Finance minister warns of businesses exiting Pakistan amid rising costs

Muhammad Aurangzeb, the finance minister of Pakistan has claimed that businesses are exiting Pakistan due to increased taxes, high energy costs and rising financing expenses. He stated that the government is fully aware of this situation.

Speaking in Islamabad, at the PPD on Wednesday, Aurangzeb talked about how challenging the operations have become for firms in Pakistan. He highlighted the increased taxes and energy prices as “real problems for businesses.” Furthermore, he said that the government has introduced reforms to stabilize the economy.

Meanwhile, he also mentioned that around 20 new foreign investors have entered the Pakistani market over the past 18 months. This reflects continued international interest for investment options in Pakistan, despite the hurdles. 

Companies such as Google, Aramco, Wafi Energy and Turkish Petroleum are some of the names that have invested in Pakistan.

Aurangzeb also pointed out that differences in business models may be why some multinational firms choose to stay while others leave. 

Moreover, he said that some companies have shifted to local sourcing and have managed to protect their profit margins, some of them have even begun exporting from Pakistan, “those firms are able to stay,” he said. 

Change of strategy is what needs to be done to be able to make a business survive in rapidly changing economic circumstances, he claimed.

Aurangzeb also mentioned that Pakistan’s economy is going through structural reforms, particularly in FBR. He emphasized that stronger compliance and enforcement are essential to ensure implementation of tax laws for long-term economic stability.