LAHORE: Former federal finance minister Dr Hafiz A Pasha has revealed that Pakistan’s large-scale manufacturing (LSM) sector shoulders a staggering 60% of the country’s total tax revenue – four times the burden borne by all other sectors combined – pushing the vital industry toward decline instead of growth.
Speaking at the Lahore Chamber of Commerce and Industry (LCCI), Pasha highlighted the glaring tax imbalance, noting that high-potential sectors like agriculture contribute almost nothing despite 1% of landowners controlling 22% of prime farmland. Under IMF pressure, the government expects to collect a mere Rs4 billion from agriculture next year against Rs4,500 billion from manufacturing.
He warned that investment in LSM has plummeted to levels lower than 25 years ago, with depreciating capital stock going unreplaced, choking sustainable expansion. Meanwhile, the non-productive real estate sector attracts the lion’s share of investment while contributing just 0.2% in taxes – 12 times less than industry.
Pasha painted a grim socio-economic picture: 2.1 million unemployed youth, 2.6 million out-of-school children, and a record 22% workforce jobless. Only 6% of bank credit reaches three million small enterprises, with 80% diverted to government borrowing.
LCCI President Faheemur Rehman Saigol blamed poor policies and governance for failing to harness Pakistan’s true economic potential, stressing that manufacturing and exports remain the real backbone of the economy.