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Business Recorder
3 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
Export-oriented sectors on the brink, PRGMEA tells PM
LAHORE: Pakistan's $11 billion value-added export-oriented industry —contributing nearly one-third of the country's total exports — has issued a strong SOS appeal to Prime Minister Shehbaz Sharif, warning that recent budgetary measures are set to derail the export-oriented sectors at a critical time. In a joint statement, Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), in collaboration with the top export-oriented associations including PHMA, SIMAP, PSGMEA, PGMEA, PLGMEA, PCSUMEA and Sialkot Chamber of Commerce, demanded the immediate revival of the Final Tax Regime (FTR) and restoration of the Export Facilitation Scheme (EFS) to its original structure. The appeal was endorsed by industry stalwarts including PRGMEA Chairman Dr Muhammad Ayyaz Uddin and former Central Chairman Sohail A Sheikh, Sialkot Chamber of Commerce and Industry (SCCI) President Ikram ul Haq, PSGMEA Chairman Khawaja Masud Akhtar — whose company's footballs are used in FIFA World Cup tournaments — SIMAP Chairman Zeeshan Tariq, PLGMEA Chairman Syed Ahtisham Mazhar, PHMA Chairman Abdul Hameed and former chairman Khawaja Mushraf, PGMEA Chairman Annas Raheel Barlas, PCSUMEA Chairman Muhammad Jamal Bhutta, Majid Bhutta, Ansar Aziz Puri, Sheikh Luqman Amin and other prominent exporters and business leaders. They expressed deep concern that despite government slogan of 'export-led growth,' the reality on the ground is entirely opposite. The Government always talks about promoting exports, but in practice, no department seems to be on board. They pointed out that in the entire budget speech, the finance minister uttered the word 'export' only once — and that too in a negative context while imposing duties on imported yarn under EFS. Addressing the Prime Minister directly, the joint statement said: 'Honourable Prime Minister, we urge you to intervene immediately. Please convene an emergent meeting with the leading export associations and the Sialkot Chamber before this budget is passed. If this situation persists, Pakistan's most reliable foreign exchange earning sector will suffer irreparable damage.' They stressed that in such a policy environment, the government's vision 'URAAN PAKISTAN' of taking exports to $100 billion is simply not possible. The industry leaders were clear: 'We're not asking subsidies, exemptions, or special treatment—just a level playing field to compete globally. Unfortunately, the current policies have drastically raised the cost of doing business and severely impacted ease of doing business. Work must begin on a war footing to restore confidence and streamline processes. International buyers are actively seeking long-term clarity and stability in the EFS framework, as Pakistan stands at a strategic moment to attract business being diverted from China. This opportunity must not be missed. They said the abolition of FTR and the breakdown of EFS have created chaos in the industry. The Final Tax Regime, which once offered a simple and predictable tax mechanism, has now been replaced by complex procedures, audits, and refund hurdles, particularly hurting small and medium (SMEs) exporters. Meanwhile, the EFS—once a vital mechanism for importing essential raw materials not produced locally, or required by buyers to use their nominated suppliers to meet international quality standards, such as specialized materials and technical fabrics — has been bogged down by unnecessary conditions, limiting access to critical inputs and undermining export competitiveness. Business leaders emphasize that it is time for Pakistan to strategically move beyond cotton and adopt a more diversified, innovation-driven approach to value-added apparel exports. Copyright Business Recorder, 2025
Express Tribune
3 days ago
- Business
- Express Tribune
PM asked to save value-added sector
A man selects a dress for his child at a shop in the Saddar area of Karachi. Tailors claim they are losing business to readymade garments manufacturers. Photo: Jalal Qureshi/Express Listen to article Pakistan's $11 billion export-oriented value-added industry, which contributes nearly one-third of total exports, has issued a strong SOS appeal to Prime Minister Shehbaz Sharif, saying that recent budgetary measures are set to derail export-focused sectors at a critical time. In a joint statement, Pakistan Readymade Garments Manufacturers and Exporters Association, Pakistan Hosiery Manufacturers Association, the Surgical Instruments Manufacturers Association, Sialkot Chamber of Commerce and others demanded the immediate revival of the Final Tax Regime and restoration of the Export Facilitation Scheme (EFS) in its original structure. They expressed concern that despite the government's slogan of export-led growth, the reality on the ground was entirely the opposite. "The government always talks about promoting exports, but in practice, no department seems to be on board." They pointed out that in the budget speech, the finance minister uttered the word "export" only once and that too in a negative context in order to impose duty on imported yarn under the EFS. Addressing the prime minister, the joint statement said, "We urge you to intervene immediately and convene an emergency meeting with leading export associations before this budget is passed. If this situation persists, Pakistan's most reliable foreign exchange earning sector will suffer irreparable damage." In such a policy environment, they cautioned, the government's vision of taking exports to $100 billion under Uraan Pakistan was simply not possible. Industry leaders categorically said that they were not asking for subsidies, exemptions or special treatment, but just wanted a level playing field to compete globally. International buyers are actively seeking long-term clarity and stability in the EFS framework as Pakistan has a chance to attract businesses being diverted from China. The Final Tax Regime has been replaced by complex procedures, audits and refund hurdles.
Business Recorder
3 days ago
- Business
- Business Recorder
Pakistan's exporters urge PM to save value-added industry, seek FTR removal, EFS restoration
Pakistan's $11 billion value-added export-oriented industry—contributing nearly one-third of the country's total exports—has issued a strong SOS appeal to Prime Minister Shehbaz Sharif, warning that recent budgetary measures are set to derail the export-oriented sectors at a critical time. In a joint statement, Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), in collaboration with the top export-oriented associations including PHMA, SIMAP, PSGMEA, PGMEA, PLGMEA, PCSUMEA and Sialkot Chamber of Commerce and Industry (SCCI), demanded the immediate revival of the Final Tax Regime (FTR) and restoration of the Export Facilitation Scheme (EFS) to its original structure. The appeal was endorsed by industry stalwarts including PRGMEA Chairman Dr Muhammad Ayyaz Uddin and former Central Chairman Sohail A. Sheikh, Sialkot Chamber of Commerce and Industry (SCCI) President Ikram ul Haq, PSGMEA Chairman Khawaja Masud Akhtar—whose company's footballs are used in FIFA World Cup tournaments — SIMAP Chairman Zeeshan Tariq, PLGMEA Chairman Syed Ahtisham Mazhar, PHMA Chairman Abdul Hameed and former chairman Khawaja Mushraf, PGMEA Chairman Annas Raheel Barlas, PCSUMEA Chairman Muhammad Jamal Bhutta, Majid Bhutta, Ansar Aziz Puri, Sheikh Luqman Amin and other prominent exporters and business leaders. The associations expressed deep concern that despite the government's slogan of 'export-led growth,' the reality on the ground is opposite. They pointed out that in the entire budget speech, the finance minister uttered the word 'export' only once, and that too in a negative context while imposing duties on imported yarn under EFS. Addressing the prime minister, the association urged the premier to convene an emergency meeting with the leading export associations and the SCCI before the budget is passed. 'If this situation persists, Pakistan's most reliable foreign exchange-earning sector will suffer irreparable damage.' They stressed that in such a policy environment, the government's vision of taking the country's exports to $100 billion is 'simply not possible'. 'We're not asking subsidies, exemptions, or special treatment—just a level playing field to compete globally. Unfortunately, the current policies have drastically raised the cost of doing business and severely impacted the ease of doing business,' the export associations stated. They said that international buyers are actively seeking long-term clarity and stability in the EFS framework, as Pakistan stands at a strategic moment to attract business being diverted from China. The exporters further said that the abolition of FTR and the breakdown of EFS have created chaos in the industry. 'The FTR, which once offered a simple and predictable tax mechanism, has now been replaced by complex procedures, audits, and refund hurdles, particularly hurting small and medium-sized (SMEs) exporters. 'Meanwhile, the EFS has been bogged down by unnecessary conditions, limiting access to critical inputs and undermining export competitiveness. Business leaders emphasise that it is time for Pakistan to strategically move beyond cotton and adopt a more diversified, innovation-driven approach to value-added apparel exports,' it added.
Business Recorder
6 days ago
- Business
- Business Recorder
Federal budget bereft of pro-business, pro-industry measures: FCCI president
FAISALABAD: Chambers of Commerce & Industry (CCI) and trade associations across the country have expressed reservations about the federal budget 2025-26. SCCI organized a Press Conference in which business leaders including Rehan Naseem Bharara, President Faisalabad Chamber of Commerce & Industry (FCCI) participated through online. He termed the federal budget as an important document for the safety, solidarity and progress of Pakistan in addition to the revival of the economy. He lamented that no tangible pro-business and industry step has been proposed despite verbal assurances by the Government. He said that detailed discussion was held with the Prime Minister about the Final Tax Regime (FTR) for exporters but his assurances have also been ignored. 'Similar treatment is being meted out with the demand of exporters for the restoration of the original Export Facilitation Scheme (EFS)', he said and added that we intend to generate economic activity and enhance exports through efficient circulation of capital. He feared that the domestic industry would also become problematic if the current situation continued. He said that we were requested by the high ups to remain silent as the Government was actively considering cutting down the electricity rate to 9cent within the next two months. He said that four months have passed but exporters are not getting electricity at the regionally competitive rates. He condemned the blanket powers entrusted to the tax collectors under section 37-AA of Sale Tax Act 1990 to arrest the CEOs, Chief Financial Officers, Directors and other Company Officers and said that these powers would promote harassment, blackmailing and corruption in the FBR. He termed the business community as patriotic, adding that they are paying Rs. 1400bn towards the tax recoveries. He said that petrol levy would also be enhanced to add additional burden on the poor segments of the society. He said that no step has been taken to eliminate the non-filer category. He said that businessmen are not holding dual nationality and they would never leave Pakistan in any case. 'We would get electricity at 9cent and also play our proactive role in achieving the export target of $60bn under Uraan Pakistan program', he said and added that Finance Minister has rightly said that industrial sector is meant to generate new job opportunities but the Government was also bound to provide conducive climate to achieve this objective. He said that our businessmen are most resilient and they could achieve the target of Uraan Pakistan within three years instead of five years if favourable and pro-business conditions were provided. About the tax Anomaly Committee, Rehan Bharara said that we would identify collective issues which would be taken up with the Government. Later a joint communiqué was issued warning the Government that 'no export week' would be launched from June 20 if their genuine demands were not fulfilled. Senior Vice President Qaisar Shams Gucha, Vice President Shahid Mumtaz Bajwa and Bao Muhammad Akram Chairman APTPMA were also present during this online press conference. Copyright Business Recorder, 2025
