PBF presses PM to scrap tax arrest powers in Finance Bill

KARACHI: The Pakistan Business Forum has called on Prime Minister Shehbaz Sharif to repeal controversial clauses (Sections 37AA and 37B) from the Finance Bill 2025, warning that proposed tax enforcement powers could stifle business activity and erode investor confidence.

In a letter to the prime minister, PBF President Khawaja Mehboobur Rehman urged the government to remove Sections 37AA and 37B, citing what he termed “regressive taxation measures” that risk creating a hostile business environment. Rehman expressed particular alarm over Section 37AA, which grants Inland Revenue officers the authority to arrest individuals without prior judicial approval.

“These provisions risk damaging already fragile investor confidence and could have a chilling effect on economic activity across key sectors,” Rehman said.The PBF also flagged concerns over other clauses -- including Sections 14AC and 14AD -- that expand the Inland Revenue’s enforcement scope, saying such powers could open the door to harassment of legitimate businesses.

Rehman further criticised the Finance Bill’s lack of incentives for agriculture, especially cotton, despite the sector being devolved to provinces under the 18th amendment. He noted that no GST relief had been extended to domestic cotton producers, placing them at a disadvantage and threatening the textile sector -- a key contributor to exports and employment.“Despite assurances from the Ministry of National Food Security, domestic growers are still being overlooked,” the letter stated.