According to a study, Pakistan’s shadow economy accounts for 40% of GDP

According to a research on tax evasion in five industries, including tea, tobacco, tyres and auto lubricants, medicines, and real estate, the country’s shadow economy accounts for nearly 40% of GDP and 6 percent of GDP is stolen every year.

According to a study conducted by IPSOS, a global leader in market research, 6 percent of GDP is stolen, a large sum of money that could be used to enhance people’s living standards by developing Pakistan’s economy on a strong foundation.

It claims that tax evasion in these five sectors totals roughly Rs310 billion per year, with Rs35 billion from the illicit tea trade, Rs80 billion from tobacco, Rs90 billion from tyres and lubricants, Rs45 billion from medicines, and Rs60 billion from the real estate industry.

Similarly, according to a research published by a group of Harvard economists and senior commerce ministry officials, the top dozen commodities smuggled into the country generate $3.3 billion per year.

“A staggering 74pc of cell phones sold in Pakistan were smuggled into the country. When it came to vehicles, 53pc of diesel, 43pc of engine oil, 40pc of tyres, and 16pc of auto parts sold in the country were smuggled,” the report reveals, adding that 20pc of cigarettes in Pakistan were smuggled, as was 23pc of tea. Surprisingly, law enforcement and regulatory bodies in the country are only able to seize 5pc of the goods smuggled into Pakistan.