Industries and employment generation in Pakistan have suffered while the country’s reliance on foreign goods has increased due to smuggling and this is creating a never-ending vicious cycle, remarked Federal Minister for Economic Affairs Sardar Ayaz Sadiq.
Speaking at a briefing arranged by Ipsos for parliamentarians to discuss tax evasion in five major sectors, Sadiq said that it was alarming to see huge tax evasion, predominantly in real estate and tobacco sectors.
Estimates reveal that the total tax potential of the tobacco industry for fiscal year 2023-24 stands at more than Rs500 billion but more than 50% is evaded by the powerful illicit tobacco sector.
The minister pointed out that the decline in large-scale manufacturing, corroborated by the Pakistan Bureau of Statistics, would have a detrimental long-term impact on the legitimate industry, employment, and exports.
“Real estate is an important sector but it has its own disadvantages and we need to control the mushroom growth of housing societies on agricultural land,” he stressed.
Adviser to Prime Minister on Kashmir Affairs and Gilgit-Baltistan Qamar Zaman Kaira stressed that Pakistan was losing Rs1 trillion in tax evasion annually, adding that if tax leakages were controlled through stringent enforcement of laws and the black economy was brought to the tax net, Pakistan would not require any foreign funding.
Published in The Express Tribune, June 16th, 2023.
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