SIFC steps in to defuse tensions over FBR powers

KARACHI: Representatives from the business community held a productive meeting with the Special Investment Facilitation Council (SIFC) on Wednesday, where Federal Board of Revenue (FBR) officials, including the chairperson, assured them that newly introduced FBR arrest powers would not be misused, said Chairperson of the All Pakistan Textile Mills Association (Aptma) Kamran Arshad on Geo TV’s show ‘Aaj Shahzeb Khanzada Kay Saath’.

This comes a day after the Aptma and the Federation of Pakistan Chambers of Commerce and Industry’s (FPCCI) meeting with Field Marshal and Army Chief Asim Munir on Tuesday. The two trade bodies have claimed, without official denial so far, that the army chief assured them of the immediate suspension of the FBR’s arrest powers.

Tensions between the government and the business community soared following the introduction of new provisions, particularly those added under Sections 37A and 37B of the Sales Tax Act, 1990, pertaining to the arrest and detention of taxpayers deemed guilty of misrepresentation by the FBR.

Since then, trade leaders have met government representatives and proposed changes to the newly introduced provisions. But until their meeting with Field Marshal Asim Munir, no trade body had hinted at the possible suspension of the provisions.

When asked why trade leaders were not convinced by the prime minister’s assurances, Arshad said that the FBR’s ambitious tax collection target for FY26, set at Rs14,131 billion, has raised concerns among the business community. Most trade leaders fear that more strain will be placed on the documented segment of the economy to meet the target.

Arshad said that the Wednesday meeting provided a platform for trade leaders to have meaningful discussions with FBR officials, bridging the communication gap that the business community had with the tax body.

Another point of concern for traders is the amendment to Section 24 of the Income Tax Ordinance 2001, which prohibits the deduction of expenses for cash sales exceeding Rs200,000. This too has not been well received by the business community.

In his interview with Geo TV’s Shahzad Iqbal on ‘Naya Pakistan’ on Saturday, Special Assistant to the Prime Minister on Revenue (SAPM) Haroon Akhtar Khan said that after the July 18 meeting with trade leaders, new proposals have raised the cash transaction limit from Rs200,000 to Rs2,500,000.

Talks between a delegation of business and trade bodies and the government began after businesses announced plans to observe a strike on July 19 (Saturday). A day before the strike, FPCCI postponed its call, citing fruitful talks with the government. However, the Karachi and Lahore chambers went ahead with the protest.

Aptma and the FPCCI on Tuesday praised Field Marshal Asim Munir for intervening to suspend the controversial FBR powers under Sections 37A and 37B. During a meeting led by Dr Gohar Ejaz, business leaders raised concerns over high interest rates, delays in export facilitation reforms and rising energy costs.

The army chief assured immediate action and directed the FBR to hold consultations with stakeholders. The two bodies welcomed his commitment to resolving electricity pricing issues and backed the SIFC’s role in supporting industrial growth. They reaffirmed their support for reforms aimed at economic stability and export competitiveness.