Stakeholders have appreciated the interim government for launching a crackdown against tax evaders, smugglers, and hoarders.
“This crackdown is a long-overdue response to the distressing times in which the government struggles to run the country’s operations, plagued by dwindling revenue collection and rampant smuggling and tax evasion,” said Syed Saifullah Kazmi, Head of Investment Banking at Intermarket Securities Limited.
However, he emphasized that strong determination and effective policy execution are essential to maximize the benefits of this initiative,
A report submitted to the government by the Intelligence Bureau (IB) has unveiled shocking statistics regarding smuggling, tax evasion, drug trade, illegal currency business, and misuse of Afghan transit trade.
According to the report, the illegal supply of Iranian petroleum, oil, and lubricants (POL) products alone results in an annual loss of at least Rs.225 billion to the national exchequer.
Similarly, the report highlighted that the imposition of heavy taxes on Tier-I and Tier-II cigarettes in March 2023 has led to an increase in smuggling. Tax evasion is rampant in the tobacco industry, with approximately Rs 240 billion lost annually. Tobacco stands as one of the top five sectors contributing to tax evasion in Pakistan’s struggling economy.
Mr Kazmi pointed out that the report itself underscores the lack of monitoring of trade routes and tax-evading sectors and manufacturers.
It highlighted the deeply entrenched corruption and dysfunction within the country’s systems, bringing it perilously close to a precipice. This comprehensive crackdown on these tax evaders and smugglers will help to plug the revenue leaks and achieve revenue targets, he said.
