Finance Minister Aurangzeb dropped a bombshell: numerous international corporations are quitting Pakistan due to exorbitant taxes and energy costs that render business unviable. This revelation paints a grim picture of an economy struggling to attract and retain foreign capital.
Key sectors like cement, pharmaceuticals, and electronics have seen high-profile exits. Once bustling industrial zones now stand half-empty, with equipment mothballed and workers laid off. The minister attributed this to a tax-to-GDP ratio stuck at a dismal 10%, far below global norms, yet burdensome for operators.
Power woes compound the issue. Circular debt in the energy sector exceeds $15 billion, forcing utilities to hike rates relentlessly. Industries consume 40% of electricity but face loadshedding up to 12 hours daily in some areas. ‘It’s a perfect storm driving companies away,’ Aurangzeb noted.
The government is negotiating with the World Bank for energy sector loans and plans a single-window tax portal. However, implementation delays have bred distrust. Analysts predict a 5% GDP contraction if trends persist, urging privatization of loss-making utilities.
Communities near industrial hubs are reeling from job losses, fueling unrest. Reviving investor interest demands bold moves: slashing duties, ensuring power reliability, and fostering ease of doing business. The minister’s candid admission is step one; execution will define Pakistan’s economic destiny.