Factories operating in tribal areas are involved in smuggling
TARIQ KHATTAK
ISLAMABAD: Prominent business leader and former president of the Islamabad Chamber of Commerce, Shahid Rasheed Butt, said the risk of a mini-budget is increasing due to the failure to achieve tax collection targets, while the real challenges facing the economy are tax evasion and smuggling, which require decisive action. He said the continuous increase in tax rates is encouraging tax evasion, making fundamental policy changes essential.
In a statement issued here, Shahid Rasheed Butt has said that during the first half of the current fiscal year, a shortfall of Rs 331 billion was recorded against the tax collection target. On the other hand, smuggling is causing annual losses of more than Rs1 trillion. He alleged that in the former tribal areas, people from Punjab and Sindh have set up factories producing ghee, steel, and other goods, where records of tax evasion and smuggling are being broken, preventing the government from meeting its targets.
According to Shahid Rasheed Butt, the undocumented economy has become the biggest obstacle to economic recovery. Smuggling of property, illegal cigarettes, tires, oil, medicines, tea, and other goods is inflicting heavy losses on the national exchequer.
He warned that if the current situation persists, the government will have no option but to introduce a mini-budget, the burden of which will fall on the general public. He said the solution lies not in imposing new taxes but in curbing tax evasion and bringing the undocumented sectors within the legal framework. Without taking serious measures against smuggling, achieving tax targets will be impossible.
He also stressed that weak enforcement and a lack of coordination among tax, customs, and law enforcement agencies are allowing illicit networks to operate with impunity. Unchecked smuggling is hurting documented businesses, leading to closures, job losses, and unfair competition in formal markets. Shahid Rasheed Butt urged the government to prioritize enforcement to stabilize revenues and protect consumers from further fiscal shocks.
Leave a Reply