Rickshaw drivers wait for customers at a market in Rawalpindi on July 11, 2023. AFP
Rickshaw drivers wait for customers at a market in Rawalpindi on July 11, 2023. AFP
Rickshaw drivers wait for customers at a market in Rawalpindi on July 11, 2023. AFP
Rickshaw drivers wait for customers at a market in Rawalpindi on July 11, 2023. AFP

Cost-of-living crisis in Pakistan harming ruling parties’ chances in November elections


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Naveed Zahid, a taxi driver in Peshawar, has pulled his children out of private schools as he is no longer able to afford the tuition fees.

“Two of my children are not old enough to go to school, but the other two had been going to private schools because I wanted them to have a better education,” he told The National.

“However, amid the current inflation rise, I had no option but to enrol my four children in a state-run school where I don’t have to pay a monthly fee, or any other expenses.”

Mr Zahid works hard to provide for his children, but the rising price of petrol and other commodities has made it difficult for him to make ends meet.

Pakistan's Finance Minister Ishaq Dar announced the 7.8 per cent increase in diesel and petrol prices last week in an attempt to meet fiscal objectives laid out in a deal with the International Monetary Fund.

This led to a rise in the prices of other products and services that largely rely on fuel. Mr Dar blamed the rise in prices on the global market.

The rise in fuel prices has forced taxi drivers such as Mr Zahid to increase their fares. Passengers often refuse to pay it, he says.

Like Mr Zahid, thousands of lower and middle-class families are grappling with the challenges that inflation has created, with many struggling to provide for their daily needs.

Pakistan plans to hold elections in November amid speculations of possible delays.

Muhammad Ali Saif, provincial secretary of information of Pakistan Tehreek-e-Insaf, one of the country's most powerful political parties, told The National that while the PTI is the focus of a great deal of public rage, the results of recent by-elections showed that it is still popular.

Last week, the Election Commission of Pakistan organised by-elections in two councils, Mathra and Havelian.

“We saw the results of two by-elections in KP [Khyber Pakhtunkhwa],” Mr Saif said.

“The tehsil council Mathra was won by the Pakistan Tehreek-e-Insaf and the other Havelian council was won by an independent candidate.”

Ikhtiyar Wali, a senior leader in the Pakistan Muslim League, the country's incumbent ruling party, said that voters in the general elections consider both the manifesto of the party and the candidate.

“Before his government, Imran Khan had promised making 500 million homes for Pakistanis, but it could not happen,” Mr Wali said.

“He had promised to turn governor houses into varsities, but that also did not happen. There were many promises he had made. People also remember this.”

Khan spent Monday night in prison after a local court handed him a three-year jail sentence in the Toshakhana case. The conviction also bars him from politics for five years.

He challenged his conviction on Tuesday, his lawyer said.

  • Lawyers gather to protest following the arrest of Pakistan's former Prime Minister Imran Khan, outside his residence in Lahore, Pakistan on Saturday. Reuters
    Lawyers gather to protest following the arrest of Pakistan's former Prime Minister Imran Khan, outside his residence in Lahore, Pakistan on Saturday. Reuters
  • Police officers and members of the media gather outside his residence in Lahore. Reuters
    Police officers and members of the media gather outside his residence in Lahore. Reuters
  • Khan has called on his party and followers to remain calm. EPA
    Khan has called on his party and followers to remain calm. EPA
  • Outside his residence in Lahore, Pakistan, followers chant slogans against the court's decision to jail him for three years. AP
    Outside his residence in Lahore, Pakistan, followers chant slogans against the court's decision to jail him for three years. AP
  • Court officials say Khan will served out his sentence at a prison in Rawalpindi. AP
    Court officials say Khan will served out his sentence at a prison in Rawalpindi. AP
  • Imran Khan was convicted on Saturday in an asset concealment case that could disqualify him from politics as national elections loom. AP
    Imran Khan was convicted on Saturday in an asset concealment case that could disqualify him from politics as national elections loom. AP

Sarfraz Khan, an analyst and former director of Area Study Centre University of Peshawar, said that fair elections seem to be impossible and claims there is a possibility of fraud in the coming polls.

“There are three phases of rigging,” he told The National.

“Pre-poll rigging in which image of a candidate or party can be spoiled before elections; rigging on the polling day, wherein a party or candidate can use resources to buy votes on the polling day and polling staff can be influenced; and post-poll rigging wherein the ballot boxes can even be replaced and ballots can be stamped in favour of a party or candidate at a vote station.

“What Pakistan needs is national reconciliation, under which all political leadership, army chief and judiciary should sit together and decide that all the state institutions will work in their own jurisdictions only. This would lead to fair elections and no institution would be able to interfere in elections, and it would also strengthen democracy.”

As to the cost-of-living crisis, he said that the increase in prices of various commodities, particularly petroleum products, have affected the incumbent ruling parties’ popularity graph in the country, particularly when the general elections are around the corner.

“When I compare both sides, the previous government of PTI and the incumbent rulers, both have not performed well,” he said.

Meanwhile, the Election Commission of Pakistan is deciding whether to remove Khan from leadership of the PTI, senior leader and former minister Atif Khan told The National.

“In Imran's absence, the vice chairman Shah Mehmood Qureshi is managing party affairs as acting chairman,” Mr Atif added.

“However, I think the Election Commission is mulling Imran's removal as party chief after his conviction.”

But Sohail Ahmed, an official from the Election Commission, told The National the decision to remove Khan has yet to made.

“It is yet to be decided whether to remove Imran from party chairmanship or not,” he said.

Meanwhile, a senior leader of the Pakistan Muslim League (PML-N), told The National that the party's chief Nawaz Sharif had advised his party as well as his brother, Prime Minister Shehbaz Sharif, not to remove Khan from government through a no-confidence vote.

“Nawaz had asked his party men to avoid dislodging Imran from government and let him continue in government,” the senior leader said.

“In this way, he [Khan] would have been blamed for the ongoing price hike now. But the PML-N leaders did not agree on this, and they dislodged Imran and as a result, they are now being criticised for the spiralling prices.”

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The specs: Rolls-Royce Cullinan

Price, base: Dh1 million (estimate)

Engine: 6.75-litre twin-turbo V12

Transmission: Eight-speed automatic

Power: 563hp @ 5,000rpm

Torque: 850Nm @ 1,600rpm

Fuel economy, combined: 15L / 100km

The specs: Aston Martin DB11 V8 vs Ferrari GTC4Lusso T

Price, base: Dh840,000; Dh120,000

Engine: 4.0L V8 twin-turbo; 3.9L V8 turbo

Transmission: Eight-speed automatic; seven-speed automatic

Power: 509hp @ 6,000rpm; 601hp @ 7,500rpm

Torque: 695Nm @ 2,000rpm; 760Nm @ 3,000rpm

Fuel economy, combined: 9.9L / 100km; 11.6L / 100km

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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