APTMA criticises new tax ordinance, seeks immediate withdrawal

KARACHI: Pakistan’s largest textile industry body has sharply criticised sweeping new tax powers granted to authorities, warning they will erode legal protections for businesses and stifle investment.

The All Pakistan Textile Mills Association (APTMA) on Tuesday called for the immediate withdrawal of Ordinance No IV of 2025, which it described as a “draconian measure” introducing “far-reaching and concerning amendments” to the Income Tax Ordinance, 2001.

The ordinance, issued May 2, authorises the Federal Board of Revenue (FBR) to recover outstanding taxes directly from taxpayers’ bank accounts or seize movable and immovable property following decisions by higher courts, without further notice. It also allows tax officials to be deputed on-site at manufacturing and business premises to monitor production, supply, and unsold stock.

The APTMA said amendments to Sections 138 and 140 of the ordinance effectively strip taxpayers of legal rights and protections. “The changes empower the FBR beyond reason and above the high courts and the Supreme Court of Pakistan,” the group said in a statement. “The revised provisions override legal timelines and judgments, granting the FBR unfettered authority to enforce its demands regardless of judicial relief.”

The association warned the ordinance dangerously expands the FBR’s discretionary powers, describing the tax authority as already notorious for “high-handedness and harassment” of compliant taxpayers. “Nullifying court decisions and legal timelines undermines the sanctity of the judicial process and the principle of due process enshrined in the constitution,” it added. The APTMA said the move risks deepening fear and uncertainty for legitimate businesses, deterring investment and growth.

Separately, the APTMA welcomed the State Bank of Pakistan’s decision on Monday to cut its benchmark interest rate by 100 basis points, calling it a “commendable step” to revive economic activity. However, it added that a more aggressive reduction was warranted to ease pressure on the country’s embattled industrial sector.