FPCCI urges govt to roll back ‘anti-business’ tax measures

KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has called on the government to withdraw what it terms harsh and anti-business tax measures proposed in the Finance Bill before its passage through parliament.

“What the country needs is a pro-business, investment-friendly and growth-oriented fiscal policy framework, especially now that the economy has stabilised and is poised for recovery,” said FPCCI President Atif Ikram Sheikh.

Sheikh added that the government’s tax collection targets can only be met if industrialists and exporters are engaged through a comprehensive consultative process. However, he lamented that the budget lacks the necessary measures to help the business community realise the prime minister’s vision of export-led growth.

He warned that the sweeping discretionary powers granted to tax officials would undermine investor confidence, saying such provisions would lead to harassment, corruption and maladministration.

The FPCCI chief emphasised that globally, it is well established that the more a tax collector is allowed to directly interact with a taxpayer, the more likely it is to erode fairness, transparency and impartiality. “Human-to-human interaction introduces unnecessary subjectivity and becomes a nuisance. We do not need to reinvent the wheel in this regard,” he added.

Sheikh welcomed the reduction in super tax, the rationalisation of tax slabs for salaried individuals, and the simplification of income tax return forms for both salaried individuals and SMEs -- longstanding demands of the FPCCI. He also appreciated the much-needed increase in defence spending to safeguard Pakistan’s geoeconomic interests, trade routes and strategic integrity.

Senior Vice President of FPCCI Saquib Fayyaz Magoon urged the restoration of the fixed tax regime (FTR) for exporters in its original form and for a long-term duration. “Only through clarity, certainty and consistency in tax policy can we attract foreign direct investment and encourage domestic investment,” he said.

Magoon criticised the imposition of 18 per cent sales tax on raw materials, saying that instead of expanding the scope of the Export Facilitation Scheme (EFS) to include local manufacturers -- as recommended by all major sectors via the FPCCI -- the government has taken a regressive step. “This will increase production costs, disrupt supply chains, and hurt the competitiveness of Pakistani products in regional and global markets,” he warned.

He also expressed disappointment that the FPCCI’s proposals to offer special incentive packages for the IT & ITeS, mining and minerals, and fisheries sectors were ignored in the Federal Budget 2025-26. “These are high-growth areas with the potential for exponential expansion,” he added.