Pakistan Fact sheet
Background: The Islamic Republic of Pakistan was founded in 1947. East Pakistan (now Bangladesh) seceded in 1971. Since independence there have been several military coups. The last was in 1999, when the chief of army staff, Pervez Musharraf, became the chief executive of Pakistan. In 2001 he became the country’s president, and parliament re-elected him in October 2007. Mr Musharraf resigned as army chief in November 2007 and stood down as president in August 2008. The general election that took place in February 2008 resulted in a new coalition government led by the Pakistan People’s Party and the Pakistan Muslim League (Nawaz); the latter party withdrew from the government in August 2008.
Political structure: After a series of constitutional alterations in recent years that increased the powers of the president at the expense of parliament and the prime minister, parliamentary supremacy was restored in 2010 when both houses of the legislature approved a landmark constitutional amendment that reversed the changes of the previous few years. The National Assembly (the lower house of parliament) was elected in February 2008 for a five-year term. Provinces are represented in the National Assembly in proportion to the size of their populations. An election to the Senate (the upper house), in which the four provinces have equal representation, was held in March 2012. Senators serve terms of six years, and one-half of the seats in the upper house come up for re-election every three years.
Policy issues: Mr Musharraf oversaw the gradual liberalisation of the economy, but political instability, civil unrest and the threat of terrorist violence have damaged the business operating environment since 2008. The government will need to reassure foreign investors and promote growth in foreign investment inflows. Long-term economic stability will depend on speeding up the privatisation programme, achieving growth in exports and maintaining official inflows of remittances. In the early part of the forecast period, policy will focus on reducing the fiscal deficit and taming inflation.
Taxation: The highest income tax rate stands at 25% and the lowest at 0.25%. The corporate tax rate is a uniform 35%. Non-residents are exempt from tax on income earned from stocks and government securities.
Foreign trade: Merchandise exports (fob) stood at US$21.5bn in 2010, while imports (fob) totalled US$32.9bn in that year, resulting in a trade deficit of US$11.4bn.