Ayesha Saba

The government’s role in regulating markets has been widely criticized, as historically, heavy-handed regulations, policy inconsistency, and a focus on short-term revenues have hindered business activity, discouraged investment and stifled long-term progress.

Speaking to WealthPK, Abdul Khaliq, Trade Adviser at the Ministry of Commerce, said that the current regulatory framework was overly rigid, creating unnecessary barriers for businesses. He explained that while some level of oversight is necessary to ensure fair competition and consumer protection, excessive regulation often leads to inefficiency and corruption. “Pakistan’s regulatory institutions need to prioritise facilitation over control,” he emphasised.

According to him, a shift towards a facilitative role would encourage entrepreneurship, attract foreign direct investment and promote innovation – the key drivers of sustainable growth. “Currently, Pakistan’s tax policies are seen as overly complex and burdensome, particularly for small and medium enterprises,” Khaliq said. He added that tax policies should incentivise compliance rather than penalise businesses. “Simplified tax structures, coupled with reduced rates, could significantly broaden the tax base and boost government revenues in the long run.

Additionally, clear and consistent policies would provide businesses with the predictability they need to plan and grow.” The ministry of commerce’s trade adviser said another critical aspect is the government’s role in addressing market distortions caused by monopolies and cartels. He emphasised that Pakistan's framework for competition regulation was still in a developmental phase.  He said that the Competition Commission of Pakistan (CCP) should focus more on empowering businesses to compete fairly.

“While the CCP has achieved notable progress in promoting fair competition and curbing monopolistic practices, it operates within certain constraints. These include limited resources and a restricted scope of authority, which hinder its effectiveness in overseeing all aspects of market competition.” Khaliq suggested that the government should strengthen the CCP by increasing its funding and resources, enabling it to perform its duties more comprehensively. Additionally, he advocated extending the CCP’s jurisdiction to include oversight of state-owned enterprises and regulatory bodies, which are currently outside its purview. 

He said that the regulatory environment must also adapt to global economic shifts. “With the rise of e-commerce and digital trade, Pakistan lags behind in creating an enabling environment for technology-driven businesses.” The commerce ministry official recommended implementing policies that support digital payment systems, data protection, and the growth of startups in the tech sector. “By doing so, the government could tap into the vast potential of the digital economy.”

Credit: INP-WealthPk