Informal sector

Article Type

Article

Description

The article examines the large size of Pakistan’s informal economy, estimated at around 56 percent of GDP, and links its growth to weak governance and complex bureaucratic procedures. Many entrepreneurs, particularly women, choose informal businesses to avoid excessive red tape, licensing requirements, and difficult registration processes. The author argues that a large undocumented economy reduces tax collection and limits effective economic planning. Simplifying regulations and making institutions such as the FBR more transparent and business-friendly could encourage enterprises to become documented. Bringing more businesses into the formal sector could increase tax revenues, support social development, and promote GDP growth. The article concludes that better governance and facilitative policies are essential for reducing the size of Pakistan’s informal economy.

Publication Source

DAWN

Publication Date

3-4-2021

Pages

07

Link to Full Text

Share

COinS