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Business Recorder
12 hours ago
- Business
- Business Recorder
Tax officials' new powers: FPCCI mulling moving the court
KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has unequivocally rejected the new powers granted to tax officials in the recently announced Federal Budget, branding them as 'excessive, overly-subjective, and harassment-prone.' During a press conference in Karachi, FPCCI leadership announced their intention to challenge these authorities in superior courts, specifically those enabling taxmen to withdraw funds from business accounts and conduct raids on business premises without prior notice. The FPCCI leadership urged the federal government to withdraw these stringent measures before the budget's final passage from parliament to restore confidence within the business community. FPCCI President Atif Ikram Sheikh emphasized that tax collection targets can only be met if industrialists and exporters are actively engaged through a comprehensive consultative process. He lamented that the budget largely overlooks the necessary steps to empower the business community to realize the Prime Minister's vision for export-led growth. Sheikh further elaborated on a globally established principle: increased intervention or interaction by tax collectors with taxpayers tends to undermine fairness, transparency, and impartiality, as heightened human-to-human interactions and subjective human judgments become a source of nuisance. Saquib Fayyaz Magoon, Senior Vice President of FPCCI, demanded the restoration of the Fixed Tax Regime (FTR) for exporters in its original form and for a long-term duration. This, he argued, is crucial for bringing clarity, certainty, and consistency to taxation policies, thereby attracting both Foreign Direct Investment (FDI) and domestic investment by ensuring Pakistan remains competitive as a country. Magoon also highlighted the necessity of broadening the Export Facilitation Scheme (EFS) to include local manufacturers, warning that without such inclusion, Pakistani products would face supply line disruptions and a lack of competitiveness in regional and international markets. He further expressed resentment that the FPCCI's recommendations for special incentive packages for the high-growth Information Technology, mines & minerals, and fishing industries were disregarded in the Federal Budget. FPCCI Vice President Asif Sakhi urged tax authorities to cease accusing the business community of tax evasion or theft. Instead, he called for a transformation of the tax machinery into a facilitative body that engages with taxpayers through amicable and respectful behaviour. During the press conference, FPCCI Vice President Aman Paracha proposed the formation of a high-powered fact-finding committee to ascertain the root cause of the FBR's inability to achieve the tax collection target for fiscal year 2025. Vice President Nasir Khan highlighted a concerning trend, stating that many businessmen have already relocated to more lucrative and stable investment, trade, and industrial destinations, while those remaining are struggling to operate their factories without incurring losses. Another concern raised by the FPCCI was the restriction imposed on Special Economic Zones (SEZs) developers for a period of 10 years or until tax year 2035, whichever comes first. Copyright Business Recorder, 2025
Business Recorder
2 days ago
- Business
- Business Recorder
FPCCI rejects law allowing businessmen's arrest
LAHORE: The Federation of Pakistan Chambers of Commerce & Industry (FPCCI) has vehemently opposed the recently enacted law permitting the arrest of business community members, terming it entirely unacceptable. FPCCI President Atif Ikram Sheikh, alongside Patron-in-Chief of the United Business Group (UBG) S.M. Tanveer, FPCCI Vice Presidents Zaki Aijaz and Tariq Jadoon, and other prominent business leaders, expressed their strong reservations during a press conference held at the FPCCI Regional Office in Lahore. The business leaders announced their decision to halt all industrial operations and symbolically hand over factory keys to the government, challenging it to manage the industries itself. Criticizing the introduction of Section 37AA, they declared that if the government intended to arrest businessmen, they could no longer continue running their factories. While reaffirming their willingness to cooperate with the government, they emphasized that the business community has always supported national revenue objectives but would not tolerate any form of harassment. The leaders reiterated their longstanding demand to reduce electricity tariffs to 9 cents per unit, pointing out that despite a decline in the Consumer Price Index (CPI), interest rates remain unjustifiably high. They also condemned the imposition of an 18% sales tax on solar energy solutions, labelling it an unreasonable measure. Additionally, they called for the immediate reinstatement of the Final Tax Regime (FTR) and the complete restoration of the Export Facilitation Scheme (EFS) in its original form. FPCCI President Atif Ikram Sheikh stated, 'We are fighting for the rights of the business community. Until all policy anomalies are resolved, we stand in full solidarity with all trade bodies.' He further revealed that a meeting with the Prime Minister of Pakistan would soon be arranged to seek resolution on these critical issues. The business community has given the government a seven-day ultimatum to address their concerns. To formalize negotiations, an eight-member committee has been formed under the leadership of FPCCI President Atif Ikram Sheikh. The committee includes FPCCI Vice President Zaki Aijaz, former FPCCI President Zubair Tufail, Chairman of the FPCCI Policy Advisory Board Mian Zahid Hussain, Sialkot Chamber President Ikram-ul-Haq, former Faisalabad Chamber President Dr. Khurram Tariq, FPCCI Executive Committee Member Momin Ali Malik, and Khyber Pakhtunkhwa representative Fahad Ishaq. The committee will engage with the government to seek immediate redressal of the business community's grievances. The FPCCI's strong stance underscores the growing frustration within Pakistan's business sector over policies perceived as detrimental to industrial growth and economic stability. The coming days will be crucial in determining whether the government and business leaders can reach a consensus to avert further disruptions. Meanwhile, the FPCCI's Businessmen Panel (BMP) has said that the entire business community of Pakistan, including all major chambers of commerce and industry as well as trade associations across the country, has unanimously rejected the recently introduced Section 37AA of the Sales Tax Act, terming it a draconian and unconstitutional law that grants sweeping arrest powers to the Federal Board of Revenue (FBR). BMP Chairman and FPCCI former president Mian Anjum Nisar said that businessmen strongly condemned the provision, warning that such an oppressive step has not been witnessed even during the colonial British era. Addressing a trade delegation of trade and industrial representatives here, he said that representatives from the Lahore Chamber of Commerce and Industry, Karachi Chamber, Islamabad Chamber, Rawalpindi Chamber, Faisalabad Chamber, Sialkot, Quetta, and Peshawar Chambers, along with numerous sectoral trade and industrial bodies, have called for the immediate withdrawal of Section 37AA. The entire private sector stands united in opposition, declaring that the FBR's move to criminalize business activities on mere suspicion of tax evasion is unacceptable and will not be tolerated. He said that the Businessmen Panel (BMP), representing the country's largest and most credible platform of industrialists, exporters, and traders, has pledged to stand firm with all chambers and trade bodies in this cause. The BMP has warned that this issue will not fade away until the unjust law is removed and meaningful engagement begins. The government must decide whether it wants to build the economy with the private sector—or break it under the weight of fear and authoritarianism. Anjum Nisar said that the business community fears that this new law, which gives tax officers' unchecked authority to arrest any businessman without court permission, based solely on suspicion, will cause irreparable harm to Pakistan's fragile economy while FBR has no good record in this regard. He argued that such laws destroy investor confidence, discourage industrial activity, and trigger capital flight at a time when the country is already facing serious economic challenges. He stressed that laws like Section 37AA violate the Constitution of Pakistan, particularly Article 10A, which ensures the right to a fair trial and due process. He said businessmen from across Pakistan have questioned how arrests without proof or trial can be justified in a democratic society. The mere allegation of underreporting or a suspected tax shortfall should not be sufficient grounds for arresting businessman. Legal experts and constitutional scholars have echoed these concerns, pointing out that FBR officers are being handed police-like powers without any judicial oversight or accountability mechanisms, opening the door to potential abuse, corruption, and harassment. The business community has demanded that tax collection and compliance remain a civil matter, not a criminal one. Turning tax disputes into criminal offenses sends a negative message to local and foreign investors, who are already hesitant to operate in Pakistan due to inconsistent policies and high costs of doing business. Entrepreneurs warn that such a hostile regulatory environment will drive many businesses into the undocumented economy, reduce tax collection instead of increasing it, and severely damage export potential and job creation. Trade and industry bodies have also noted that this law will lead to a culture of fear and uncertainty in the market. Businesses are already struggling with rising electricity and gas tariffs, volatile exchange rates, excessive taxation, and declining demand. Adding the threat of arrest by tax authorities will only push more people out of formal business activity and erode trust between the government and the private sector. He warned that FBR's earlier coercive actions, such as freezing accounts and sealing premises, were counterproductive. Now, granting arrest powers without trial has crossed all limits. He condemned the law as a dangerous attempt to control the business community through intimidation rather than policy reform. He also voiced strong objections, declaring it an anti-business and unconstitutional measure that would never be accepted. Anjum Nisar demanded that the government take immediate notice of this matter and revoke Section 37AA. Instead of threatening legitimate taxpayers, the FBR should focus on broadening the tax base, simplifying tax procedures, and encouraging voluntary compliance through dialogue and reforms. Arrests and coercive measures have never delivered results in the past and will not work now. Sustainable tax collection can only be achieved through trust, transparency, and facilitation—not fear and force. If this law is not withdrawn, the private sector has warned that it may resort to nationwide protests, shutter-down strikes, and legal action. The business community will not accept any law that treats entrepreneurs and job creators like criminals. The collective voice of Pakistan's chambers and trade associations must not be ignored. Their message is clear: arrest powers have no place in tax enforcement, and the law must be repealed to restore sanity and balance in economic policymaking. The business community wants reform, not repression. They stand ready to cooperate with the government in tax compliance but will resist any attempt to criminalize entrepreneurship. Copyright Business Recorder, 2025
Business Recorder
3 days ago
- Business
- Business Recorder
FPCCI concerned over new taxation steps
KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has voiced serious concerns over the newly introduced taxation measures under the FBR framework, warning that the imbalanced reforms could erode business confidence and pose a threat to the country's economic growth. Aun Ali Syed, Vice President of FPCCI Khyber Pakhtunkhwa (KPK) and Chairman Prosper Pakistan, has expressed grave concerns regarding the recently introduced taxation provisions under the FBR framework, calling them highly detrimental to the business environment and a violation of basic legal and economic principles. 'These amendments grant disproportionate and unchecked powers to tax authorities, potentially undermining the trust, stability, and growth of business ecosystem', he added. He cautioned that such excessive and coercive measures will not contribute to enhanced revenue collection. On the contrary, they are likely to create a hostile and fear-driven environment, encouraging evasion rather than compliance. He emphasised that economic growth and exports are not the sole responsibility of the FBR or a few institutions. 'Nation-building is a shared effort,' he said, stressing the need for trust, cooperation, and transparency between policymakers, administrators, and the business community. He warned that excessive powers granted to tax authorities will not boost revenue but instead hinder growth, creating a climate of mistrust between the FBR and the business community. He stressed that economic progress is a shared responsibility requiring teamwork, trust, and mutual confidence among all stakeholders. Calling for urgent reconsideration and stakeholder dialogue, he said. 'If we truly envision a 'Prosper Pakistan,' we must replace fear with facilitation and enforcement with engagement. Only then can we rise to the dream of a nation soaring towards prosperity, inclusivity, and sustainable growth,' said. He has also outlined a series of clauses in the Finance Bill that, according to him, grant unchecked powers to tax authorities, threaten property rights, and weaken the rule of law, all of which could severely undermine business confidence and investment climate in the country. He pointed out that Section 11E permits tax assessment and recovery based merely on suspicion, without requiring proper investigation or concrete evidence. 'This level of discretion opens the door to misuse, arbitrary action, and harassment of legitimate business operators.' He urged the government to reconsider these provisions, warning that such sweeping powers, without proper checks and balances, could destabilise the business environment, stifle growth, and trigger legal uncertainty. Copyright Business Recorder, 2025
Business Recorder
6 days ago
- Business
- Business Recorder
FPCCI condemns Israeli aggression against Iran
KARACHI: The Federation of Pakistan Chambers of Commerce & Industry (FPCCI) has strongly condemned the Israeli aggression against Iran and expressed deep concern over the martyrdom of Iran's army chief, scientists, and civilians. In a statement, FPCCI Vice President Mohammad Aman Paracha said that first, there was an attack on Pakistan by India, and now Israel's assault on Iran highlights the weakness of the Muslim world. 'Iran is our neighbouring brotherly country, and our historical ties with it are unmatched,' he said. Aman Paracha pointed out that Israel has targeted Iran, Palestine, and Yemen, and warned that if the Muslim world fails to unite and continues to prioritize individual interests, Israel encouraged by the United States will expand its attacks to other Muslim nations as well. He added, 'Israel is committing atrocities against Palestinian children and is complicit in the destruction of Palestine. Its hands are stained with the blood of Palestinians, and now it is shedding the blood of the Iranian people. The people of Pakistan deeply mourn the loss of precious lives due to Israeli attacks.' Paracha stressed the urgent need for visible unity in the Islamic world, saying that all Muslim countries with ties to Israel should sever them immediately. He called for an emergency session of the OIC (Organization of Islamic Cooperation) to formulate a collective strategy to counter Israel's aggression. He further stated that Israel's actions are a blatant violation of the UN Charter and international law, and have shaken the conscience of humanity. These acts pose a serious threat to regional peace and global security, and will severely destabilize the region. Aman Paracha also endorsed Bilawal Bhutto's statement, urging the international community to immediately halt the war in the region. 'If treaties like the Indus Waters Treaty are weakened, regional peace will be at risk,' he added. Finally, he appealed to Prime Minister Shehbaz Sharif to instruct the Pakistani embassy in Iran to facilitate the safe return of Pakistani pilgrims currently in Iran. Copyright Business Recorder, 2025
Business Recorder
07-06-2025
- Business
- Business Recorder
Loans for SMEs: SBP decision to review regulations greeted
KARACHI: Malik Khuda Bakhsh, Chairman of the Energy Standing Committee of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and President of the Pakistan Business Forum (Karachi Region), has welcomed the State Bank of Pakistan's decision to review the regulations for easy funding for small and medium-sized enterprises (SMEs). He stated that this decision will promote sustainable, responsible, and inclusive access to finance for the SME sector. He said that it is too easy to attribute SMEs' resistance to joining the documented economy simply to their reluctance to be part of the tax net. In reality, what is needed is a program that improves and simplifies the regulatory process while focusing on reducing bureaucratic barriers. According to the State Bank of Pakistan, the amendments in the regulations aim at to define a procedure that will help these institutions avoid difficulties in obtaining loans from banks while also providing facilities for loan repayment. Malik Khuda Bakhsh further stated that, despite their immense role in national development, small and medium-sized enterprises (SMEs) have long been neglected. Nearly 80% of jobs in the non-agricultural sector are provided by SMEs, which contribute to 40% of Pakistan's GDP. However, only 6% of loans from private banks are given to this sector, reflecting that despite the vital role these enterprises play, they are not being given the importance they deserve. He went on to say that it is estimated that around 5 million SMEs are operating in Pakistan. This sector plays a key role in the country's development and is not only creating new jobs but also contributing to the growth of national exports. Malik Khuda Bakhsh highlighted that SMEs also play a significant role in Pakistan's external sector, contributing around 25% of total exports. The government has set a target of increasing exports to $60 billion over the next five years, and much of this depends on the potential and growth of SMEs. Copyright Business Recorder, 2025
