Pakistan’s circular debt is said to have significantly expanded during the Pakistan Democratic Movement’s (PDM) rule, ARY News reported. The PDM administration’s debt in a single year notably exceeded the debt incurred under Pakistan Tehreek-e-Insaf’s (PTI’s) four-year term. During the one-year PDM administration, the circular debt of gas increased by (PKR) 461 billion, but during the 1.7-year PTI administration, it increased by (PKR) 407 billion. Moreover, the circular debt of Pakistan reportedly witnessed a substantial surge in the Pakistan Democratic Movement (PDM) tenure, according to ARY News.
According to sources, the gas industry’s circular debt has grown by (PKR) 940 billion over the past three years. At the conclusion of the PTI administration, the circular debt stood at (PKR) 1.551 trillion; during the PDM period, it surged to (PKR) 2.084 trillion. It is important to note that Pakistan is not collecting as much tax as it might be, according to the World Bank (WB). The World Bank stated in its research that Pakistan is not collecting almost (PKR) 737 billion in taxes, and it called on Islamabad to eliminate all tax breaks in order to alleviate the country’s debt load, ARY News reported.
The World Bank has recommended that Pakistan raise tax revenues from retail, real estate, and agriculture in order to raise more money. The majority of the untaxed wealth was concentrated in two significant areas under provincial jurisdiction: real estate and agriculture. According to the survey, the real estate industry in Pakistan is likewise paying more taxes than it is able to. The bank also suggested that Pakistan ensure progressively in streamlining its income tax system and harmonising it for both paid and non-salaried citizens, ARY News reported.
Moreover, as the country grapples with an economic slump, the number of unemployed people in Pakistan is projected to reach 5.6 million this year, an increase of 1.5 million since 2021, according to Dawn. Coupled with the devastating floods of 2022 and the currently unfolding financial crisis, Pakistan’s economy is experiencing negative growth and inflationary pressures that enterprises and households are finding increasingly difficult to withstand. Pakistan’s total debt and liabilities have risen by 29 per cent to Rs 56.21 trillion in the fiscal year that ended on June 30, the country’s central bank said on Wednesday. This comes as the government borrowed heavily to finance its spending requirements, as per Dawn.