KCCI urges rollback of ‘anti-business’ tax ordinance

KARACHI: President of the Karachi Chamber of Commerce and Industry (KCCI) Muhammad Jawed Bilwani has criticised the Tax Ordinance Amendment 2025, describing it as regressive, anti-business and a serious threat to Pakistan’s already fragile economy.

Bilwani praised the efforts and clear stance of MNA Dr Mirza Ikhtiar Baig, who, he noted, rightly pointed out that the ordinance contradicts the government’s stated objective of fostering a business-friendly environment. He emphasised that key trade bodies such as the FPCCI, KCCI and other chambers have formally protested against the ordinance and questioned why such critical changes were introduced without parliamentary debate or industry consultation.

The KCCI chief demanded the immediate withdrawal of the controversial ordinance, saying that it includes harsh and impractical provisions that would severely disrupt formal businesses, discourage documentation and further erode trust between the private sector and the Federal Board of Revenue (FBR). He warned that the continued practice of burdening the already documented and tax-paying sectors is unjust and unsustainable.

“One of the most damaging aspects of the ordinance is the imposition of excessive advance tax demands based on presumed income,” he said. “This flawed approach ignores sector-specific business cycles and seasonal variations, especially affecting small and medium enterprises and export-oriented units that operate on tight cash flows.” He added that such liabilities could paralyse working capital and force many businesses into default or closure.

Bilwani also expressed alarm at provisions that grant tax officials arbitrary powers, including the authority to freeze bank accounts and issue recovery notices without prior notice or due process. He called this a violation of natural justice, warning that such unchecked powers would foster a climate of fear and harassment, deterring entrepreneurship and driving away investment.

He further noted that the ordinance criminalises procedural non-compliance. Minor lapses such as clerical errors or delays caused by technical issues now attract severe penalties, heavy fines and even criminal prosecution. “Such punitive measures are grossly disproportionate and reflect a lack of understanding of the ground realities faced by taxpayers -- particularly in a system still undergoing digital reform,” he said.

Bilwani argued that the amendment does nothing to broaden the tax base. Instead, it places additional burdens on those already within the system, while leaving large informal sectors -- including retail, real estate and agriculture -- untouched. He described this selective enforcement as perpetuating economic injustice and discouraging formalisation.

Highlighting the unpredictability of tax policy as a major concern, Bilwani criticised the use of an executive order to bypass parliamentary scrutiny. “Businesses require stability and clarity for long-term planning,” he said. “Frequent ad hoc changes in tax laws only fuel uncertainty and deter investment.”

He added that the amendment also contradicts the government’s own agenda of digitalisation and simplification. “Instead of reducing manual intervention and promoting automation, the new provisions increase complexity, paperwork, and the likelihood of discretionary abuse -- all of which discourage tax compliance.”

Bilwani reiterated that the business community supports tax reform, but insisted that all measures must be rooted in fairness, transparency, and broad consultation. “Reform should focus on widening the tax net, encouraging voluntary compliance, and eliminating harassment -- not punishing those already compliant and contributing to the economy,” he said.

He urged the government to initiate an inclusive dialogue with trade and industry representatives before implementing any further fiscal measures. “If the ordinance is not withdrawn promptly, the business community will be left with no choice but to consider united, nationwide protests to safeguard the economy and ensure its survival,” he warned.