Pakistan has been asked to renegotiate certain terms of the International Monetary Fund’s Extended Fund Facility to prevent the potential closure or phasing out of Export Processing Zones and Special Economic Zones across the country. A subcommittee of the Senate Standing Committee on Finance and Revenue was informed that Pakistan is required to phase out EPZs and SEZs nationwide by 2035 under the IMF conditionality, with the objective of bringing all sectors under a uniform tax regime. The parliamentary panel, however, expressed concern over the possible impact of such a move on industrial activity, exports and investment, and directed the government to engage with the IMF to protect Pakistan’s economic and industrial interests.
The meeting was convened by Senator Talha Mahmood and attended by Dr Afnan Ullah Khan, Bilal Khan and Jam Saifullah Khan. During the session, the Ministry of Industries and Production briefed the subcommittee on matters relating to Export Processing Zones and Special Economic Zones. Following detailed discussions, the convenor recommended that these zones should not be adversely affected by the implementation of IMF-related conditions. The committee called for the matter to be renegotiated with the international lender, stressing that EPZs and SEZs play an important role in supporting industrial development, export activity and investment. The panel warned that phasing out these zones could have consequences for businesses operating under their existing frameworks and could affect the broader export sector.
The subcommittee also examined issues faced by exporters and businesses in carrying out banking transactions. Members discussed the difficulties associated with existing requirements and emphasised the need to explore practical alternatives where possible. Among the options discussed was the use of insurance guarantees in place of bank guarantees or cheques, subject to legal and regulatory permissions. The Federal Board of Revenue assured the committee that it would examine the matter and work towards addressing the concerns raised. The discussion formed part of the committee’s broader focus on reducing difficulties for businesses and improving the overall environment for commercial and industrial activity in Pakistan.
Taxpayer facilitation and the use of technology in the tax system were also discussed during the meeting. The committee recommended the introduction of facial recognition technology to assist taxpayers whose fingerprints have faded or cannot be successfully verified through existing biometric systems. FBR and NADRA were directed to coordinate and urgently address the matter, highlighting the growing role of digital verification tools in improving access to government services. The use of facial recognition could provide an alternative method for taxpayers facing difficulties with fingerprint authentication and help resolve verification issues that can affect the completion of tax-related processes. The committee further directed that a list of FBR officials holding dual nationality and permanent foreign residency should be submitted.
Another important area discussed by the subcommittee was Pakistan’s National Auto Policy, particularly efforts related to electric vehicles and the development of supporting infrastructure. The committee was informed about measures aimed at promoting the production and use of EVs across the country. It was told that viability gap funding is available to support the initial establishment of 3,000 EV charging stations nationwide. The development of a wider charging network is expected to be an important part of efforts to support the adoption of electric vehicles, as access to charging facilities remains a key infrastructure requirement for the growth of the EV market.
The committee also took up concerns relating to early market closures and their impact on businesses, particularly during periods affected by power outages. Members were informed that the prevailing power situation was linked to disruptions in RLNG consignments and subsequent load-management measures intended to keep electricity prices lower. The discussion highlighted the challenges faced by commercial activity when businesses are required to close early while also dealing with interruptions in power supply. The panel considered these issues alongside wider concerns about maintaining conditions that support business operations and economic activity.
The Securities and Exchange Commission of Pakistan also briefed the subcommittee on unauthorised and illegal share transfers, as well as legal disputes arising from forged signatures and other unlawful practices. SECP informed the committee that it has undertaken the digitalisation of the share market and is taking strict action against individuals and companies involved in illegal activities. The move towards greater digitalisation is part of efforts to strengthen processes within the market and address issues connected with unauthorised transactions and fraudulent documentation.
At the conclusion of the discussions, the committee stressed that FBR should strengthen its engagement with the business community and provide maximum facilitation to taxpayers and companies. Improving the ease of doing business was identified as an important priority, alongside resolving banking transaction issues, improving taxpayer verification systems and examining the concerns surrounding EPZs and SEZs. The Senate subcommittee’s direction to renegotiate the relevant IMF terms now places attention on how the government will seek to balance its commitments under the Extended Fund Facility with the need to protect industrial zones, exporters and investment activity in Pakistan.
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