Pakistan faces economic hurdles due to regulatory and tax complexity

Economic prosperity depends on the ability of entrepreneurs to establish and sustain businesses within an enabling environment. Countries that successfully reduce poverty often do so by fostering private enterprise through predictable and transparent governance.

Pakistan currently ranks 108 out of 190 economies in ease of doing business. The country faces challenges such as regulatory uncertainty, which drives domestic businesses to invest in real estate or move capital abroad rather than expanding productive manufacturing industries.

Taxation remains a significant barrier, characterized by a complicated regime involving multiple authorities, frequent policy changes, and delayed refund mechanisms. These complexities often incentivize informality, particularly among small and medium enterprises (SMEs) that lack the administrative capacity to navigate the system.