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ARY NEWS

Shoaib Nizami

  • IMF ‘agrees’ to income tax relief for salaried class in budget 2025-26

    IMF ‘agrees’ to income tax relief for salaried class in budget 2025-26

    In a major development during ongoing budget negotiations between Pakistan and the International Monetary Fund (IMF), the Fund has agreed to provide income tax relief to the salaried class, ARY News reported on Tuesday, citing sources.

    According to official sources, the IMF is now willing to reduce income tax rates across all salary slabs.

    Sources revealed that the relief will be granted through amendments to Section 129 of the Income Tax Ordinance, which governs exemptions and concessions.

    One of the major changes under discussion includes raising the annual tax-free income threshold from the current Rs600,000 to Rs1 million.

    This would mean monthly salaries up to Rs83,000 will become tax-exempt — a substantial increase from the current Rs50,000 exemption limit.

    Under the proposed revisions, the income tax rate on a monthly salary of Rs100,000 may be halved from 5% to 2.5%. Similarly, for a salary of Rs183,000, the tax rate may be reduced from 15% to 12.5%.

    Read more: IMF proposes diesel, petrol price hike for cash purchases

    Employees earning Rs267,000 per month could see their tax rate decrease from 25% to 22.5%.

    Moreover, for monthly salaries up to Rs333,000, the proposed rate may be lowered from 30% to 27.5%, while those earning above that amount could face a reduced maximum rate of 32.5%, down from the current 35%.

    In another key development, the IMF has also acknowledged Pakistan’s defence priorities. According to sources close to the negotiations, the Pakistani government maintained that the country could not afford to delay essential defence expenditures.

    The IMF has reportedly agreed to allow necessary increases in the defence budget, marking a crucial concession in Pakistan’s favour as both sides finalize fiscal plans for the upcoming year.

  • IMF ‘asks’ Pakistan to impose carbon levy on petrol, diesel

    IMF ‘asks’ Pakistan to impose carbon levy on petrol, diesel

    ISLAMABAD: Petrol and diesel are likely to get more costlier in the upcoming budget 2025-26 as the International Monetary Fund (IMF) has ‘asked’ Pakistan to slap a carbon levy on the petroleum products, ARY News reported on Monday, citing sources.

    During the ongoing budget negotiations between Pakistan and the International Monetary Fund (IMF), the global lender has strongly pushed for the imposition of a carbon levy on petrol, diesel, and vehicles with internal combustion engines, sources revealed on Tuesday.

    The IMF has proposed that if Pakistan opts not to implement the carbon levy directly on fuels, it must instead allocate an equivalent annual subsidy of Rs25 billion to support the promotion of electric transportation across the country.

    The sources further said that the IMF has recommended that the federal budget introduce a carbon levy on vehicles with engine capacities exceeding 850cc, including both locally manufactured and imported petrol and diesel-powered cars.

    It estimates that this move could generate up to Rs. 25 billion annually, which should be directed toward subsidizing electric motorcycles and rickshaws.

    Read more: Budget 2025-26: Pakistan sets economic growth target at 4.2%

    Additionally, the IMF has reportedly urged the government to eliminate all tax concessions on internal combustion engine vehicles, particularly those above 850cc.

    It has specifically demanded that the sales tax on vehicles exceeding 850cc be increased from the current 12.5% to 18% in the upcoming budget.

    To accelerate the country’s transition to clean mobility, the IMF has called for policy measures to ensure that, over the next five years, 50% of motorcycles and rickshaws in Pakistan are electric, and that electric vehicles (EVs) constitute at least 30% of all vehicles on the road.

  • Budget 2025-26: Pakistan sets economic growth target at 4.2%

    Budget 2025-26: Pakistan sets economic growth target at 4.2%

    ISLAMABAD: The Pakistan government has set economic targets for the upcoming Budget 2025-26 budget, ARY News reported on Monday, citing sources.

    As per details, the government has set Pakistan’s economic growth target at 4.2% for the upcoming fiscal year. As part of broader macroeconomic planning, the inflation rate is proposed to be capped at 7.5%, signalling a cautious yet optimistic approach to fiscal management amid domestic and global economic challenges.

    They further said, the agricultural sector is expected to play a key role in driving growth, with a proposed development target of 4.5% in budget 2025-26 budget. Within this sector, major crops are projected to grow by 6.7%, while cotton output is targeted to expand by 7%.

    Livestock and forestry sectors have been assigned growth targets of 4.2% and 3.5%, respectively, whereas the fisheries sector is expected to grow by 3% in budget 2025-26.

    For the industrial sector, a growth rate of 4.3% is proposed. Within this, large-scale manufacturing is expected to grow by 3.5%, while small-scale industries are projected to see a significant expansion of 8.9%.

    The mining sector is targeted to grow by 3%, construction by 3.8%, and the electricity, gas and water supply sector by 3.5 per cent in budget 2025-26.

    Read more: Budget 2025-26: Major tax relief proposed for property sector

    In the services sector, the overall growth target has been set at 4% for FY2025-26 budget.

    Wholesale and retail trade is expected to increase by 3.9%, while transport and communications are projected to grow by 3.4%.

    The hospitality and food services sector is anticipated to expand by 4.1%, information and communication by 5%, and financial services by 5%.

    The real estate sector’s target has been set at 4.2%, while public administration is expected to grow by 3%. Education and health services are targeted to grow by 4.5% and 4%, respectively, in budget 2025-26.

    On the investment front, the total investment-to-GDP ratio has been proposed at 14.7%, with public investment accounting for 3.2% and private investment at 9.8%. National savings are projected at 14.3% of GDP.

  • IMF ‘raises’ objections to Pakistan’s 2,000mw allocation for crypto mining

    IMF ‘raises’ objections to Pakistan’s 2,000mw allocation for crypto mining

    ISLAMABAD: The International Monetary Fund (IMF) has raised concerns over Pakistan’s plan to allocate 2,000 megawatts (MW) of electricity for cryptocurrency mining, ARY News reported citing sources.

    According to sources, the IMF demanded details on the pricing of cryptocurrency mining power supply.

    During ongoing budget negotiations for the fiscal year 2025-26, the IMF instructed Pakistan to avoid offering subsidized rates for the electricity allocated to crypto mining and artificial intelligence (AI) data centers, emphasizing fiscal discipline, sources added.

    Pakistan’s government is making strenuous efforts to secure relief measures in the budget, but the IMF has objected to most of these proposals, including tax exemptions and leniencies, according to sources.

    The lender is pressing Pakistan to meet pre-agreed economic targets, maintain expenditure limits, and make tough budgetary decisions to ensure fiscal stability.

    Additionally, the IMF has demanded an increase in excise duties on non-essential and luxury items to boost revenue, further intensifying pressure on the government as it navigates these challenging negotiations to secure continued support under the $7 billion Extended Fund Facility.

    Also read: Pakistan announces first govt-backed strategic Bitcoin reserve

    It is worth mentioning here that the government of Pakistan allocated two thousand Megawatts of electricity for Bitcoin Mining and Artificial Intelligence Data Centers.

    According to Finance Division, the ambitious initiative is part of a broader strategy to monetize surplus electricity, create high-tech jobs, attract billions of dollars in Foreign Direct Investment, and generate billions of dollars for the government.

    In a statement, Finance Minister Senator Muhammad Aurangzeb said the strategic allocation marks a pivotal moment in Pakistan’s digital transformation journey, unlocking economic potential by turning excess energy into innovation, investment, and international revenue.

    Highlighting the transformative nature of initiative, CEO of the Pakistan Crypto Council Bilal Bin Saqib said that with proper regulation, transparency, and international collaboration, Pakistan can become a global crypto and AI powerhouse.

    He said this energy-backed digital transformation not only unlocks high-value investment, but enables the government to generate foreign exchange in US Dollar through Bitcoin mining.

    Bilal Bin Saqib said Pakistan can accumulate Bitcoin directly into a national wallet, marking a monumental shift from selling power in Pakistani Rupees to leveraging digital assets for economic stability

  • Pakistan pushes for tax relief to salaried class in IMF budget talks

    Pakistan pushes for tax relief to salaried class in IMF budget talks

    ISLAMABAD: Pakistan is in talks with the International Monetary Fund (IMF) to address concerns over imposing income tax on the salaried class while meeting revenue targets, ARY News reported citing sources.

    According to sources, during virtual budget discussions, the IMF questioned how Pakistan would achieve its tax collection goals if tax relief is provided to salaried individuals.

    The Federal Board of Revenue (FBR) briefed the IMF on measures to meet these targets, but the lender insisted on eliminating all sales tax exemptions and concessions to boost revenue.

    The IMF has proposed imposing an 18% sales tax on solar panel imports and a 1.5% withholding tax on all imported goods, with exemptions limited to raw materials used by industries, according to sources.

    Additionally, the IMF demanded the registration of builders and developers in the real estate sector to bring them into the tax net. Partial agreement was reached on increasing salaries and pensions, but further rounds of negotiations are expected to finalize these discussions.

    Read more: FBR ‘requests’ IMF to reduce tax collection target for FY2025-26

    According to new proposals for salaried class, the income tax ratio will be brought to 2.5 per cent from 5pc for the individuals earning Rs100,000 per month.

    Individuals earning Rs183,000 per month will likely pay income tax upto 12.5 per cent in the new budget proposals.

    The income tax ratio will be brought down to 22.5pc from current 25pc for the salaried individuals slab of Rs267,000.

    The roposals are expected to be discussed in detail with the IMF as part of the ongoing talks for the upcoming budget.

  • IMF to continue budget talks with Pakistan as staff visit concludes

    IMF to continue budget talks with Pakistan as staff visit concludes

    ISLAMABAD: The International Monetary Fund (IMF) said it would continue budget talks with Pakistan as its mission, led by Nathan Porter, has concluded its staff visit to Islamabad.

    The staff visit focused on recent economic developments, program implementation, and the budget strategy for fiscal year (FY) 2026.

    At the end of the visit, Porter said in a statement, “We held constructive discussions with the authorities on their FY2026 budget proposals, as well as the broader economic policy and reform agenda supported by the 2024 Extended Fund Facility (EFF) and the 2025 Resilience and Sustainability Facility (RSF)”.

    He stated that the authorities reaffirmed their commitment to fiscal consolidation while safeguarding social and priority spending, aiming for a primary surplus of 1.6 percent of GDP in FY2026.

    He added that discussions focused on actions to enhance revenue—including by bolstering compliance and expanding the tax base—and prioritize expenditure. “We will continue discussions towards agreeing over the authorities’ FY26 budget over the coming days”, the statement noted.

    The talks also covered ongoing energy sector reforms aimed at improving financial viability and reducing the high-cost structure of Pakistan’s power sector as well as other structural reforms which will help foster sustainable growth and promote a more level playing field for business and investment.

    Pakistani authorities reiterated their commitment to sound macroeconomic policymaking and building financial buffers. Key priorities include maintaining a tight, data-driven monetary policy to anchor inflation within the central bank’s medium-term target of 5–7 percent.

    Additionally, rebuilding foreign exchange reserves, ensuring a functioning FX market, and increasing exchange rate flexibility are seen as critical to enhancing resilience against external shocks.

    The IMF mission expressed appreciation for the hospitality and strong collaboration from both federal and provincial authorities.

    The IMF team will continue its close engagement with Pakistani officials. The next mission associated with the next EFF and RSF reviews is expected in the second half of 2025, the statement added.

  • Pakistan secured $24 billion in external financing in FY 2024-25

    Pakistan secured $24 billion in external financing in FY 2024-25

    ISLAMABAD: Pakistan received $24 billion from external sources during the first ten months of the ongoing FY2024- 25, according to official documents released by the Economic Affairs Division.

    According to the report, the inflows include $14.1 billion comprising funding from the International Monetary Fund (IMF) and the rollover of deposits by friendly countries such as Saudi Arabia, the United Arab Emirates, and China.

    The documents reveal that Pakistan secured over $6 billion in external funds during the ten-month period, including $5.92 billion in loans and $583 million in grants.

    These figures are separate from the $2.1 billion disbursed by the IMF during the same period, which is not counted in the primary disbursement total.

    According to the Economic Affairs Division, Pakistan received $2.97 billion from multilateral financial institutions between July and April, while bilateral lenders, including China and the United States, provided $370 million.

    Read more: Pakistan ‘plans’ $4.9 billion in external financing in FY2025-26

    Pakistan also acquired $760 million in commercial loans and raised $1.61 billion through the Naya Pakistan Certificate initiative.

    The documents further show that over $3 billion was received in the form of budget support, while $2.63 billion was allocated for various development projects.

    The government of Pakistan had set an annual external financing target of $19.39 billion for the current fiscal year, which has already been exceeded due to additional inflows from the IMF and friendly nations.

    Earlier it emerged that the Pakistan government was preparing to secure $4.9 billion in external commercial financing for the upcoming FY2025-26.

    As per details, Pakistan government’s plan includes obtaining $2.64 billion in short-term loans from commercial banks at expected annual rate of 7 to 8 per cent and without stringent conditions or performance targets.

    In addition, $2.27 billion is proposed to be raised through long-term borrowing from commercial banks.

  • FBR ‘requests’ IMF to reduce tax collection target for FY2025-26

    FBR ‘requests’ IMF to reduce tax collection target for FY2025-26

    Prime Minister (PM) Shehbaz Sharif is making efforts to convince the International Monetary Fund (IMF) to allow a reduction in the Federal Board of Revenue’s (FBR) tax target for FY2025-26, ARY News reported on Wednesday, citing sources.

    According to details, the premier has proposed a Rs250 billion cut in FBR’s tax collection target for the next budget. Efforts are underway to persuade the IMF to accept this revision.

    Sources revealed that FBR has formally requested to lower its tax target from Rs14,307 billion to Rs14,057 billion.

    The rationale behind the proposal is to avoid imposing new taxes while mitigating the risk of revenue shortfalls that could arise from an overly ambitious target.

    In a briefing to the IMF, FBR officials explained that due to lower-than-expected economic growth and a declining inflation rate, the current fiscal year may witness a shortfall of around Rs1,170 billion.

    Read more: IMF demands Pakistan to raise Rs430 billion in new taxes

    Therefore, they advised against increasing the next fiscal year’s tax target by more than Rs2,000 billion.

    As part of its revenue generation plan, FBR has also proposed allowing the import of used vehicles up to five years old.

    The move, they argue, could significantly boost customs revenue by levying higher duties on such imports.

    On May 16, official sources reported that the International Monetary Fund (IMF) has urged Pakistan to increase tax revenues by Rs430 billion to set an ambitious Rs14.3 trillion tax collection target for the upcoming 2025–26 federal budget.

    This recommendation was made during the second round of virtual negotiations between the IMF and the government, where detailed discussions centered around revenue targets and fiscal policy.

  • Govt may provide energy-saver fans to needy on easy installments

    Govt may provide energy-saver fans to needy on easy installments

    ISLAMABAD: Pakistan’s federal government is working over a scheme to provide energy saver fans to power consumers on easy installments, sources said on Monday.

    “The scheme is expected to be announced in the upcoming annual budget,” according to sources.

    The prime minister has approved the proposal of energy savers fans easy installment scheme, sources said.

    This plan is meant to save energy and under this scheme power consumers could get energy saving fans with assistance from banks, according to sources.

    “The consumers will repay the fans price in easy installments via electricity bills.”

    Sources said that 5000-megawatt electricity is estimated to be saved by replacing conventional fans with inverter fans.

    Inverter Fans in Pakistan Really Consume Only 30 Watts?

    “The government’s plan to provide energy saver fans without interest has been under the hammer,” sources said.

    The IMF will also be consulted over the fans scheme to be provided on interest free loans on easy installments.

    The scheme is expected to bring the consumers electricity bills down.

    What are AC/DC fans?

    Inverter fans are energy-efficient ceiling fans that use advanced technology to reduce power consumption. They employ a DC (direct current) motor and inverter technology to optimize energy usage, allowing them to operate at lower wattages while maintaining performance. Unlike traditional AC (alternating current) fans, inverter fans can adjust their speed and power consumption according to the ambient temperature and airflow requirements. Inverter fans can indeed save energy compared to traditional fans. By using advanced motor technology and optimizing energy consumption, they can reduce power usage by up to 50-70% or more, depending on the specific model and usage. This translates to lower electricity bills and a reduced carbon footprint.

    Additionally, inverter fans often come with features like adjustable speed, timer, and remote control, making them convenient and user-friendly. The energy-saving benefits of inverter fans make them an attractive option for homeowners and businesses looking to reduce their energy consumption.

    With their advanced technology and eco-friendly design, inverter fans can help mitigate the environmental impact of energy usage while providing a comfortable and cooling experience. However, it’s essential to note that the actual energy savings will depend on various factors, including usage patterns, fan quality, and local electricity costs.

  • Italy launches €4 million climate resilience initiative for Sindh

    Italy launches €4 million climate resilience initiative for Sindh

    ISLAMABAD: An Italian humanitarian organization has launched a €4 million initiative aimed at strengthening the climate resilience of vulnerable communities in Sindh, one of Pakistan’s provinces most affected by climate-related risks.

    According to a press release, the Food and Agriculture Organization of the United Nations (FAO) and Italian NGO CESVI have signed a partnership agreement to officially launch the RAFAA (Resilience & Adaptation by Fostering Anticipatory Action) project in Sindh. The initiative is funded by the Italian Agency for Development Cooperation (AICS).

    The €4 million project seeks to enhance resilience in communities at risk from climate impacts through anticipatory action and sustainable adaptation strategies.

    The signing ceremony took place at the residence of Marilina Armellin, the Ambassador of Italy to Pakistan, and was attended by representatives from FAO, CESVI, the Embassy of Italy, and AICS.

    Spanning 36 months, the RAFAA project will support rural communities in Sindh—one of the provinces most vulnerable to climate shocks such as floods, droughts, and heatwaves—by establishing multi-hazard early warning systems, improving water quality monitoring, and promoting climate-resilient livelihoods.

    The initiative will also explore climate risk insurance and develop anticipatory action protocols at provincial and district levels.

    Marilina Armellin, remarked: “The initiative supports Pakistan’s national priorities for climate adaptation and disaster risk reduction and aligns with Italy’s development cooperation strategy to promote sustainable agriculture and social inclusion.”

    In a joint statement, Florence Rolle, FAO Representative in Pakistan, and Farhan A. Khan, Regional Manager – Asia Region for CESVI, emphasized the urgency of acting ahead of crises.

    The RAFAA project will begin with a three-month inception phase to identify the three target districts in Sindh, using a combination of climate vulnerability data, flood impact assessments, and poverty mapping.

    RAFAA will be implemented in collaboration with technical partners including the Sindh Agriculture Department, Provincial Disaster Management Authority (PDMA), Sindh Irrigation and Drainage Authority (SIDA), Livestock and Irrigation Departments, the Sindh Social Protection Authority, and the Ministry of Climate Change and Environmental Coordination.

    The initiative aligns with national and provincial policy frameworks, directly supporting Pakistan’s National Adaptation Plan (2023) and Sindh’s Climate Change Policy (2022) by enhancing institutional capacity and community readiness to respond to climate-induced disasters.