In addition, the government focused heavily on encouraging entrepreneurship, particularly by SMEs, to improve the economic value and job creation in the tourism industry.

The progress made as yet can be seen in the Doing Business Report 2020 by the World Bank, where Pakistan rose 28 places to a rank of 108 from 136.^[45] By introducing six significant reforms, Pakistan entered among the top 10 improvers of the business climate in the world^[46] and became the top reformer in South Asia.^[47]

For starting a business, Pakistan climbed to a rank of 72 from 130^[48] by increasing the functions of the online one-stop-shop, which reduced by half,^[49] the number of procedures needed for setting up a business. Moreover, the registration fee of the labour department in Lahore was eliminated.^[50] These changes led to a sizeable reduction in time and cost needed to start a business.

The previous government made the process of approval to acquire construction permits easier and faster. The time needed to gain permission went down from eight months to two months for Lahore and three months for Karachi. The reduction in time and cost required for dealing with construction permits pushed Pakistan upwards from a rank of 166 to 112 in 2020.^[51]

The payment of taxes was also made easier by enabling online payment of value-added and corporate income taxes. In addition, the government lowered the corporate income tax rate from 49% to 30% in 2018 and 29% in 2019.^[52] Furthermore, the reform allowed for the number of payments to be reduced to 34 from 47 and for the total number of hours needed to fulfil tax requirements each year to be reduced to 283 from 294.^[53] As a result, Pakistan improved its ranking in paying taxes from 173 to 161 in 2020.^[54]

The government also introduced reforms to make it easier to get electricity, register property, and carry out trade across borders through electronic means and cost-effective processes,^[55] thereby creating more favorable conditions for the establishment of businesses.

The Covid-19 travel restrictions reduced business spending in Pakistan to 7% in 2020 from 10% in 2019, but now the business sector is making a strong recovery.

In 2021, the country’s e-banking transactions grew to an estimated $500bn (surpassing Pakistan’s GDP).^{[56] [57]} The State Bank of Pakistan has launched digital banks to allow customers easier access to financial services. The central bank has also launched Raast, which “is Pakistan’s first instant payment system that enables end-to-end digital payments among individuals, businesses and government entities instantaneously”. Furthermore, the e-commerce sector in Pakistan took a great leap forward when the country was added to Amazon’s seller’s list in 2021, opening vast opportunities for Pakistani entrepreneurs.^[58]

The country’s start-up community is also playing its part in enhancing the business environment of Pakistan. In the first half of 2022, Pakistan has raked a total of $284.89 million in start-ups. Investment in this period is 182% which is higher than the first half of the last year.^[59]

The current $4bn e-commerce trade is expected to increase to $7.5bn by 2022 and to a whopping $9bn by 2023. The previous government had announced a zero-tax rate for freelancers in the IT sector and guaranteed all kinds of facilitation to young entrepreneurs.^[60]

Looking at the current scenario, Pakistan is on its way to entering the top 100 economies from the perspective of ease of doing business, which will lead to positive developments in its tourism sector.