The ongoing war in the Middle East has triggered an energy crisis for the world and “no country is immune” to its shockwaves, the International Energy Agency (IEA) warned on Monday. Addressing the National Press Club in Australia’s capital, Birol said the current situation has evolved into an unprecedented disruption, combining multiple shocks to oil and gas supplies.“This crisis as things stand is now two oil crises and one gas crash put all together,” he said. He also drew comparisons with the oil shocks of the 1970s and the fallout from Russia’s 2022 invasion of Ukraine.Highlighting the broader economic risks, Birol said, “The global economy is facing a major, major threat today, and I very much hope that this issue will be resolved as soon as possible.”Commenting on the fallout of the energy crisis, Fatih Birol said, “no country will be immune to the effects of this crisis if it continues to go in this direction,” adding, “so there is a need for global efforts.”The conflict has already caused extensive damage to energy infrastructure, with Birol noting that at least forty facilities across nine countries in the region have been “severely or very severely damaged”.“At least forty… energy assets in the region are severely or very severely damaged across nine countries,” he said.The disruption was intensified by the near shutdown of the Strait of Hormuz, a key transit route for roughly one-fifth of global oil and gas shipments. The standoff has deepened as the war entered its fourth week, with Donald Trump and Tehran issuing repeated threats, including Washington’s demand for the reopening of the waterway.Birol identified the reopening of the Strait of Hormuz as the most critical step towards stabilising the situation, while also flagging rising fuel shortages in Asia as a growing concern. Oil markets reflected the strain, with US benchmark crude briefly touching the $100-per-barrel mark early on Monday. As fuel prices continue to rise, he added that there would not be any specific crude level to trigger another release.He added that the agency is currently consulting governments worldwide and remains prepared to release additional oil from emergency reserves if needed, though he clarified that no specific price level would automatically trigger such a move. Meanwhile, US President Donald Trump issued an ultimatum to Iran to reopen the strategically critical Strait of Hormuz within 48 hours, warning of military consequences if it failed to comply. He said, “If Iran doesn’t fully open, without threat, the Strait of Hormuz, within 48 hours from this exact point in time, the United States of America will hit and obliterate their various power plants, starting with the biggest one first! Thank you for your attention to this matter.” In response, Tehran warned, signalling that any attack on its energy infrastructure would prompt retaliation beyond conventional military targets. The message was conveyed by Ebrahim Zolfaghari and carried by Islamic Republic of Iran Broadcasting. He said any strike on Iran’s fuel and energy sector would trigger action against a broader range of targets linked to the United States and its regional allies.Earlier this month, 32 member nations of the IEA agreed to release 400 million barrels of oil from their emergency reserves to the market, to deal with the ongoing energy supply disruption.

A major beauty brand is enticing all its UK employees to earn a cut of any sales they drive on TikTok Shop in a bid to cash in on the rapid rise of the influencer-led beauty market.

MAC Cosmetics is kitting out shops with mini studios for its makeup artists to host live shopping shows when it launches on TikTok Shop on April 2.

It says it is the first major beauty brand in the UK to give every member of staff the opportunity to opt in as an affiliate and sell on the social media platform.

Those who become faces of the live channel will be offered a percentage of any sale that they drive on TikTok Shop.

The makeup artists will be encouraged to host tutorials and product demonstrations, with items available to buy directly through the app.

MAC, which is part of the Estee Lauder group of beauty brands, said the first live shopping show will stream from its Carnaby Street store in London.

It is hoping that tapping into social media shoppers will also bring more people into its more than 230 standalone shops and concessions.

TikTok Shop burst onto the UK’s retail scene in 2021 and, in recent years, has become a significant force in the world of e-commerce, reaching millions of people who use the video-sharing app and converting many into shoppers with a few taps.

Many content creators can earn a commission on products that they sell through the app when they co-operate with a brand or retailer.

Major retailers like Marks & Spencer and Sainsbury’s are now selling products on the marketplace alongside thousands of smaller businesses and brands.

The app has particularly been part of a boom for the beauty market, with beauty sales on the platform soaring by 60% year-on-year in 2025, fuelled by trends such as Korean skincare.

But the spread of in-app shopping has also prompted concerns about so-called impulse buying, particularly among younger consumers who are often targeted by influencer-led marketing.

Sara Staniford, the vice president and general manager of MAC in the UK and Ireland, said: “MAC has always been driven by our artists and the communities they create.

“TikTok Shop gives us an exciting new way to celebrate that creativity and connect with beauty lovers in real time.

“It puts our artists exactly where they belong, at the centre of the conversation.”

The federal budget for next fiscal year (2026-27) will be under preparation after Eid holiday. Our policymakers would face an uphill task to balance the budget amidst the 37-month $7 billion Extended Fund Facility (EFF) of the International Monetary Fund (IMF) and shockwaves of the war imposed on Iran by the US and Israel in circumstances.

Regional war has intensified geopolitical risk, commodity markets remain volatile and global financial conditions continue to tighten. For a country already navigating fiscal consolidation under an IMF programme, the margin for policy error has become extremely narrow.

In such moments, governments often resort to familiar instruments: higher tax rates, new levies and additional withholding measures designed to secure immediate revenue. Pakistan’s experience over several decades suggests that this approach rarely produces durable fiscal stability. Slower investment, weaker economic activity and a shrinking tax base often follow temporary revenue gains.

A more sustainable framework for fiscal policy is outlined in the PIDE-PRIME Tax Reforms Commission report titled “Revenue with Growth”. The report argues that Pakistan’s tax system must move away from narrow revenue extraction towards a structure that supports economic expansion. Simplification of taxes, encouragement of investment, protection of exports and modernisation of tax administration form the central pillars of this approach. In the difficult environment facing the country today, this framework offers a practical guide for budget strategy.

Escaping high-tax, low-growth trap

Pakistan’s fiscal dilemma has long been structural. Revenues remain modest relative to the size of the economy while expenditures – particularly debt servicing and defence – continue to rise. Periods of geopolitical tension naturally intensify these pressures.

Historically, the response has been to increase taxes on existing taxpayers rather than expand the underlying economic base. This pattern has created a cycle in which weak growth leads to revenue shortfalls, tax rates are increased to meet fiscal targets, higher taxes suppress investment and economic activity, and slow growth again produces fiscal stress.

The PIDE-PRIME report challenges this cycle by emphasising a basic principle of public finance: tax systems designed primarily for extraction eventually undermine the revenue they seek to maximise. Breaking this pattern requires a shift towards policies that expand the productive economic activity.

Simplifying complex tax system

Pakistan’s tax structure has gradually evolved into a complicated web of withholding taxes, presumptive regimes and special levies such as super tax and turnover taxes. Such complexity raises compliance costs, increases litigation and discourages documentation of economic activity. Simplification therefore becomes the logical starting point for reform.

A tax structure with moderate rates applied to a broader base is more likely to encourage compliance while reducing administrative disputes. Predictability is particularly important in the present environment where businesses already face uncertainty from global geopolitical developments.

Encouraging investment and industrial expansion

Economic growth ultimately depends on investment. Yet Pakistan’s tax policy often raises the cost of investment through high duties on machinery and industrial inputs.

The PIDE-PRIME report recommends removing regulatory duties and additional customs duties and allowing zero-rating of plant, machinery and key intermediate goods. Such measures would reduce the cost of capital investment and support technological upgrading within industry.

For the upcoming budget, this principle carries special significance. Periods of regional instability often lead businesses to delay expansion plans. Clear policy signals encouraging industrial investment can counter that hesitation and strengthen confidence in the economy.

Protecting export competitiveness

Exports remain central to Pakistan’s economic resilience. Yet exporters frequently face liquidity constraints arising from withholding taxes, delayed refunds and administrative bottlenecks.

Budget policy should therefore focus on removing distortions affecting export sectors and ensuring efficient refund mechanisms. Strengthening export competitiveness improves foreign exchange earnings and reduces pressure on the balance of payments – an objective that becomes even more critical during periods of global economic turbulence.

Modernising tax administration

Tax reform cannot succeed without administrative reform. The PIDE-PRIME report emphasises the importance of digitisation, automation and reduced discretionary authority in tax administration.

Modern data-driven systems can minimise direct interaction between taxpayers and officials, reduce opportunities for rent seeking and improve voluntary compliance. Administrative credibility becomes especially important in times of economic stress when taxpayers already face higher costs and uncertainty.

Fiscal discipline and credibility

Credible fiscal management must accompany a growth-oriented tax system. Citizens are more willing to comply with taxation when public expenditures demonstrate discipline and transparency.

The upcoming budget should therefore combine tax reform with efforts to rationalise non-development spending and improve efficiency in public sector operations. Fiscal credibility strengthens the relationship between the state and taxpayers and supports long-term revenue mobilisation.

Turning crisis into reform

Pakistan’s economic history shows that periods of crisis often create the political space for structural reform. The present geopolitical and economic pressures therefore offer an opportunity to rethink fiscal strategy.

Instead of repeating the familiar pattern of incremental tax increases, policymakers could use the upcoming budget to initiate transition towards a growth-oriented tax system. Simplifying taxes, encouraging investment, strengthening exports and modernising administration would gradually expand the economic base and improve long-term fiscal stability.

In uncertain times, the most effective fiscal policy is not the one that extracts the largest revenue in the short term. It is the one that strengthens the productive capacity of the economy and ensures sustainable revenue in the years ahead.

The writer is the Advocate Supreme Court, Adjunct Faculty at LUMS, member Advisory Board, visiting Senior Fellow of Pakistan Institute of Development Economics and holds LLD in tax laws