IMF SAYS PAKISTAN’S IMPORT DUTIES ARE TOO HIGH — BIG CHANGES MAY COME
The IMF has raised serious concerns about Pakistan’s trade system, stating that import duties are not only high but also complicated due to multiple layers such as additional customs duties and regulatory duties. Even though basic customs duty rates were reduced in the past, these extra charges increased the overall cost of imports. This situation makes local industries less competitive and discourages exports. Under the National Tariff Policy 2025–30, the government plans to gradually reduce duties, remove extra charges, and simplify the structure. Businesses involved in imports should prepare for changes in pricing, cost structures, and long-term planning.
FBR TIGHTENS ACTION AGAINST TAX EVASION IN THE MEDICAL SECTOR
FBR has disclosed that a large number of doctors registered with the tax department either did not file income tax returns or reported very low income, despite earning substantial amounts in private practice. The data shows clear gaps between actual earnings and reported income. This indicates that FBR is now focusing on high-income professions and using data, bank records, and sector analysis to detect underreporting. Similar action may expand to other professions, making proper filing and documentation more important than ever.
FTO DIRECTS CUSTOMS TO UNBLOCK WEBOC ID AND NTN OF IMPORTER
In a notable relief for taxpayers, the Federal Tax Ombudsman directed Customs authorities to unblock an importer’s WeBOC ID and NTN after Customs failed to implement its own adjudication order. Despite the importer paying duties, taxes, and penalties, the system remained blocked. This case highlights that taxpayers are protected against unfair administrative actions and that legal remedies like approaching the FTO can be effective when departments delay or misuse enforcement powers.
CUSTOMS STEPS UP AIRPORT CHECKS — GOLD AND SILVER SEIZED
Pakistan Customs has reported significant seizures of gold and silver at international airports, showing a sharp increase in enforcement activity. Rising prices of precious metals have encouraged smuggling, leading Customs to intensify inspections. This serves as a warning that authorities are closely monitoring cross-border movement of valuables. Traders and travelers must ensure proper declaration, approvals, and compliance to avoid confiscation, fines, and legal proceedings.
PAKISTAN AND UZBEKISTAN PLAN TO EXPAND TRADE AGREEMENT
Pakistan and Uzbekistan are working towards expanding their Preferential Trade Agreement (PTA) with the goal of increasing bilateral trade to USD 2 billion. The plan includes adding more products to the concession list and introducing electronic data sharing between customs authorities. For exporters and importers, this could mean lower duties, faster clearance, and better trade opportunities, but only if documentation, tariff classification, and compliance are properly managed.
FBR FACES RS 560 BILLION REVENUE SHORTFALL AMID IMF PRESSURE
The Federal Board of Revenue has formally cautioned the Prime Minister that it may miss its revised half-year revenue target by approximately Rs 560 billion. This shortfall is not merely a statistical concern; it directly threatens Pakistan’s fiscal commitments under the IMF program. The FBR has indicated that a significant portion of expected recovery hinges on pending court cases, requiring support from the Attorney General’s office. Failure to secure favorable outcomes could widen the gap further, potentially triggering emergency fiscal measures, including a mini-budget. For taxpayers, this environment typically translates into intensified audits, faster recoveries, and stricter enforcement across sectors.
PAKISTAN SHARES BACKUP TAX PLAN WITH IMF TO AVOID MINI-BUDGET
In response to emerging revenue pressures, Pakistan has proactively shared a contingency taxation and expenditure plan with the IMF. The plan outlines possible revenue-enhancing measures such as increased excise duties, withdrawal of concessions on selected goods, and expansion of the sales tax base to items currently taxed at reduced or zero rates. Alongside taxation measures, the government has committed to curtailing non-essential expenditures to protect the agreed primary surplus. This signals that while a mini-budget may be avoided for now, the policy space for relief is narrowing, and businesses should prepare for mid-year fiscal adjustments.
GOVERNMENT INTENSIFIES TOBACCO SECTOR ENFORCEMENT TO PLUG REVENUE LEAKAGES
The tobacco sector has once again come under sharp focus as the FBR intensifies enforcement against illegal cigarette manufacturing and tax evasion. Dedicated focal persons have been appointed, and coordination with provincial Excise and Taxation departments has been strengthened. Recent seizures of illicit cigarettes underscore the government’s resolve to clamp down on sectors with historically high leakage. This enforcement drive is part of a broader strategy to expand the tax base and demonstrate compliance discipline to the IMF, with similar sector-specific actions expected in other high-risk industries.
FBR TIGHTENS ACTIVE TAXPAYER RULES FOR AJK AND GILGIT-BALTISTAN RESIDENTS
Through proposed amendments to the Income Tax Rules, 2002, the FBR has introduced a more rigorous framework for determining the Active Taxpayer status of individuals belonging to Azad Jammu & Kashmir and Gilgit-Baltistan. The revised mechanism introduces dual verification, first by the Commissioner Inland Revenue in Pakistan and then by the relevant regional tax authority, to ensure that such individuals do not have taxable business or employment activities within Pakistan. This move aims to curb misuse of the Active Taxpayer List while enhancing transparency and inter-jurisdictional coordination. Individuals with dual addresses or cross-border economic presence should carefully reassess their compliance position.
POS REGISTRATION DISPUTE DEFUSED AS FBR ENGAGES TRADER COMMUNITY
A major protest by traders in Islamabad and Rawalpindi over mandatory POS integration was averted following direct engagement by senior FBR officials. Traders raised concerns about the financial and operational burden of POS systems, particularly for small and uneducated shopkeepers. The FBR’s willingness to engage in dialogue reflects a softer enforcement tone in certain segments, but it does not dilute the broader policy objective of documentation and digital reporting. Businesses operating retail outlets should view this development as a temporary reprieve rather than a rollback of POS compliance requirements.
IMF-DRIVEN PUSH TOWARD HIGHER TAX-TO-GDP RATIO SIGNALS SUSTAINED ENFORCEMENT
Pakistan has reiterated its long-term commitment to increasing the tax-to-GDP ratio to 15% under IMF-supported structural reforms. This target underpins current policy decisions, including aggressive enforcement actions, digitization initiatives, and the narrowing of tax exemptions. For taxpayers, this confirms that the present compliance environment is not cyclical but structural, marking a shift toward broader documentation, reduced tolerance for non-compliance, and increased reliance on data-driven enforcement tools such as IRIS and AI-based risk profiling.
RECORD 35,716 COMPLAINTS FILED AGAINST FBR IN 2025 – A SHARP RISE IN TAXPAYER GRIEVANCES
The Federal Tax Ombudsman (FTO) reported an unprecedented 35,716 complaints against FBR during January–December 2025, reflecting both rising taxpayer frustration and growing awareness of the FTO’s effectiveness. Complaints have risen exponentially compared to previous years, from just 2,867 in 2021 to over 35,000 in 2025. This surge highlights deeper systemic issues within FBR but also demonstrates increasing public trust in the FTO as an accessible forum for quick dispute resolution.
PRA INITIATES IMMEDIATE CRACKDOWN ON NON-FILERS AND UNDER-REPORTING BUSINESSES
The Punjab Revenue Authority (PRA) has approved strict enforcement measures to identify non-filers and businesses misreporting their taxable turnover. In its 130th meeting, PRA leadership emphasized increasing compliance through rapid enforcement actions, real-time monitoring, and sector-focused reviews. This marks a shift toward a more aggressive compliance culture in Punjab, aiming to reduce revenue leakages and enhance fairness in the tax system.
CUSTOMS TIGHTENS SCRUTINY AFTER DETECTING UNDER-INVOICING TRENDS IN AROMA CHEMICAL IMPORTS
Import data analysis revealed substantial variations in declared vs. assessed values for several aroma chemicals. In response, customs authorities initiated proceedings under Section 25A of the Customs Act, 1969 to determine accurate valuation. Importers must now ensure precise declarations, including correct CAS numbers and chemical specifications, to avoid penalties. This development will significantly impact manufacturers and traders dealing in fragrance-related raw materials.
FBR SUSPENDS CUSTOMS INSPECTOR FOR CORRUPTION, MISCONDUCT, AND HARASSMENT AT ISLAMABAD AIRPORT
FBR has suspended a customs inspector after a complaint detailed harassment, extortion, and misuse of authority at Islamabad International Airport. Following an inquiry, the Chief Collector recommended immediate suspension and initiation of disciplinary proceedings under the Government Servants (Efficiency & Discipline) Rules, 2020. The action reflects FBR’s increased focus on internal accountability and its efforts to rebuild public trust in customs operations.
NA COMMITTEE ASKS FBR TO REDUCE EXCESSIVE MOBILE PHONE TAXES
The National Assembly’s Finance Committee has publicly called for a rationalisation of taxes on imported smartphones, stating that current duties make even mid-tier phones unaffordable for most citizens. Members highlighted unrealistic valuation practices, such as overstated customs values for older iPhone models, leading to inflated tax burdens. FBR has agreed to revisit valuations and collaborate with the Tax Policy Office. With local assembly now covering almost 94% of smartphone demand, this review may lead to a more balanced tax regime encouraging affordability without undermining domestic manufacturing.
LHC RESTRICTS FBR FROM REOPENING INCOME TAX ASSESSMENTS WITHOUT DEFINITE INFORMATION
The Lahore High Court has reinforced that tax assessments cannot be amended merely because figures in sales tax returns appear higher or different from income tax returns. The Court held that such mismatches do not amount to “definite information,” which is a strict legal prerequisite for invoking amendment powers. The judgment emphasises that officers must evaluate documentary evidence and factual explanations rather than relying on numerical comparisons. This protects taxpayers from arbitrary reassessments, strengthens audit fairness, and curbs misuse of powers by field formations.
FBR NOTIFIES MAJOR INCREASE IN ISLAMABAD PROPERTY VALUATIONS—HIGHER TAXES EXPECTED
FBR has issued revised and significantly higher property valuation tables for Islamabad, aligning declared property values more closely with real market prices. These apply to open plots, built-up areas, apartments, and commercial spaces. The increase directly affects capital gains tax, advance tax on property transfers, and tax on superstructures, which will now be calculated at Rs. 4,000 or Rs. 3,000 per square foot depending on the age of the structure. Investors, builders, and buyers must reassess transaction costs and tax exposure as these changes come into effect from 8 December 2025, with further revisions expected in other cities.
ECC TIGHTENS VEHICLE IMPORT RULES UNDER TRANSFER OF RESIDENCE & GIFT SCHEMES
The ECC has revamped Pakistan’s personal vehicle import framework by limiting eligibility to only two schemes, Transfer of Residence and Gift. It has also extended the permissible time gap for imports from two to three years, enforced mandatory commercial-safety standards, and imposed a one-year lock-in period during which imported vehicles cannot be transferred. These steps are aimed at discouraging misuse of baggage-based imports while still facilitating overseas Pakistanis. Anyone planning to import a vehicle must now closely review compliance requirements and cost implications under the revised rules.
GOVERNMENT REVISES PROFIT MARGINS OF OIL MARKETING COMPANIES BASED ON CPI
The ECC has approved adjustments to the margins of Oil Marketing Companies (OMCs) on petrol and diesel, linking the revised amounts with national inflation indicators for two fiscal years. Half of the revision is being implemented immediately, while the remaining portion depends on progress in digitalisation and transparency of the petroleum supply chain. This measure is part of a broader effort to stabilise the fuel market and improve pricing transparency, which ultimately impacts consumers and energy-sector businesses.
MAJOR INTERCEPTION OF CONCEALED PYROTECHNICS INSIDE ELECTRONIC SPEAKER BOXES
Customs authorities in Faisalabad have seized thousands of kilograms of concealed fireworks and pyrotechnic materials that were illegally hidden inside speaker boxes to evade detection. These items are prohibited under Appendix A and B of the Import Policy Order. The discovery highlights sophisticated concealment techniques used by smugglers, such as embedding dangerous goods inside unrelated consumer products, and reinforces Pakistan Customs’ intensified enforcement strategy to prevent the entry of hazardous materials into the country.
KARACHI CUSTOMS EXPOSES RS. 167 MILLION DUTY EVASION THROUGH MISDECLARED AUTO PARTS
A high-value customs fraud case has been uncovered in Karachi involving deliberate under-declaration of imported auto parts, concealment of high-value items such as 24,000 universal joints, and undeclared laptops. The importer allegedly attempted to classify expensive engine parts under low-duty tariff codes. Physical examination revealed goods far exceeding declared quantities, with duty evasion calculated at over Rs. 167 million. FIRs have been registered, and multiple individuals, including clearing agents, are under investigation. This case illustrates increased inter-agency coordination and the tightening of enforcement against revenue leakages.
CUSTOMS COMMITTEE CLARIFIES THAT AEROSOL SPRAY VALVES FALL UNDER PCT 8424
The Customs Classification Committee has issued a definitive ruling that aerosol spray valves should be classified under PCT 8424, which covers mechanical spraying devices, rather than 9616, which applies to finished toilet sprays. The decision was based on World Customs Organization (WCO) guidelines, technical specifications, and explanatory notes confirming that these valves function as core mechanical components rather than consumer spray heads. The ruling provides long-needed uniformity across customs assessments and reduces classification disputes for importers and manufacturers.
SHC UPHOLDS CUSTOMS’ POWER TO CONFISCATE VEHICLES USED IN SMUGGLING
The Sindh High Court has allowed a Special Customs Reference Application, applying recent Supreme Court precedent confirming that any vehicle used for smuggling—even if modified with hidden compartments—can be confiscated. The ruling strengthens the legal position of Customs authorities in cases involving concealed transport of contraband, discouraging organized smuggling networks and supporting stricter border and inland enforcement.
BILAWAL ADVOCATES A COOPERATIVE, DECENTRALIZED TAX FRAMEWORK FOR ECONOMIC GROWTH
Bilawal Bhutto, addressing the business community, emphasized replacing coercive tax enforcement with collaboration, trust, and provincial empowerment. He urged a model where provinces have representation within FBR and even proposed shifting federal tax collection of sales tax on goods to provinces, similar to how sales tax on services increased after devolution. His remarks highlight an emerging national debate on redesigning Pakistan’s tax system to improve compliance, broaden the tax net, and strengthen public–private partnerships across districts and economic zones.
IHC RESTORES SPECIAL BENCH TO SPEED UP TAX CASE HEARINGS
The Islamabad High Court has completed its special division bench dedicated to tax matters by adding Justice Saman Riffat Imtiaz, allowing long-pending tax cases to move forward again. Earlier, hearings were getting delayed because one of the judges was on medical leave, creating uncertainty for businesses and taxpayers. With the bench now functional, litigation timelines should improve and taxpayers can expect more consistent judicial attention to their tax disputes.
WHO PUSHES PAKISTAN TO INCREASE TAXES ON CIGARETTES AND SUGARY DRINKS
The World Health Organisation has urged FBR to further increase taxes on cigarettes and beverages and move to a single-tier excise system for tobacco. Despite previous tax hikes, overall tobacco consumption has not fallen; instead, many smokers have shifted from tax-paid brands to cheaper illicit brands, causing major revenue losses. WHO is promoting its “3 by 35 Initiative,” which seeks to raise real prices of tobacco, alcohol and sugary drinks by at least 50% by 2035 through taxation, while Pakistan simultaneously struggles with enforcement gaps and a growing illicit market.
SHC STOPS PAKISTAN COAST GUARDS FROM AUCTIONING IMPORTED GOODSVEHICLES
The Sindh High Court has restrained Pakistan Coast Guards from auctioning a consignment of milk powder imported from Iran, which was seized on suspicion of smuggling. The importer presented proper Goods Declaration documents to show that the goods were duly cleared, yet the authorities were still moving toward auction without prior notice. The court has issued notices to the respondents and halted the auction process until the next hearing date, reinforcing that lawful imports cannot be disposed of without due process.
CUSTOMS FIXES NEW VALUATION BENCHMARKS FOR 11 MEDICAL DEVICES IMPORTED FROM CHINA
The Directorate General of Customs Valuation, Karachi, has issued a new valuation ruling for 11 medical products imported from China, including alcohol swabs, oxygen masks, spinal needles, ECG electrodes and spirometers. The earlier valuation ruling was challenged and partly rescinded, prompting Customs to undertake a fresh exercise using the statutory valuation methods under Section 25 of the Customs Act, 1969. After consulting stakeholders and reviewing limited comparable data, Customs re-determined values using flexible methods allowed under sub-section (9), ensuring more realistic assessment bases while excluding well-known international brands from the new rates.
TELECOM COMPANIES SENT TAX RETURN SMS WITHOUT FBR APPROVAL, PTA CONFIRMS
FBR has clarified that recent SMS reminders sent to taxpayers asking them to file returns for tax year 2025 were not authorized by the Board. The messages were transmitted by telecom operators due to a technical glitch and referred to a filing deadline that had already passed, causing confusion among recipients. FBR has taken up the matter with PTA and telecom companies to prevent such errors going forward, and has reassured taxpayers that official reminders will be timely, accurate and properly coordinated.
GOVT MOVES TO RESTRICT CHLOROFORM IMPORTS OVER HEALTH & ENVIRONMENTAL RISKS
The government is moving toward restricting imports of chloroform, widely used as an adhesive in the footwear industry and flagged as a serious health and environmental risk. Industry associations requested action, and after cross-ministry consultations it was agreed that a blanket ban would disrupt essential pharmaceutical testing where chloroform is used as a laboratory reagent. The proposed policy therefore limits chloroform imports under the relevant PCT code to pharmaceutical users only, subject to a prior NOC from DRAP, striking a balance between safety and critical industrial needs.
TRADERS’ ASSOCIATIONS TO PROTEST FBR’S ‘FORCED POS REGISTRATION’ DRIVE
Trader bodies in Islamabad have convened a meeting to decide their response to what they describe as “forced” POS registration of small shops by FBR. Options on the table include shutter-down strikes and protests outside FBR headquarters, with leaders claiming that raids and coercive actions are creating fear instead of encouraging documentation. The Rawalpindi Chamber of Commerce has also condemned recent enforcement raids, urging the tax authorities to replace harassment-style actions with transparent, notice-based procedures that build trust and broaden the tax net sustainably.
EU EXPECTED TO DELAY MAJOR CARBON BORDER AND AUTO INDUSTRY POLICY CHANGES
The European Commission is planning to delay legal proposals to expand its carbon border tariff to more downstream products and to revisit the 2035 ban on new CO₂-emitting cars. Carmakers and some member states are lobbying for more flexibility, such as allowing plug-in hybrids and combustion engines running on synthetic “CO₂-neutral” fuels beyond 2035. Any softening of these rules would help an auto industry grappling with slower EV demand and competition from China, but could also weaken the EU’s path to net-zero emissions by 2050.
FBR ISSUES CLARIFICATION AFTER ERRONEOUS TAX FILING SMS CONFUSES TAXPAYERS
Reiterating its position, FBR has explained that all official SMS reminders for return filing were sent before the statutory deadline in September. The more recent messages that some taxpayers received were unintended repeats generated by telecom operators, not fresh instructions from FBR. The Board has asked PTA and the operators to fix the underlying technical issue and has assured taxpayers that it remains committed to clear, correct and timely communication regarding tax compliance.
FBR’S LEGAL AUTHORITY TO ACCESS BANK DATA ENDORSED
The Law Minister has reiterated that FBR is fully empowered under section 165A of the Income Tax Ordinance, 2001 to obtain bank account details, including balances and deposits, to verify whether taxpayers’ declared income aligns with their actual financial activity. This data-sharing is mandatory for banks and aligns with global anti–money laundering standards. The Minister emphasized that such SMS alerts go only to the concerned taxpayer, not to the public. Due to the sensitivity around privacy and data protection, the Senate has forwarded the matter to its standing committee for further review.
FBR EXPANDS POS INTEGRATION TO 10,858 TIER-I RETAILERS
FBR has now integrated 10,858 major retailers into its Point-of-Sale (POS) system, including restaurants, textile outlets, leather stores, and large hotel/restaurant chains. This marks steady growth from September 2025 and reflects continued efforts to document real-time sales data. The POS system directly links retailers’ invoices with FBR, helping prevent under-reporting and strengthening overall sales tax compliance. This expansion signals a stronger push toward documentation in high-volume retail sectors.
SUPREME COURT BLOCKS USE OF REDEMPTION FINE FOR NON-IMPORTABLE VEHICLES
The Supreme Court has overturned earlier decisions that allowed the release of confiscated vehicles older than the permitted age limits, on payment of a 35% redemption fine. The Court clarified that under Appendix-E of the Import Policy Order 2022, vehicles exceeding the three- or five-year age cap are strictly non-importable, and no fine can be used to “regularize” such imports. Conditions in Appendix-E must be read alongside SRO 499, which does not permit an option to pay fine in lieu of confiscation for such violations. The decision reinforces strict compliance for anyone importing vehicles under baggage, gift, or residence schemes.
CUSTOMS VALUES OF IMPORTED SILICON REDUCED BY UP TO 32%
FBR’s Directorate General of Customs Valuation has revised downward the customs values of silicon in primary form, covering both emulsion and fluid/oil grades, by 28% to 32%. Issued through Valuation Ruling 2028/2025, the updated values reflect current market realities based on 90-day import data and stakeholder consultations. These revised figures now serve as minimum benchmark values for duty calculation under Section 25 of the Customs Act, 1969, giving importers greater predictability while ensuring transparency and preventing under-invoicing.
FBR’S PETROLEUM LEVY COLLECTION JUMPS NEARLY 80% AMID CRACKDOWN ON SMUGGLED FUEL
The Federal Board of Revenue has reported an almost 80% surge in petroleum levy collection for July–November, reflecting stronger oversight of fuel movement and enforcement against illegal fuel outlets. This significant rise, amounting to roughly Rs 170 billion, has been driven by improved sales of petrol and diesel, supported by enhanced refinery output and stricter border checks to curb smuggling. The results show how targeted enforcement strengthens government revenues, restores competitiveness for compliant fuel marketers, and reduces leakage from illicit trade channels.
FTO ORDERS AIRLINES TO SUBMIT MANIFESTS DIRECTLY TO CUSTOMS TO ELIMINATE CARGO FRAUD
The Federal Tax Ombudsman has directed international airlines to file cargo manifests directly in Customs’ WeBOC system, bypassing intermediaries. This decision follows investigations revealing risks of fraudulent cargo clearances facilitated through manipulated or incomplete data. By requiring direct electronic integration and independent validation of manifests, the FTO aims to tighten controls at airports, designated as sensitive security zones, while preventing pilferage, unauthorized clearances, and revenue losses. This reform enhances cargo transparency and strengthens national supply chain security.
SUPREME COURT RULES OVER-AGED IMPORTED VEHICLES MUST REMAIN CONFISCATED—NO LEGAL BASIS FOR RELEASE
The Supreme Court has issued a landmark ruling confirming that vehicles imported in violation of the Import Policy Order’s age limits cannot be released, even upon payment of fines. The court emphasized that the age restriction is an essential legal condition for import, not merely a procedural requirement. Earlier decisions allowing release against a redemption fine were overturned, as the law does not provide any mechanism to regularize an illegal import. This ruling sets a strict compliance precedent for importers and clearing agents, reinforcing that violations of the Import Policy result in permanent confiscation.
CUSTOMS ENHANCES EFFICIENCY AT DRY PORTS WITH ONE-DAY CHECKING PROCEDURES AND ANTI-BRIBERY CONTROLS
Customs authorities have expanded examination staff and installed sophisticated scanning technology at dry ports, enabling all examination procedures to be completed within a single day. These reforms aim to eliminate processing delays and reduce opportunities for bribery or informal influence in the assessment process. Business associations welcomed the move, noting that faster clearance times and improved transparency help importers avoid financial loss, strengthen trust in Customs operations, and support smoother cross-border trade.
BUSINESS COMMUNITY PRAISES FACELESS ASSESSMENT SYSTEM FOR TRANSPARENCY AND FAIR VALUATION
The faceless assessment model—designed to reduce personal interaction and curb valuation manipulation, has gained strong approval from trade bodies. Enhanced staff capacity, better scanning systems, and standardized assessment procedures have collectively blocked avenues for bribery and discretionary valuation practices. Officials and industry leaders noted that previous concerns about inconsistent assessments have largely been resolved, resulting in a more predictable, transparent environment for importers. Discussions also highlighted the need to update valuation practices such as excluding packing weight in line with Section 25 of the Customs Act.
CUSTOMS ISSUES REVISED VALUATION FOR POLYESTER POY IMPORTS TO REFLECT GLOBAL PRICE TRENDS
The Directorate General of Customs Valuation has introduced new customs values for Polyester Partially Oriented Yarn (POY) imported from China. This update follows industry requests to align valuations with international market prices. After reviewing 90 days of import data, consulting international pricing publications, and engaging stakeholders, Customs determined fresh values under Section 25A to ensure objective, market-reflective assessments. The updated valuation framework enhances transparency, reduces classification disputes, and helps textile businesses plan procurement more effectively.
WAR INSURANCE COSTS SPIKE FOR SHIPS ENTERING BLACK SEA AS CONFLICT RISKS INTENSIFY
War-risk premiums for vessels operating in the Black Sea region have risen sharply amid escalating tensions linked to the Ukraine conflict. Insurance terms, previously reviewed every 48 hours, are now being reassessed daily due to increased attacks on ships and heightened geopolitical uncertainty. Major exporters of grain, oil, and refined products rely on this corridor, meaning rising insurance costs directly impact freight prices and global supply chains. Statements by regional leaders, including threats of restricting sea access, have further contributed to volatility in maritime risk assessment.
NA COMMITTEE CALLS FOR MAJOR REVISIONS IN INCOME TAX (THIRD AMENDMENT) BILL 2025
The National Assembly’s Standing Committee on Finance has raised strong objections to several provisions of the Income Tax Ordinance (Third Amendment) Bill 2025, noting that some clauses give excessive administrative discretion and may compromise impartiality in tax administration. The Committee has directed the Ministry of Law to prepare alternative options to ensure fairness, transparency, and stronger parliamentary oversight. This review forms part of Pakistan’s commitment to improved fiscal governance under IMF benchmarks, with further deliberations scheduled for 9 December 2025.
PRA ANNOUNCES CRACKDOWN ON UNREGISTERED BUSINESSES ACROSS PUNJAB
The Punjab Revenue Authority has issued a strong enforcement warning to businesses operating without proper tax registration. PRA noted that several high-earning establishments, including marriage halls and event companies, are still unregistered, causing significant revenue leakage. The Authority aims to complete registrations within the month and has directed its teams to identify cases involving sales understatement and non-deposit of collected sales tax. PRA will also intensify digital monitoring through the e-IMS system and consumer verification via the Sahulat App, signalling a shift toward stricter compliance and digital transparency.
CUSTOMS PREVENTS RS 167 MILLION TAX EVASION THROUGH MIS-DECLARATION BUST
Karachi Customs Enforcement successfully intercepted a tax-evasion attempt involving mis-declared auto parts, refurbished laptops, and industrial bearings imported from Jebel Ali. Upon re-examination, authorities discovered concealed Japanese-origin goods valued at Rs 193 million, confirming an evasion attempt of approximately Rs 167 million. The swift action underscores Customs’ increased reliance on intelligence-based operations and highlights the growing focus on combating revenue loss caused by mis-declaration and fraudulent import practices. Legal proceedings have been initiated against all parties involved.
PM ORDERS STRICT CUSTOMS-DUTY MONITORING TO CURB BORDER-TRADE LEAKAGES
Prime Minister Shehbaz Sharif has instructed customs authorities to enforce tighter oversight on duty collection relating to bilateral and transit trade across Pakistan’s borders. He highlighted that outdated customs systems and weak enforcement mechanisms have enabled corruption, smuggling, and billions in annual revenue losses. The Prime Minister emphasized that modernizing customs operations is essential to reduce industrial costs, support local manufacturing, and restore Pakistan’s competitiveness in global markets. The meeting reinforced the need for digital reforms, data-driven decision-making, and stronger governance across border-trade channels.
GOVERNMENT PUSHES FOR EVIDENCE-BASED CUSTOMS & TRADE REFORMS
A government sub-working group has presented a detailed assessment of Pakistan’s existing customs and trade frameworks, highlighting longstanding bottlenecks that undermine industrial productivity and export growth. The report underscored that customs reforms alone are insufficient, a broader improvement in infrastructure, transparency, and investment is required. The government acknowledged the underutilization of the Export Development Fund and stressed the importance of channeling resources into research, workforce training, and sectoral capacity-building. These reforms aim to build a resilient, export-driven economy supported by predictable and efficient trade processes.
FBR RESTRUCTURES LEADERSHIP—ZUBAIR BILAL APPOINTED MEMBER IR-OPERATIONS
Following the unfortunate injury of the incumbent Member Strategic Transformation during an official visit abroad, the FBR has assigned Zubair Bilal (BS-21) the additional charge of Member Inland Revenue (Operations). This leadership change comes at a crucial time when FBR is implementing a comprehensive transformation plan that requires coordinated handling of operations, audit, policy, and strategic functions. The notification strengthens internal alignment and ensures continuity in nationwide Inland Revenue operations during the transition period.
TRANSFER & POSTING ORDERS ISSUED FOR SENIOR INLAND REVENUE OFFICIALS
The Federal Board of Revenue has issued immediate transfer and posting orders for several senior Inland Revenue officers across Grades 19 to 21. These changes affect key roles in the Large Taxpayers Office Karachi and other important operational zones. Officers receiving performance allowances will continue to receive them in new roles, ensuring continuity in ongoing work. The officers have been instructed to promptly submit charge-assumption reports, reflecting FBR’s focus on administrative discipline and uninterrupted functioning of tax operations.
GOVERNMENT EYES RS 975 BILLION TAX RELIEF PACKAGE PENDING IMF APPROVAL
The government is considering a massive Rs975 billion tax relief package that mainly targets the corporate sector and the salaried class. Key proposals include a 25% reduction in tax burden for salaried individuals, abolition of super tax, reduction of minimum tax, removal of surcharges, and withdrawal of wealth-type taxes such as capital value tax on foreign assets. However, because Pakistan is under an IMF programme, the government can only implement those relief measures that receive IMF approval, so the package is currently in a “proposed but not final” stage. For businesses and employees, this signals that policymakers are actively looking to shift away from “punitive” taxation toward growth-oriented policies, subject to lender consent.
PRIVATE SECTOR–LED TAX OVERHAUL PANEL FORMED TO RESHAPE PAKISTAN’S TAX SYSTEM
To turn these tax relief ideas into practical reforms, the Prime Minister has formed a powerful committee headed by Finance Minister Muhammad Aurangzeb, with key private-sector representatives on board. This panel will review, prioritize, and convert private sector recommendations into an actionable roadmap, particularly focusing on rationalizing tax rates, reducing “unreasonable” levies, and improving the ease of doing business. The initiative reflects a new approach where business leaders and experts are directly consulted on how to fix the long-struggling tax system, rather than tax policy being designed in isolation. For investors and companies, this signals a more collaborative tax reform process and a potential shift toward a stable, investment-friendly fiscal framework.
FBR LAUNCHES NATIONWIDE CRACKDOWN ON NON-TAX-PAID CIGARETTES
The FBR has initiated a countrywide enforcement drive against manufacturers and traders dealing in non-tax-paid and non-stamped cigarettes, registering multiple FIRs against several tobacco companies and transporters. Raids have uncovered large quantities of untaxed cigarettes, and in at least one case, FBR teams reportedly faced armed resistance, showing the organized nature of this tax evasion. These actions are meant to protect government revenue, enforce the Track & Trace System, and create a level playing field for compliant cigarette manufacturers who bear the full tax cost. For businesses in the tobacco supply chain, the message is clear: non-compliance with excise duties, FED, and sales tax will now carry serious legal and criminal consequences.
SPECIAL CUSTOMS DUTY ON EXPORT DEVELOPMENT SURCHARGE ABOLISHED
Through S.R.O. 2335(I)/2025, the Federal Board of Revenue has exempted the Special Customs Duty that was being levied as Export Development Surcharge on all export consignments. This means exporters will no longer pay this additional duty at the time of export, translating into a direct reduction in export-related costs. The move is aligned with the government’s stated policy of supporting export-led growth, improving Pakistan’s price competitiveness in international markets, and simplifying the cost structure for exporters. For export-oriented businesses, this is an immediate, quantifiable relief that improves margins and can be factored into pricing and planning.
NEW CUSTOMS VALUES ANNOUNCED FOR UNCOATED OFFSET PAPER IMPORTS
The Directorate General of Customs Valuation, Karachi, has revised customs values for uncoated offset paper used in writing, printing, and photocopying, covering imports from key markets such as China, Thailand, Indonesia, and Japan. Industry stakeholders had argued that the old valuation ruling was over two years old and no longer reflected the significant drop in international paper prices, prompting the fresh review. Customs authorities analysed import data, held consultations, reviewed international bulletins, and then set updated values under Section 25 of the Customs Act, 1969. For importers, printers, publishers, and office suppliers, this update is important because it directly impacts the assessable customs value, duty calculations, and ultimately the local cost of paper-based products.
FBR ISSUES UPDATED CUSTOMS VALUES FOR POLYESTER YARN IMPORTS
The FBR has also notified fresh customs values for polyester partially oriented yarn (POY) through Valuation Ruling No. 2026/2025, largely in response to industry requests to align valuations with fluctuating international yarn prices. The new values, primarily for imports from China, are now set on a per-kilogram basis for different denier ranges, with an additional uplift for dyed yarn and adjustments for air freight versus sea freight. This ensures duty and tax assessments at the import stage are more predictable, transparent, and consistent with actual market conditions. For textile and yarn manufacturers, this change can affect input costs, pricing strategies, and competitiveness in both domestic and export markets.
PRA ANNOUNCES MAJOR ADMINISTRATIVE RESHUFFLE ACROSS KEY POSITIONS
The Punjab Revenue Authority has issued a notification reshuffling several senior officers, including new postings for Commissioners and Additional Commissioners in Multan, Faisalabad, Lahore, and headquarters. Officers have been assigned additional responsibilities such as Commissioner Appeals, Chief Headquarters, and enforcement roles, reflecting a broader administrative reorganization. Such reshuffles typically aim to strengthen enforcement, improve policy implementation, and enhance taxpayer facilitation by placing experienced officers in critical positions. For taxpayers operating in Punjab, especially larger service providers, this may translate into shifts in enforcement style, audit focus, and interaction with PRA’s regional and appellate offices.
