Pakistan's Economic Hurdles: Combating Illicit Trade

Pakistan is losing Rs 3.4 trillion yearly due to illicit trade, particularly from misuse of the Afghan Transit Trade facility. The report by PRIME highlights the challenges illicit trade poses to the economy, undermining formal sectors and reducing government revenues, with major smuggling issues in oil and consumer goods.

A staggering Rs 3.4 trillion loss to Pakistan's economy has been reported, largely due to illicit trade practices, including the Afghan Transit Trade facility, according to the Policy Research Institute of Market Economy (PRIME).

The report, titled 'Combatting Illicit Trade in Pakistan,' reveals the severity of this issue, equating losses to 26% of this fiscal year's tax target. The informal economy, valued at USD 123 billion annually, is threatening formal businesses and government revenues.

The widespread smuggling of petroleum, counterfeit pharmaceuticals, and non-tax-paid cigarettes highlights the sectors most affected by illicit trade. Recent relaxations in import conditions for Afghanistan-bound goods may further complicate efforts to curb smuggling.

(With inputs from agencies.)