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Proposed sweeping powers for FBR will cripple economy: PBF
LAHORE: Pakistan Business Forum (PBF) has strongly denounced the Federal Budget 2025; calling it a direct assault on the business community and warning that the sweeping powers proposed for the Federal Board of Revenue (FBR) will cripple the economy and trigger widespread unrest if not immediately reversed.
Speaking to the media, Muhammad Naseer Malik, Chairman (Central Punjab) of the PBF, said the Finance Bill introduces a range of unprecedented and undemocratic enforcement clauses that violate the principles of fair taxation and due process. He warned that these proposals will create an environment of fear and intimidation, where businesses operate under constant threat of legal action without the protection of proper checks and balances.
PBF highlighted specific provisions of the Finance Bill 2025 that it says are particularly damaging to business confidence and fundamental rights:
Section 37AA allows for the arrest of individuals without a warrant, solely on the basis of suspicion of tax fraud, paving the way for arbitrary detentions and harassment. Section 14AE empowers FBR officials to seize business premises and property without judicial oversight or meaningful safeguards.
The Section 37B authorizes the detention of businesspersons for up to 14 days, with possible extension by a magistrate, even before the conclusion of an investigation. Further, Section 11E permits FBR to make tax assessments and initiate recovery based purely on suspicion, bypassing the need for a complete inquiry or verifiable evidence.
Section 33 (13 & 13A) introduces 10-year prison terms and Rs10 million fines for vaguely defined 'tax fraud,' which the PBF warns could criminalize genuine business errors or disputes.
Section 32B grants private auditors quasi-legal authority, allowing them to act with powers that blur the line between auditing and prosecution — a move PBF considers both unconstitutional and dangerous.
'These provisions do not promote tax compliance — they institutionalize fear, harassment, and unchecked power,' Malik said. 'They will push the business community to the edge, and many will be forced to shut down operations or move abroad.'
The PBF also criticized the existing tax structure, pointing out that the effective tax burden on businesses has soared to between 50% and 60%, the highest in the region. This includes a 25% corporate tax, 25% tax on dividends, super tax, sales tax, withholding taxes, and high import duties. According to the Forum, these combined pressures make investment, expansion, and job creation impossible under the current fiscal regime.
In addition to demanding the complete withdrawal of the above clauses, the PBF is calling for a reduction in interest rates to 6% to support business recovery and economic growth. The Forum believes that a more balanced tax policy - coupled with targeted reforms and incentives - could double public spending on education and health without suffocating the productive economy.
Naseer Malik also warned if the Finance Bill 2025 is passed in its current form, Pakistan's economy will face irreversible damage. If the government thinks it can collect taxes without taxpayers, it is free to try. And if the FBR believes it can run an economy without businesses, let it go ahead; the consequences will be clear soon enough.'
Copyright Business Recorder, 2025
