A recent report by the Pakistan Business Forum has revealed that the cost of doing business in Pakistan is approximately 34% higher compared to neighboring and regional countries. This significant cost disadvantage is adversely affecting business expansion, investment, and employment generation within the country.
The report identifies several key factors driving up operational costs, including complex and often unreasonable tax policies, high electricity and gas tariffs, and currency instability. These conditions are making it difficult for Pakistani businesses to compete with firms in countries such as India, Bangladesh, and Vietnam.
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Furthermore, the overall tax burden on companies has reportedly reached up to 55% of their income. Coupled with bureaucratic hurdles and compliance requirements, these pressures are stifling growth and profitability.
On a global scale, Pakistan’s revenue across multiple sectors has been declining since 2022. In the current economic climate, recovering and growing revenue has become a major challenge for the business community.
The Forum has urged the government to implement urgent reforms, including rationalizing the tax system, reducing energy costs for industries, and establishing a clear and consistent policy for economic recovery. Economic analysts note that protective commercial policies often limit access to affordable imported inputs, forcing manufacturers to rely on costlier local alternatives, which in turn increases production costs and reduces competitiveness.
