In a damning expose, Pakistan faces an annual revenue hemorrhage of around 1 trillion rupees due to widespread tax dodging. Pakistani outlets like Business Recorder lay bare how evasion in key sectors is not just rampant but protected at high levels.
Real estate leads the pack, evading 500 billion rupees yearly through undervaluation scams. The black-market tobacco business chips in another 310 billion, operating brazenly outside formal channels. Many consumer industries shun the documented economy altogether, thriving in shadows.
The report accuses regulators of collusion, stating such scale couldn’t exist without their backing. A mere nudge of enforcement could shrink this parallel universe. The FBR’s first-half fiscal deficit of 545 billion rupees exposes more than weak activity – it’s proof of intentional tax avoidance on massive value generation.
Governments respond by squeezing compliant taxpayers harder: employees, legit firms, and structured enterprises bear disproportionate loads. This approach kills investment drive, warps incentives, and lures borderline businesses into evasion, perpetuating a toxic loop of penalizing virtue.
Ipsos studies confirm the rot runs deep. Persistent low appraisals and lax checks in property markets, unchecked tobacco syndicates despite traceable supply chains – the pattern repeats in tires, oils, drugs, and beverages.
Calls for focused crackdowns, robust tracking, accurate assessments, and digital oversight echo loudly, yet political resolve falters. Taming the informal beast requires battling influential players and insulating enforcers from meddling – failures that have defined Pakistan’s fiscal policy for years.
Until leaders muster the courage to reform, Pakistan’s economy will continue leaking vital funds, undermining growth and stability.
