Research by the World Bank shows that a 10% import duty in Pakistan increases profits from selling domestically relative to exporting by 40% on average

This statement means that when Pakistan imposes a 10% tax (also known as an import duty) on goods coming into the country from abroad, it makes selling products within Pakistan more profitable compared to selling them to other countries (exporting).

Here's how it works:

1. When an import duty is imposed, it makes imported goods more expensive. This is because the businesses that bring these goods into the country have to pay the tax and often pass this cost onto the consumers by increasing the price of the goods.

2. As a result, locally produced goods become relatively cheaper compared to the imported ones. This makes them more attractive to consumers within Pakistan, leading to an increase in domestic sales.

3. The increase in domestic sales leads to higher profits for businesses selling their products within Pakistan. According to the World Bank's research, these profits increase by an average of 40% when a 10% import duty is imposed.

4. However, while businesses are making more profits from domestic sales, they might be less motivated to export their products. This is because selling domestically has become more profitable.

So, in summary, a 10% import duty in Pakistan makes selling products within the country more profitable by an average of 40% compared to exporting them.