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Pakistan says import duty revenues up 25% despite tariff cuts, PM pushes for faster tax reforms

Pakistan says import duty revenues up 25% despite tariff cuts, PM pushes for faster tax reforms
Prime Minister of Pakistan, Shehbaz Sharif (center) heading a meeting on tax reforms in Islamabad, Pakistan, on November 15, 2025. (Prime Minister of Pakistan)
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Pakistan says import duty revenues up 25% despite tariff cuts, PM pushes for faster tax reforms

Pakistan says import duty revenues up 25% despite tariff cuts, PM pushes for faster tax reforms
  • Government says tariff reforms did not reduce revenue, with duty-free imports of raw materials rising over 40%
  • Sharif says effective administrative measures must be taken to eliminate weaknesses in the tax collection system

ISLAMABAD: The government on Saturday said revenue collection from import duties and taxes had risen by 25% this year despite tariff reductions, as Prime Minister Shehbaz Sharif chaired a weekly review meeting on tax reforms and directed officials to accelerate modernization of the country’s revenue system.

The Federal Board of Revenue (FBR), Pakistan’s chief tax authority, has been at the center of the government’s reform drive, which includes automation, digital monitoring and the use of artificial intelligence to curb leakages and meet ambitious tax targets.

Officials told the meeting that tariff reforms carried out this year had been supported by improvements in customs processes, while duty-free imports of raw materials and intermediate goods had increased sharply under measures aimed at boosting manufacturing and exports.

“Tariff reforms this year have had no negative impact on revenue collection,” officials said during the briefing, according to a statement released by the Prime Minister’s Office. “Instead, duties and taxes at the import stage have increased by 25%.”

“This rise has come despite only a 3.6% increase in the volume of dutiable goods, disproving the concern that lower tariffs would reduce revenue,” they added.

The briefing maintained that duty-free imports jumped 41.5%, driven mainly by raw materials and intermediate items, a trend described as “a sign of improved productivity at the industrial level.”

The prime minister said the latest economic indicators had validated the government’s reform agenda and reflected “steadily improving” economic activity.

“Our tariff reforms and efforts to modernize and make the FBR transparent are producing concrete results,” he continued.

Officials also told the meeting that the purpose of tariff rationalization and tax system improvements was to lower manufacturing costs, strengthen exports and create a more competitive investment environment.

Sharif also instructed authorities to intensify efforts against tax evasion and plug gaps in major sectors such as tobacco, tiles and other high-revenue industries.

“Effective administrative and institutional steps must be taken to eliminate weaknesses in the tax collection system,” he said.

Last month, the FBR also reported a “significant increase” in income tax return filings, saying 5.9 million returns had been submitted by the end of October, up from five million in the same period last year, a 17.6% rise.

Of these, 3.6 million taxpayers filed returns with tax payments, an 18.6% increase over 2024.


Karachi courts closed for third day as lawyers protest sweeping constitutional overhaul

Karachi courts closed for third day as lawyers protest sweeping constitutional overhaul
Updated 6 sec ago

Karachi courts closed for third day as lawyers protest sweeping constitutional overhaul

Karachi courts closed for third day as lawyers protest sweeping constitutional overhaul
  • Critics warn the 27th Amendment gives the executive unprecedented influence over the judiciary
  • Lawyers on Saturday held a large convention in Sukkur to escalate their province-wide protest

KARACHI: City courts in Pakistan’s Karachi remained closed for a third consecutive day on Saturday as lawyers across the southern Sindh province pressed ahead with protests against a sweeping constitutional overhaul they say hands the executive unprecedented influence over the judiciary.

The unrest began after Parliament approved the 27th Amendment earlier this week with a two-thirds majority, creating a new federal court empowered to interpret the constitution and hear fundamental rights cases, an authority that had previously rested with the Supreme Court.

Tensions escalated on Thursday when Supreme Court Justices Mansoor Ali Shah and Athar Minallah resigned hours after the amendment became law, denouncing the changes as a “grave assault” on the constitution and triggering alarm among jurists, bar associations and opposition parties.

“Our boycott of court proceedings continues for the third consecutive day today,” Muhammad Ghulam Rehman Korai, General Secretary of the Karachi Bar Association, told Arab News over the phone from Sukkur. “We held a successful convention in Sukkur today, which is a clear indication that lawyers view the constitutional amendment as a black law which they believe is aimed at ending the independence of the judiciary.”

Lawyers’ bodies say the reforms allow the government to shape constitutional adjudication through direct influence over the appointment and composition of the newly formed Federal Constitutional Court (FCC). Under the new arrangement, the executive selects the FCC’s chief justice and initial bench, while the Supreme Court becomes primarily an appellate forum.

Korai said the amendment’s provisions on judicial transfers were also “an attempt to attack the independence of the judiciary and bring it under the control of the government.”

“We do not accept these constitutional amendments and will continue our protest against them,” he added.

Legal analysts warn the changes dismantle long-standing institutional guardrails. Lawyer Mian Ali Ashfaq said the 27th Amendment “has gravely compromised the independence of Pakistan’s judiciary by placing judicial appointments, promotions and constitutional interpretation firmly under executive control.”

“Judges chosen solely at the discretion of the executive will shape constitutional interpretation for the entire country,” he said.

Ashfaq also pointed to the restructuring of the Judicial Commission of Pakistan, where he said the judicial members were now in a minority.

This shift, he said, would allow executive representatives to outvote judges on appointments and transfers, creating “a chilling effect” on judicial independence.

“A judge who risks displeasing the executive may find themselves transferred, disciplined, or blocked from promotion,” he said.

Not all legal figures oppose the reforms. Some argue parliament is within its constitutional right to restructure the judiciary.

“The new law has been enacted by Parliament, Pakistan’s constitutional legislative forum, which holds both the right and the prerogative to do so,” Barrister Muhammad Sarfaraz Ali Metlo, President of the Sindh High Court Bar Association, told Arab News.

He said courts had in the past given “incorrect judgments,” citing decisions like the demolition of Karachi’s Nasla Tower, a residential building, and judicial directives for dam construction, which he said verged on the policy realm.

“If the courts conduct their affairs strictly in accordance with the law, there will be no cause for conflict,” he said.

But Ashfaq said that the judicial restructuring had fundamentally altered Pakistan’s constitutional order.

The change in the Supreme Court position from “the guardian of the constitution” to an “appellate body,” he said, had all but reduced it to “a glorified district court” while placing constitutional interpretation in the hands of a new executive-controlled institution.

“The resignations of Justice Mansoor Ali Shah and Justice Athar Minallah symbolize a judiciary forced into submission and a constitutional order pushed to the brink,” he added.