Islamabad – Mubashir Akram, Country Director, ACT Alliance Pakistan, has called for stronger, sustained, and better-resourced enforcement against Pakistan’s illegal economy, saying that illegal businesses are inflicting massive damage on the country’s revenue base, lawful markets, and national security.
Akram said Pakistan can no longer afford to treat illegal trade as a peripheral economic issue. He said the Pakistan Business Council’s 2023 report highlighted a staggering estimated loss of $68 billion linked to illegal businesses in Pakistan, adding that the actual scale of damage could be significantly higher when tax evasion, smuggling, under-invoicing, counterfeit products, undocumented cash flows, and market distortion are taken into account.
“Illegal trade is not merely a tax issue. It is an economic security challenge,” said Akram. “When illegal businesses operate openly, they weaken the state, punish compliant businesses, reduce public revenue, and create an unfair market where criminality becomes more profitable than compliance.”
He said that several major sectors of Pakistan’s economy remain vulnerable to illegal activity, including petroleum, real estate, cigarettes, tea, pharmaceuticals, and other high-value consumer and industrial sectors. Among these, he noted, tobacco remains one of the most visible and damaging examples, where non-duty-paid and non-compliant cigarettes continue to undermine tax policy, distort retail markets, and deprive the national exchequer of hundreds of billions of rupees.
“The tobacco sector demonstrates how quickly illegal trade can become normalized when enforcement is not constant,” Akram said. “When illegal cigarettes are available at retail outlets without proper tax compliance, track-and-trace requirements, and legal pricing discipline, the state loses revenue and the lawful economy loses confidence.”
He appreciated recent enforcement actions by the government and the Federal Board of Revenue against illegal trade, but stressed that episodic crackdowns are not enough. “The government deserves appreciation for taking action, but Pakistan needs permanent enforcement, not occasional raids,” he said. “Illegal business mafias understand how to pause, reroute, and return. The state must be more consistent, more coordinated, and more determined.”
Akram urged the government to strengthen the Federal Board of Revenue by increasing personnel, improving technology, expanding field enforcement capacity, and ensuring better coordination among Inland Revenue, Customs, provincial administrations, police, and financial intelligence authorities. He said stronger enforcement would help regulate markets, increase tax collection, improve investor confidence, and reduce the space available to criminal networks.
He also called on academia to study and debate the illegal economy more seriously. “Pakistan’s universities must produce research, public debate, and policy ideas on the illegal economy,” he said. “This is an issue that steals trillions of rupees from the national economy and weakens the future of young Pakistanis.”
Akram called for sustained collaboration between civil society, media, academia, and the government. “No single institution can defeat the illegal economy alone. Civil society must build awareness, the media must maintain scrutiny, academia must generate evidence, and the government must enforce the law. Pakistan’s economic future depends on bringing illegal businesses into the formal economy or shutting them down.”