In Pakistan, managing the unofficial economy presents a multitude of complicated issues. The lack of documentation and absence of adequate record-keeping constitutes one of the key obstacles.
This makes it hard for the government to maintain track of business activity, tax commercial enterprises fully, or enforce tax legislation. The inability of informal employees and enterprises to access conventional financial services commonly limits their capacity to expand operations, make profitable ones, and accumulate savings.
According to the Labor Force Survey 2020–21, the informal sector makes up 72.5 percent of major jobs in the non–agricultural sector.
More people work in the informal sector in rural areas (76.2 percent) than in urban areas (68.5 percent). Therefore, when one takes into account 43.5 percent of all employment, the informal (non-agricultural) sector is the largest contributor. Read Full Op-Ed
