Senate panel urges Pakistan to renegotiate IMF terms over economic zones

Pakistan’s Senate finance subcommittee has told the government to renegotiate an IMF condition that would phase out Export Processing Zones and Special Economic Zones across the country by 2035.

The condition forms part of the IMF’s Extended Fund Facility and aims to bring all sectors under a uniform tax regime. But lawmakers warned that ending the zones could hurt Pakistan’s industrial and investment interests, as well as exports. The committee recommended that the zones should not be adversely affected.

Talha Mahmood chaired the meeting, attended by Dr Afnan Ullah Khan, Bilal Khan and Jam Saifullah Khan. The Ministry of Industries and Production briefed lawmakers on problems involving the two types of economic zones.

The subcommittee also examined banking difficulties faced by exporters and businesses. It called for practical alternatives, including insurance guarantees instead of bank guarantees or cheques where permitted. The Federal Board of Revenue said it would examine the issue and seek a resolution.

Lawmakers recommended facial recognition technology for taxpayers whose fingerprints have faded or cannot be verified. They directed the FBR and the National Database and Registration Authority to coordinate urgently, and asked for a list of FBR officials with dual nationality or permanent foreign residency.

The committee received a briefing on Pakistan’s National Auto Policy and measures to promote electric vehicles. It was told that viability-gap funding could support the initial establishment of 3,000 charging stations nationwide. Members also discussed business closures linked to early market shutdowns and power outages. Officials attributed the current power situation to disruptions in liquefied regasified natural gas consignments and load management intended to keep electricity prices lower.

The Securities and Exchange Commission of Pakistan described illegal share transfers and disputes arising from forged signatures and other unlawful practices. The regulator said it was digitalising the share market and taking strict action against people and companies involved in illegal activity. The committee urged the FBR to improve engagement with businesses and make it easier to operate in Pakistan.