As Pakistan grapples with economic challenges, the crackdown on hoarders and black marketeers is starting to yield promising results, offering a glimmer of hope for the country’s struggling economy.
The stringent measures against illegal foreign exchange operations have led to a rapid improvement in the exchange rate and the stabilization of the rupee’s value. The significance of this crackdown is gaining traction among experts who now emphasize the need to include curbing large-scale illegal trade, hoarding, and black marketing in the national strategy for economic recovery.
Pakistan is currently grappling with substantial economic losses stemming from illegal trade. According to a recent report by the Ipsos, illicit trade in just five major sectors has resulted in a staggering loss of approximately one trillion rupees in tax revenue.
The Ipsos report highlights the extent of tax evasion in the real estate, tobacco, tyres and auto lubricants, pharmaceuticals, and tea sectors, totaling a staggering Rs. 956 billion. This substantial loss severely impairs the government’s ability to invest in critical areas such as infrastructure and social programs.
Experts are unanimous in their call for immediate policy reforms to curb illegal trade and recover essential tax revenue crucial for the country’s economic stability.
The tobacco sector emerges as a major contributor to Pakistan’s tax losses, with an annual tax evasion of approximately Rs. 240 billion. Illicit trade in tobacco products not only erodes government revenue but also poses significant public health risks. Counterfeit or untaxed cigarettes do not meet quality and safety standards, thereby endangering the health of consumers.
Addressing tax evasion is now viewed as an imperative step for Pakistan’s economic recovery and long-term sustainability. The success of the crackdown on illegal foreign exchange traders in various parts of the country within a short timeframe serves as a compelling example of what can be achieved through strict action against those who undermine the economy through illegal trade.
To address the issue comprehensively, authorities must strengthen tax enforcement measures and enhance monitoring mechanisms within the identified sectors. This may involve increasing surveillance and conducting regular audits to prevent tax evasion effectively.
Additionally, preventing illegal tobacco trade can be achieved through the uniform and efficient implementation of a track and trace system. Collecting advance tax at the green leaf threshing level could also significantly aid in this effort.
The staggering economic losses resulting from tax evasion underscore the urgency of proactive measures to tackle the problem and recover much-needed tax revenues. Experts believe that by incorporating these five sectors into the recent economic recovery campaign, relief can be provided to citizens grappling with the economic crisis and rising inflation.
As Pakistan charts a path towards economic revival, it is clear that eradicating illegal trade and ensuring fair taxation practices are fundamental steps in securing a more stable and prosperous future for the nation.
