Daily Times

The ACT Alliance, comprising 17 civil society organizations, on Tuesday urged the authorities concern to take concrete measures against tax evasion and smuggling which were badly impacting the national economy.

In this regard, a meeting was convened by the ACT Alliance (Action and Counter Illicit Trade), during which the ACT Alliance’s Chief Executive Mubashir Akram, provided an alarming overview of the escalating scale of tax evasion and smuggling within Pakistan, with a particular focus on the tire and lubricant, cigarettes, tea, real estate, and pharmaceutical sectors, said a news release.

Mubashir Akram outlined disturbing trends, emphasizing how illicit trade/smuggling drains Pakistan’s economy.

Citing a recent report from February, he said that Pakistan loses approximately Rs5.8 trillion (approximately $21 billion) annually due to tax evasion, while illicit trading causes an additional loss of nearly Rs1 trillion (approximately $3.57 billion) to the nation’s exchequer.

The figures highlighted a dire need for immediate and robust intervention to stem this economic bleed.

The following discussion expressed deep concerns, and there was a consensus on the critical impact of tax evasion and illicit trading practices on the national economy and the urgent need for comprehensive action.

The representatives expressed that the scale of these activities undermines legitimate businesses and deprives the government of significant revenue, which could otherwise be utilized for public welfare and development.

The ACT Alliance, established in October 2016, has been at the forefront of combating illicit trade in Pakistan. It aims to address some of the country’s most pressing economic challenges, including illicit trading, tax evasion, smuggling, and counterfeiting.

Through its efforts, the Alliance seeks to cut the financial losses due to these illicit activities by at least 50 percent, thereby unlocking potential resources for the nation’s development and social upliftment.

The Alliance emphasized the necessity of developing a robust regulatory framework, enhancing public awareness, and fostering international cooperation to combat these detrimental activities effectively.

The participants noted that tax evasion and illicit trade are intricately linked, with illegal cigarette manufacturing representing one of the top two sectors, incurring an annual loss of over Rs300 billion.

The meeting said that this significant percentage reflects a grave issue where the illicit production and illegal sale of cigarettes bypass legal channels and severely undermine the national exchequer.

The illicit cigarette market, therefore, not only distorts competition but also inflicts a heavy toll on the economy, depriving the government of crucial funds needed for development and public services.