Pakistan’s Finance Minister dropped a bombshell in parliament: multiple global corporations have abandoned the country due to skyrocketing taxes and energy prices. Muhammad Aurangzeb’s revelation underscores the fragility of the nation’s investment climate amid ongoing economic turbulence.
This corporate flight spans critical sectors, from consumer goods to heavy industry. Executives have publicly lamented the ‘unbearable’ duo of high electricity tariffs—among the world’s steepest—and a complex tax system that devours revenues. One departed firm reportedly faced power costs eating up 40% of its budget, an unsustainable load.
Aurangzeb contextualized the exits within Pakistan’s broader fiscal reforms, driven by international lenders. ‘These measures stabilize finances but at the cost of business viability,’ he observed. Official figures reveal a sharp decline in new project approvals, with energy woes cited in over 60% of withdrawal applications.
The implications ripple far beyond individual companies. Job losses mount, export capacities shrink, and technology transfer stalls. Analysts compare Pakistan unfavorably to regional peers offering subsidized energy and streamlined taxes, urging a policy pivot.
In response, the ministry is mulling relief packages, including green energy incentives and corporate tax cuts for high-value investments. However, entrenched issues like theft in distribution networks and fuel import dependencies complicate fixes. The minister’s candid assessment signals a potential turning point—if bold reforms follow.