Pakistan loses Rs5trn annually due to underutilised ports, tax evasion, and trade malpractices: report

Despite its geo-strategic advantages, Pakistan has yet to fully capitalize on its maritime potential, with none of its ports ranking among the world’s top 60. The country incurs an annual loss of nearly Rs5 trillion ($18 billion) in the maritime sector due to underutilized ports, tax evasion, trade malpractices, and ineffective policies, The News reported, citing a high-level task force report submitted to the prime minister.

According to the report, Karachi Port Trust (KPT) is currently ranked 61st, while Port Qasim Authority (PQA) stands at 146th globally. The report outlines key revenue losses, including Rs3.19 trillion from inefficient port usage, Rs1.12 trillion due to tax evasion, and Rs313 billion lost through fake billing and trade fraud. 

Additionally, restrictions on transshipment cost Rs70 billion, lack of warehousing and value addition leads to Rs196 billion in losses, while misuse of the Afghan Transit Trade results in an annual shortfall of Rs60 billion.

KPT, the country’s busiest port, operates at just 47% of its 125 million-ton capacity, handling over 60% of Pakistan’s imports and exports. Over the past five years, tax collections at KPT have ranged between Rs660 billion and Rs1,470 billion. 

Demand for port services has grown at an annual rate of 3.3% over the past decade, yet capacity remains significantly underutilised. 

Similarly, PQA, responsible for 35% of national cargo, utilises only 50% of its 89 million-ton capacity, with tax revenue between Rs690 billion and Rs1,140 billion over the same period. 

Meanwhile, Gwadar Port, with a current capacity of 2.5 million tons, is expected to expand to 400 million tons by 2045 under its third-phase development plan.

The report underscores Pakistan’s potential to leverage its 1,050-km coastline as a major economic asset. The ongoing Red Sea crisis, which has disrupted global shipping routes, presents an opportunity for Pakistan to position itself as a key alternative. Major global port operators such as Maersk, DP World, and Hutchison Ports have already expressed interest in investing in Pakistan’s maritime infrastructure.

Pakistan’s exclusive economic zone, covering over 240,000 square kilometres and recognised by the United Nations, is also identified as an untapped resource. The task force calls for urgent reforms, including policy improvements, infrastructure development, and better trade regulations to curb losses and strengthen Pakistan’s position in global maritime trade.