KARACHI: Pakistan’s Finance Minister Muhammad Aurangzeb reaffirmed the government’s commitment to clamp down on the informal sector on Monday, the Finance Division said, citing transparency and a strengthened tax ecosystem as central to the country’s economic recovery. 

Pakistan’s government has cracked down on smuggled items and tightened enforcement in poorly taxed sectors, such as tobacco, in recent months as it pushes ahead with its efforts to maximize tax collection by discouraging the formal sector. Informal sector comprises businesses that operate outside the tax net, avoid registration and as a result, neglect regulatory oversight and violate quality, safety or labor standards. 

Aurangzeb met a delegation from Nestlé Pakistan at the Finance Division, where the two sides discussed the multinational’s efforts to strengthen its operations in the country through localization, portfolio adjustments and efficiency enhancements. 

“Emphasizing the government’s resolve to clamp down on the informal sector, an effort that has already begun yielding visible results in multiple industries, the finance minister noted that improved compliance, transparency and a strengthened tax ecosystem are central to Pakistan’s economic recovery,” the Finance Division said in a statement. 

Nestlé Pakistan Chief Executive Officer Jason Avancena provided an overview of the organization’s operations, claiming it had strengthened them through localization, portfolio adjustments, advanced automation, efficiency enhancements and continued innovation across product categories. 

Avancena said Nestlé is implementing solar and biomass energy systems, digital dashboards, environmentally improved packaging, and supply-chain automation in Pakistan. The delegation highlighted that Nestlé’s localization efforts have materially strengthened its resilience. 

“They noted that through sustained efforts to localize raw materials and reconfigure product portfolios, Nestlé Pakistan has reduced its import volumes by nearly half over the past three years from around $150 million to approximately $76–80 million, thereby minimizing exposure to foreign-exchange pressures and deepening integration with Pakistan’s agricultural and manufacturing base,” the Finance Division said. 

Aurangzeb commended the multinational for its efforts and underscored the government’s intention to facilitate greater formalization and enhanced tax equity across the food and beverages sector. He noted that informal players have “rapidly expanded” their market share by operating outside the tax net in sectors such as food and beverages. 

The delegation also discussed export performance, including the company’s presence in markets such as the United States, Canada, the Gulf, and the United Kingdom, sharing insights into challenges related to regional trade, particularly the Afghanistan corridor. 

Aurangzeb advised Nestlé to explore logistics partnerships to expand access to Central Asian markets, reiterating that Islamabad remains committed to enabling export-oriented industry growth.