Category: Business

Pakistan’s equity rebound in 2025 was broad, but it was not evenly distributed. The KSE-100 rose a respectable 52%. Banking stocks did far better. And one bank—Bank of Punjab—ran far ahead of both.

With a 333.8% total shareholder return, BOP delivered the strongest performance among Asia-Pacific banks tracked by S&P Global Market Intelligence. That figure dwarfed even the impressive gains posted by peers such as National Bank of Pakistan and Askari Bank, and put Punjab decisively ahead of regional comparators in Japan and Southeast Asia.

Yes, part of the story is recovery from depressed valuations. Elevated interest rates helped margins, and cleaner balance sheets restored confidence. But BOP’s outperformance cannot be explained by macro tailwinds alone.

The bank has leaned aggressively into segments most lenders approach cautiously: agriculture, SMEs, women-led enterprises, and first-time borrowers. At the same time, it scaled digital lending faster than any domestic peer, becoming Pakistan’s largest digital lender and card issuer in the process.

That combination—provincial reach plus digital execution—proved powerful. Investors appeared to reprice BOP not as a turnaround trade, but as a platform bank aligned with financial inclusion and real-economy growth.

Whether the rally holds as rates decline is an open question. But in 2025, Punjab didn’t merely participate in Pakistan’s banking resurgence—it led South Asia.

An increase in electricity shortage, which has reached around 4,000 megawatts, has led to power distribution firms (Discos) enforcing loadshedding across the country. Five districts are impacted by the approximately 1,000MW shortfall that the Lahore Electric Supply Company (LESCO) alone is facing.

Officials said the shortage has been going on since several days as dense fog triggers repeated tripping of power plants in the southern region, while hydel power generation remains minimal during winter months.

An official who asked to remain anonymous told a private media source, “When we compare the situation with the previous year, electricity demand has increased by approximately 2,000MW in winter, mainly due to the extensive use of heating appliances.” 

The official added that reduced gas supply to Lahore-based power plants, along with the closure of a unit at the Sahiwal Coal Power Plant, has further limited generation capacity. This has left Discos with no option but to implement loadshedding in Punjab, Sindh, and other provinces.

The situation has gotten worse over the past four to five days, according to another official, after some power facilities in the southern region went off the grid as a result of tripping brought on by heavy fog. “The Matiari-Lahore High Voltage Direct Current (HVDC) transmission line supplies power to Punjab, particularly Lahore, from these plants,” the official continued, adding that restoration work is still in progress. 

Consumers have complained about load shedding lasting three to six hours a day in urban regions and six to ten hours a day in rural areas. “Forced loadshedding has been continuing for three to five hours daily, while rural areas, especially in interior Sindh, are facing eight to twelve hours each day,” stated a Sukkur resident.

A Lahore-based resident noted, “Forced loadshedding is lasting three to six hours daily. In addition, we are also facing water shortages from the Water and Sanitation Agency (WASA) because tube-wells are not operational, leading to no warm water supply during the cold weather.”

LESCO has continued loadshedding in Lahore and surrounding districts due to a shortfall exceeding 1,100MW in total consumption of over 3,200MW during peak hours. 

Lesco Chief Executive Officer Ramzan Butt explained, “At present, hydel power generation is zero. Consumers previously using solar net-metering systems have returned to Lesco’s supply as their solar equipment is not generating due to dense fog. Several power plants also went off the grid because of tripping caused by fog. This all contributed to the shortfall in our total consumption.”

The government is considering an increase in petroleum levies to manage the over Rs3 trillion circular debt in the gas sector instead of raising the gas tariff set by the Oil & Gas Regulatory Authority (OGRA).

As per the details, Petroleum Minister Ali Pervaiz Malik told the National Assembly’s Standing Committee on Petroleum that gas tariffs would not be increased from January 1 under instructions from Prime Minister (PM) Shehbaz Sharif.

Speaking during a meeting chaired by MNA Syed Mustafa Mahmood, the minister confirmed that the gas circular debt, including late payment surcharges, had crossed Rs3 trillion, however, he declined to comment on proposals to increase the petroleum levy by Rs5 per litre on petrol and diesel to cover the debt.

“A separate briefing could be arranged on the subject,” he said.

Currently, Pakistan has around 10 million gas consumers, while petrol and diesel are used by almost the entire population. The government has been increasing the petroleum levy, now up to Rs82 per litre, citing subsidies for power consumers, road construction in Balochistan and general revenue collection.

OGRA had recommended up to a 7 percent increase in natural gas prices, equal to Rs118 per unit, in late November 2025 to meet the Rs886 billion revenue requirement of gas companies for fiscal year 2025-26. 

Under law, the government must decide on consumer-end gas prices within 40 days of OGRA’s determination.

Malik said gas prices would remain unchanged for six months. He added that reforms to reduce gas theft and losses, and the diversion of surplus Liquefied Natural Gas (LNG) cargoes to international markets, were underway.

He also confirmed that negotiations with Qatar had led to “a mutually acceptable arrangement” to manage excess supplies.

Salaried individuals paid a whopping Rs266 billion in income tax during the first half of the current fiscal year, accounting for nearly one-tenth of the total income tax collected nationwide.

According to provisional figures compiled by the Federal Board of Revenue (FBR) for the July–December period, tax payments from salaried employees in both the public and private sectors were more than twice the amount collected from the real estate sector during the same period.

The data suggested that salaried individuals paid over Rs266 billion in income tax, marking an increase of Rs23 billion, or 9%, as compared to the corresponding period last year when income tax collection from salaried persons, excluding book adjustments, stood at Rs243 billion.

Book adjustments refer to the process of reconciling the profit and loss figures recorded in book income with different rules and regulations for calculating taxable income as per the Income Tax Ordinance of 2001.

Reports quoted sources as saying that once book adjustments are included, income tax contributions from salaried individuals had already crossed Rs300 billion by the end of the first half of the fiscal year.

The figure also does not include payments made by certain contractual employees under Section 153-B of the income tax law.

Despite this, the salaried class still bears a disproportionate tax burden, mostly because of what critics claim is the FBR’s dependence on a taxpayer base that has already been established. Large portions of the economy remain outside the tax net, with manufacturers and salaried persons continuing to be the main contributors. 

The salaried class contributes about 38% of their gross income in taxes, which is far more than the average for the region and much more than contributions from industries like retail and real estate.

Lt Gen Sarfraz Ahmed, the national coordinator of the Special Investment Facilitation Council (SIFC), also acknowledged the imbalance during a speech to the Pakistan Business Council (PBC) last month.

He claimed that the government’s fiscal difficulties had resulted in an excessive reliance on taxes, specifically targeting documented and visible taxpayers.

The data further showed that non-corporate employees contributed the highest share among salaried individuals, paying Rs117 billion in income tax – an increase of 14% from last year. 

Employees in the corporate sector, on the other hand, paid Rs82 billion, reflecting a 13% rise as compared to the same period of the previous fiscal year.

During the first half of the fiscal year, the FBR collected Rs3.03 trillion in income taxes overall. Nearly 10% of this amount came from salaried individuals, who pay taxes on their gross incomes without the ability to adjust expenses.

Despite this contribution, FBR struggled to meet its downward-revised tax target of Rs6.5 trillion.

To bridge the gap, it relied on advance collections and delayed the processing of taxpayers’ refunds. Even then, overall tax collection growth remained below 10%, roughly half the rate required to achieve the annual target.

While provincial government employees paid Rs39 billion in income tax, a 7% decrease from the previous year, according to a breakdown of public-sector contributions, employees of the federal government paid Rs27 billion, registering an increase of 8%.

The government’s recently implemented tax on wealthy pensioners, which is applied to pensions above Rs10 million per year, generated minimal revenue, indicating that full-year revenues might not be able to reach Rs1 billion.

Meanwhile, the government last month once again allowed retired employees to draw more than one pension, a move that undermined its stated objective of pension reforms and expenditure reduction.

Tax revenues from traders remained low. Restrictions on financial transactions by ineligible individuals were among the enforcement measures that were either diluted or rolled back.

However, after higher rates for non-filers and the establishment of a new category for late filers, the real estate sector saw some increase in tax collection. Plot sales saw a two-thirds increase in withholding tax income to Rs87 billion, while plot purchases saw a 29% decline to Rs39 billion.

Overall, withholding tax collections from the real estate sector reached Rs126 billion during the first half of the fiscal year, reflecting a 17% increase.

The federal government has decided to provide relief to electricity consumers by using revenue generated from a captive power levy, introduced under an agreement with the International Monetary Fund (IMF), to reduce electricity rates.

The charge on captive power plants would be used to reduce electricity prices for all consumer categories, according to government sources. The federal cabinet has previously authorized the decision, supporting the direct transfer of the levy’s benefits to electricity consumers. 

Officials said the government has finalised a plan under which the levy collected from captive power plants will not be adjusted on a monthly basis. Instead, electricity rates adjustments will be made at intervals of two months, allowing the accumulated amount to be reflected in consumer bills.

The federal government has enforced a law introducing a phased levy of up to 20 percent on captive power plants operating on gas or liquefied natural gas (LNG). Under the first phase, a levy of five percent has been imposed with immediate effect.

In the second phase, the levy will be increased to 10 percent. According to the implementation plan, the rate will rise further to 15 percent by February 2026 and reach 20 percent by August 2026. 

Authorities said the increase in the levy rate is expected to expand the scope of electricity rate reduction as higher revenue is generated.

Sources said every captive power plant using gas or LNG will be required to pay the levy to the federal government. The collected amount will be pooled and used specifically for lowering electricity rates in the power sector.

The government has also outlined enforcement measures to ensure compliance. In cases where captive power plants fail to pay the levy, action will be initiated against the defaulting entities. If non-payment continues, gas supply to the concerned captive power plant will be disconnected.

The move is part of the government’s broader plan to restructure the power sector following discussions with the IMF.