DAWN Editorials - 1st May 2025

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Labour rights

ON Labour Day, Pakistan must reframe its narrative on trade unions and restore labour rights. Beset with a raft of challenges — poor wages, absence of job stability and the freedom to establish independent associations — the labour force has been denied a greater political space to voice its woes for too long. For the daily-wage workers, May 1 holds little meaning. Last year, President Asif Zardari and Prime Minister Shehbaz Sharif reiterated the government’s commitment to strengthen and uphold labour welfare and rights. These claims, sadly, continue to ring hollow as miseries mount. Despite the global eight-hour shift, many labourers in Pakistan are on duty for up to 16 hours without overtime payments. Additionally, in an economic backwater where rampant pay cuts and dismissals are the new normal, amid crushing utility bills and inflation, weak unions represent mentally and physically exhausted workers with low socioeconomic productivity.

Although it was Gen Pervez Musharraf who devitalised labour organisations and restricted the role of labour unions as negotiators for improved work environments, the Pakistan Essential Service (Maintenance) Act, 1952, is frequently used by elected governments to prohibit union activities in the public sector, such as PIA. As a result, the government and industry policies see workers as a burden and not an asset. Moreover, after the minimum wage is raised, related notifications are delayed for months by the wage boards; thousands remain underpaid due to lax implementation. The well-being of the informal economy labour force — domestic and unskilled workers — depends on private employers. It is crucial for the state to initiate reforms and stand by the workers, and view their rights as human rights in policymaking. Labour dignity needs to be ensured through satisfactory salaries, safe settings, health coverage for workers and their dependents, as well as educational support for their children. The current economic crisis calls for a sensitive environment where the government, citizens and labour unions operate in harmony.

Published in Dawn, May 1st, 2025


Tax proposals

THE government must treat the tax proposals of the Overseas Investors Chamber of Commerce and Industry for the FY26 budget as a cry for help from businesses — and individual taxpayers — groaning under the weight of excessive taxation and high tax rates. The recommendations of the trade body, which represents the business interests of over 200 foreign companies operating in Pakistan, mainly focus on gradually reducing the tax burden on the corporate sector by cutting the corporate tax rate to 25pc in five years and scrapping the super tax in three years for a predictable and business-friendly fiscal environment. Additionally, it has called for doubling the taxable income threshold for the salaried and other individuals to Rs1.2m to put a little extra disposable cash into the pockets of low-income, inflation-stricken individuals to boost consumption. Nevertheless, it suggests that mandatory tax filing remain unchanged for all earnings in excess of Rs0.6m to increase the number of filers. Other suggestions include a gradual reduction of the sales tax on goods to 15pc to match the regional average and expediting the harmonisation of the federal and provincial sales tax rates in order to do away with distortions and make compliance easier.

Ostensibly, the suggested reforms are not difficult to implement, but the tax targets and one of the world’s lowest tax-to-GDP ratios might cause policymakers to think twice before reducing the existing burden on taxpayers. In other words, policymakers would need to draw up a clear reform roadmap aimed at broadening the tax base, significantly improving compliance, and plugging evasion before rates can be reduced without jeopardising revenue targets and the loan agreement with the IMF. More than that, the rulers need strong political will to reform the inequitable tax system by tackling the undertaxed sectors such as retail, real estate and agriculture. According to media reports, the OICCI believes that “a more equitable contribution across all sectors, proportionate to their share of GDP, could increase the tax-to-GDP ratio to nearly 14pc from below 10pc”. The present tax regime is opaque, unpredictable and inequitable. It impedes investment, job creation and business growth, and is responsible for increasing evasion and a growing undocumented economy. If the country is to attract foreign investment in the real, productive sectors and raise its tax-to-GDP ratio, it will have to first restructure its taxation system.

Published in Dawn, May 1st, 2025


War clouds

AT a time when bellicosity — most of it originating in New Delhi — is drowning out rational discourse in the subcontinent, sanity must be given room.

Early on Wednesday, Pakistan’s federal information minister said that India could be “planning something” within a day or two. On Tuesday, Deputy Prime Minister Ishaq Dar had told the Senate that New Delhi was preparing “some form of escalation”. These warnings take on added significance when the Indian PM’s instructions giving “operational freedom” to his military are taken into account. And it is not mere words that are causing alarm; things on the ground are also heating up.

In the days following the Pahalgam tragedy, there has been regular crossfire across the LoC, while the military shot down two Indian quadcopters in AJK on Tuesday. Moreover, state media had reported that Indian warplanes had been patrolling near the LoC when they were confronted by PAF jets. On Wednesday evening, Mr Dar, along with the ISPR head and FO spokesperson, reiterated that Pakistan would respond if provoked.


India continues beating the war drums despite no credible evidence linking Pakistan to the Pahalgam tragedy. This dangerous brinkmanship can have devastating consequences for South Asia, and it is highly irresponsible of the Indian state and large sections of the Indian media to whip up war hysteria in a nuclear neighbourhood. It bears repeating that if India has any solid evidence, it should share it with Pakistan and the rest of the world.

Moreover, if New Delhi is confident of its assertions, it should agree to have a neutral third party investigate the attack. Clearly, due to the lack of any plausible evidence against Pakistan, India is trying to manufacture a crisis. This is a highly dangerous game which can have unpredictable ramifications for the entire region.

The UN chief has offered his good offices to avoid a fresh conflagration. Both sides need to take up this offer to prevent the march to war. Other common friends, such as the Gulf states, the US and Russia, can also play a part in bringing temperatures down. In this respect, the US secretary of state talked to PM Shehbaz Sharif yesterday. Nearly eight decades of hostility have given nothing positive to the region. Once the war hysteria lessens, India must calm down to consider the merits of talking to Pakistan regarding all issues — including Kashmir — if it is serious about peace. Pakistan can and will defend itself against Indian aggression, but any military engagement will result in more death and destruction for the entire region. Therefore, New Delhi must change its belligerent tone and work to resolve this crisis with statesmanship, which has been sorely missing under the BJP set-up. The window for a peaceful resolution may be closing fast.

Published in Dawn, May 1st, 2025