ISLAMABAD, Nov 17 (APP):The Federation of Pakistan Chamber of Commerce and Industry’s United Business Group (UBG) Thursday demanded the government that smuggling and illicit trade in counterfeit products needs to be curbed without further delay to protect the organised industry and consumers.
Talking to a delegation of industrialists and traders led by Chaudhary Ghulam Mujtaba MD Vital Tea, UBG Chairman Shahzad Ali Malik said every country in the world is grappling with the issue of parallel economy and Pakistan is not all alone in this scenario.
He said there is no right way of accurately measuring the undocumented part of the economy. Hence, the size of Pakistan’s shadow economy is estimated to be in range of 30-50pc of the nation’s total reported GDP by various studies using different methodologies.
He said the shadow or informal economy refers to economic activities taking place outside the tax and regulatory system, and may or may not have any backward or forward linkages with the organised sector.
He said the problem with Pakistan is that the size of the unreported economy has grown so high that it is now bearing down on formal sectors, penalising taxpayers, undermining tax collection, intensifying market distortions and creating an uneven field for organised businesses.
He said the existence of unregulated economic activities across almost every segment of business underlines poor governance, weak tax administration, corruption and lack of political will to take action against of shadow economy mafia.
Leader of the delegation Chaudhary Ghulam Mujtaba said the size of unregulated economy was not the single issue Pakistan was currently dealing with. He said black economy, smuggled and counterfeit products are now snatching a bigger market slice from the organised sector, besides fostering further growth in illicit trade at the expense of consumers and industry.
He said this is in addition to the government forfeiting large revenues through uncollected taxes that could have been used to build economic and social infrastructure to boost productivity, generate employment opportunities and create surplus for exports.
He said it is, indeed hard to document every unregulated sector, however many informal micro and small businesses linked to organised sectors will always exist and continue to indirectly contribute to economic growth, therefore they need not to regulated vigorously but unchecked smuggling and illicit trade must be curbed without any further delay to strengthen the national economy, he concluded.