and improved labour market conditions in the Gulf. Analysts also point to enhanced monitoring and incentives for routing remittances through official channels as key drivers of growth throughout the year. During his budget speech for FY2025–26, Finance Minister Muhammad Aurangzeb projected that remittances would close the fiscal year between $37–38 billion, which would be a record high for Pakistan. He noted that these flows, along with improved current account management, are expected to support the SBP’s foreign exchange reserves, which are projected to reach $1 billion. Remittances have emerged as a critical nondebt-creating source of foreign exchange for Pakistan, helping to finance the country’s import bill, stabilize the rupee, and contain the current account deficit. With the country continuing to seek a long-term arrangement with the International Monetary Fund (IMF), rising remittances improve Pakistan’s negotiating leverage by shoring up external buffers. The sharp growth in inflows during FY2025 has also alleviated pressure on the SBP to impose stringent capital controls or restrict imports as seen in earlier years. However, sustainability remains a concern, especially if global oil prices decline or geopolitical instability affects the Gulf labour market, where millions of Pakistanis are employed.
The federal government has proposed an allocation of Rs 1.754 billion for the Prime Minister’s Office (PMO) expenses in the 2025-26 budget, marking an increase from the current fiscal year’s revised budget of Rs 1.453 billion. The proposed allocation includes over Rs 87 million for the internal expenses of the PMO, while Rs 896.542 million is earmarked for public-related expenditures. This is part of the broader Rs 17.573 trillion budget for the upcoming fiscal year presented by Finance Minister Muhammad Aurangzeb in the National Assembly. During the budget speech, the Finance Minister emphasized that this budget was the coalition government’s second, highlighting its achievement in securing a primary surplus of 2.4 percent of GDP. He also noted a significant reduction in inflation, which has dropped to 4.7 percent, a result of timely government policy measures.
in super tax on the corporate sector as another supportive measure.
TARIFF REFORMS FOR EXPORT GROWTH:: Aurangzeb emphasized that tariff rationalization was a core part of the National Tariff Policy, aimed at promoting an export-led economy. “We’ve removed additional customs duties in four lines and reduced them across 2,700 tariff lines directly linked to raw materials for exporters,” he said, noting this was a phased approach with more reforms to follow. Calling it “an East Asia moment” for Pakistan, he asserted that while revenue concerns existed, the direction of policy was to make Pakistan globally competitive.
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US State Dept confirms Trump’s willingness to resolve Kashmir dispute WASHINGTON News Desk
The US Department of State reaffirmed President Donald Trump’s commitment to addressing the Kashmir dispute, noting that his efforts aim to resolve longstanding differences between India and Pakistan. The statement comes after Trump offered to work on the Kashmir issue following his role in brokering a ceasefire between the two nations during their most intense military confrontation in decades. Trump, in a message praising the peace efforts, remarked, “I will work with both of you to see if, after a ‘thousand years,’ a solution can be arrived at concerning Kashmir.” State Department spokesperson Tammy Bruce, during a press briefing, reiterated Trump’s willingness to engage in peace talks, saying, “While I can’t speak to his plans, the world knows his nature.” She highlighted Trump’s ability to bring leaders to the table for talks previously thought impossible, expressing optimism that the Kashmir issue could also see resolution. Bruce also addressed the recent visit of a Pakistani delegation led by Bilawal Bhutto Zardari, which included meetings with US officials, including Under Secretary for Political Affairs Allison Hooker. The discussions centered on the Pak-US bilateral relationship, particularly counterterrorism cooperation. Hooker reaffirmed the US’s support for the ceasefire between India and Pakistan. Additionally, Bruce mentioned that Deputy Secretary Landau had met with an Indian parliamentary delegation, reaffirming strong US support for India in its fight against terrorism. In parallel, Pakistan has launched a broader engagement campaign in the US to present its perspective on the recent tensions with India, aiming to counter New Delhi’s growing lobbying influence. Last week, Trump claimed credit for preventing a war between India and Pakistan, stating, “They don’t give me credit for anything, but nobody else could have stopped it.”