ISLAMABAD: The federal government plans a Flood Levy Ordinance to raise funds for communities hit by recent floods. It aims to support the rebuilding of essential facilities damaged across the country. Officials in Islamabad said the Ministry of Law and Justice has sent the draft to President Asif Ali Zardari. Once he signs the ordinance, it will take effect without delay. The move will empower authorities to collect extra charges on imported and locally manufactured luxury goods.
Taxes on Luxury Goods Under Review
The proposed plan includes a special tax on premium electronic products. Furthermore, the government will impose an extra Rs. 50 on each cigarette pack. The cost increase will apply to every brand, regardless of price. Officials are also evaluating regulatory duties on imported vehicles and other expensive items. They expect the new measures to generate over Rs. 50 billion for a national flood relief and reconstruction fund.
Concerns Over Fiscal Arrangements
However, sources noted that the plan could face legal hurdles. Funds raised through such levies may not transfer smoothly to provinces. Current fiscal rules could prevent a direct flow of money to regions requiring urgent restoration.
Massive Losses Highlight Urgency
Pakistan continues to struggle with the aftermath of destructive monsoon floods. A Planning Commission report said losses reached Rs. 822 billion ($2.9 billion). Agriculture lost more than Rs. 430 billion. Damages to infrastructure stood at Rs. 307 billion. The disaster killed over 1,000 people and destroyed 229,000 homes. It also damaged 2,811 kilometres of roads and 790 bridges. These losses disrupted transport networks and slowed recovery efforts across several provinces.
Economic Challenges Continue
The ordinance arrives during a fragile economic rebound. The IMF’s October 2025 outlook projected Pakistan’s growth at 3.6 percent for FY26. Yet the report warned of rising inflation and pressure on the current account.
