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Business Recorder
a day ago
- Business
- Business Recorder
Trade bodies urge PM to abolish all ‘black laws'
KARACHI: Leaders of trade bodies have urged the Prime Minister Shehbaz Sharif to abolish all black laws like Section 37A and 37B introduced in the Finance Bill. They said that if black laws like Kishan 37A and 37B are not abolished, industries will be locked on July 19. They also demanded that those who make laws that drive the business community out of the country should be held accountable. Ahmed Azeem Alvi, President of SITE Association of Industry (SAI) has urged Prime Minister Shehbaz Sharif, who is himself a businessman, to abolish all these laws and bring to justice those who have made these laws, who are making laws that are causing unrest and chaos and creating hopelessness in business circles. He said why don't we make business easier and make the system such that taxes are directly collected in the national treasury. We want to pay taxes and develop the country, but in a respectful manner. He requested the Prime Minister to include the presidents of all chambers of Pakistan in the FBR legislation so that legislation can be made keeping in mind the ground realities. Ahmed Azeem Alvi refused to accept the black laws like Section 37A and 37B introduced in the Finance Bill and has clearly sent a message to the government that the industrial community will not tolerate such laws under any circumstances. He said that the above laws, under which FBR officers have been given the power to arrest tax payers on mere suspicion and even file FIRs, are a highly condemnable move. Ahmed Azeem Alvi, while raising the strong voice of all the industrialists of the SITE area, announced full support for the strike call by all the chambers of the country, including the Karachi Chamber, on July 19 and said that if the government does not withdraw the black laws, then the industries of SITE, the largest industrial zone of Karachi, will be locked on July 19 and the entire responsibility for the delay in delivery of exports and unemployment of workers due to the closure of production activities will fall on the government. The President of the SITE Association further said that ease of doing business and promoting industries is created all over the world, tax relief is given and facilities are provided so that the economy is stabilized, maximum employment opportunities are created and the confidence of the business community is strengthened, but in our country Pakistan, the situation is completely opposite. He said that such laws are being made so that people end their businesses and flee Pakistan, chaos arises in the country and who are the people who want to spread mischief in the country. He said we met with the President of the Karachi Chamber, Javed Balwani, and informed him about the concerns found among the SITE industrialists and also expressed our determination to fully support the Karachi Chamber in its struggle to resolve these issues. He said that we had not yet been able to deal with the issue of Section 37A and 37B when new issues like e-filing and e-billing were raised. He said if we want to become an economic power, we have to act wisely and instead of intimidating our people, we have to provide a conducive environment where people can do their business and run industries without fear or threat. He asked the FBR officers how many awareness sessions they held before implementing new laws. Such laws are not brought that cause harassment. In our opinion, the above-mentioned black laws will only fill the pockets of 22,000 FBR employees. He said that the business community and the noble people will flee from here. Especially the SME sector will be destroyed. President Federal B Area Association of Trade and Industry (FBATI) Shaikh Muhammad Tehseen demanded the government to amend laws and regulations that are tantamount to harassing the business community of the country or face the countrywide strike on July 19. He said that business community categorically rejected the Sections 37AA and 37B of the Income Tax Ordinance, unjust taxation on bank transactions of over Rs. 200,000, e-invoicing, e-bylti and anti-business policies, including arrest of the businessmen. He pointed out that score of companies received notification for audit and inquiry from the tax authority in the last two weeks despite filing tax returns and paying taxes on time. President FBATI mentioned that business community already lodged a series of protest against these laws collectively; however, they decided to go on strike as a protest after their demands have not been addressed by the government by now. It is pertinent to mention here that Karachi Chamber of Commerce Industries (KCCI), major chambers of commerce across the country and trade and industrial associations of Karachi and Federation of Pakistan Chambers of Commerce and Industry (FPCCI), have also decided to back the strike and announced the closure of businesses on July 19. He said on the behalf of the business community and FBATI, we appeal the Prime Minister Mian Shahbaz Sharif, Minister of Finance Muhammad Aurangzeb, and Chairman Federal Board of Revenue (FBR) Rashid Mehmood Langrial to revise the new laws and regulations of tax authorities and their unjust actions. Copyright Business Recorder, 2025


Business Recorder
11-06-2025
- Business
- Business Recorder
Business, industry give mixed response to federal budget
KARACHI: Business and industrial community have given a mixed response to the federal budget for fiscal year 2025–26 presented by Finance Minister Muhammad Aurangzeb at National Assembly on Tuesday. They were of the view that final reaction can only be given after going through budget documents in details. Ahmed Azeem Alvi, President of the Site Association of Industry (SAI), shared detailed feedback on the federal budget proposals after the association submitted six key recommendations to the government. While acknowledging some positive steps, he stressed the need for clearer policies, faster tax refunds, and digital reforms to support exporters and industries. SAI Chief noted that the government has recognised the need for customs sector relief and intends to implement reforms. However, he cautioned that the full impact of these measures will only be clear once the detailed budget documents are released. 'The government has accepted our concerns regarding the performance of the Freight Station and made commitments,' he said. He also highlighted SAI's demand for the immediate repeal of the Income Tax Ordinance issued on May 4, expressing hope that the budget papers would clarify the government's stance. One of Alvi's key concerns was delayed income tax refunds for exporters. He urged the government to ensure refunds are processed within 15 working days through banks. 'Delays force exporters to bear extra costs and liquidity issues,' he said. 'A transparent, corruption-free system is needed to ensure timely refunds.' SAI Chief emphasised the need for digitalization, transparency, and a one-window operation to cut red tape. Currently, 69 federal and provincial agencies conduct factory inspections, creating inefficiencies. 'Reducing these inspections will allow industries to focus on growth rather than compliance burdens,' he said. However, he expressed disappointment that the budget does not adequately address digitalization and one-window reforms, measures crucial for improving the ease of doing business. Alvi criticised the government for not expanding the tax net while setting ambitious revenue targets. 'Instead of focusing on Karachi, which contributes 54% of Pakistan's tax revenue, relief is given to regions with poor recoveries,' he said. He called for policies to further boost Karachi's tax contributions. He also slammed the inclusion of circular debt charges in Karachi's electricity bills, calling it an injustice. 'Despite expectations, the government has not removed these charges, making Karachi one of the most expensive cities for electricity,' he lamented, criticising both federal and Sindh governments for neglecting the issue. Ahmed Azeem Alvi said that while the budget shows some promise, a full assessment will only be possible once detailed documents are released. 'The real test will be whether the government delivers on reforms that truly ease business operations and support industrial growth,' he concluded. However, Salim Valimuhammad, Chairman of the Pakistan Chemicals & Dyes Merchants Association (PCDMA), expressed a mixed reaction to the federal budget. He noted that many aspects of the budget remain unclear, with several SROs (Statutory Regulatory Orders) yet to be issued. According to him, once these SROs are announced, the details will become clearer for stakeholders. He welcomed the reduction in tax rates for the salary class, though he pointed out that the cuts were not substantial for the higher salary brackets. Specifically, the duty on dyes has been reduced from 16% to 15%, while a 5% duty has been imposed on items that were previously zero-rated. However, Salim raised concerns about the extensive powers granted to tax authorities under the new budget, warning that these measures could negatively impact businessmen. He expressed that while the budget shows some improvements, it is not without flaws. Regarding the Export Facilitation Scheme (EFS), PCDMA Chief was critical and suggested that it should have been completely withdrawn, citing numerous abuses of the scheme. He mentioned that the scheme previously focused mainly on major cotton and related sectors, but with the introduction of duties and an 18% tax, preventing misuse of EFS will still remain challenging. Overall, Salim Valimuhammad said that the budget was somewhat better than before, urging clarity on pending regulations and cautioned about the potential effects of increased tax authority powers on the business community. However, Ateeq ur Rehman, an economic & financial analyst said he was surprised that nothing was discussed for stopping brain drain, growth of agriculture, industry, manufacturing, port/ shipping/ logistics, maritime and exports. He said incentives, targeted policy reforms, and inflation were also not discussed. He said as a matter of fact industry and exports cannot grow with the costly energy and gas, high tax and interest rates. He said the government has to give ample incentives. He said there was a silence on our being a debt-oriented country, adding we have to cut all our non-development expenditures and improve institutional capacity for development. He said about SME financing, some good steps have been announced but access to finance has to be implemented in real time. Easy access to education for all, healthcare services and arrangement for clean water needs more funds. The little relaxation of tax on salaried class is really appreciable, he said. Copyright Business Recorder, 2025


Business Recorder
28-05-2025
- Business
- Business Recorder
SAI submits comprehensive proposals for federal budget
ISLAMABAD: The SITE Association of Industry (SAI) has submitted comprehensive budget proposals for the Federal Budget 2025-26, advocating for policy measures to stimulate industrial growth and enhance Pakistan's export competitiveness. In budget recommendations, SAI President Ahmed Azeem Alvi and former president Riaz Uddin, who chairs the association's taxation committee, emphasized the need to transform budget-making into a strategic economic tool rather than maintaining it as a routine fiscal exercise. The industry body emphasized the institutional separation of tax policy formulation and tax administration to avoid conflicts of interest and align with global best practices. Drawing comparisons with the UK and other neighbouring countries' models, SAI suggested the establishment of a structure where tax policy rests with the Ministry of Finance, revenue sharing is managed by an independent finance commission, and consumption taxes are regulated by a dedicated council. Addressing structural weaknesses in the taxation system, SAI noted that Pakistan's income tax base remains narrow-just 9 to 10 percent of GDP- while the formal industrial sector bears a disproportionate tax burden. The association recommended widening the tax net to include all untaxed and under-taxed sectors and capping the maximum income tax rate on business income at 25 percent over the next three years. It further proposed the abolition of the Super Tax, terming it an outdated and unjust burden, and called for relief on inter-corporate and individual dividend taxation. Ahmed Azeem Alvi and Riaz Uddin expressed serious concerns about recent amendments to the Income Tax Ordinance through Ordinance IV of 2025, particularly changes to Sections 138(3A), 140(6A) and 175C of the Income Tax Ordinance. According to SAI, these amendments grant excessive powers to tax authorities and contravene Articles 4, 18, and 77 of the Constitution. The association demanded that the amendments be withdrawn immediately, arguing that they could deter compliance, encourage informality, and diminish investor confidence. Regarding sales tax reforms, SAI leaders pointed out persistent challenges due to overlapping federal and provincial jurisdictions. It proposed a harmonized General Sales Tax (GST) structure supported by a single compliance portal, enabling seamless cross-jurisdictional input tax adjustments. The association stressed the need for expeditious refund mechanisms, with refund payment orders (RPOs) to be issued within five working days of claim submission and payments processed shortly thereafter. Concerns were also raised about the prevailing 22 percent combined sales tax and further tax rate, which the association believes fuels evasion and hinders formalization of the economy. A review of the tax rate structure was urged to reduce distortions and incentivize registration. SAI Chief urged the government to implement progressive reductions in the sales tax rate, targeting a 15% rate over the next three years. The association argues that this reduction will help lower the cost of doing business for the formal tax-paying sector and promote overall economic growth. He also called for the abolition of the additional sales tax, which it claims encourages the continuation of the informal sector by allowing businesses to evade registration and tax obligations. According to the association, this perpetuates a cycle of non-compliance, hindering the formalization of the economy. Furthermore, the association recommends that sales tax exemptions on essential goods, including basic staple foods, pharmaceuticals, and education-related products, should be maintained. These exemptions are seen as crucial in providing a safety net for the common man, particularly in the face of inflationary pressures. SAI also requested the restoration of zero-rating on export facilitation schemes and educational stationery, as promised by the Finance Minister in his budget closing remarks in June 2024. The association believes that reinstating these exemptions will promote the export sector and ease financial burdens on educational institutions. In addition, the association proposed the introduction of a lower sales tax rate of 5% for other essential and deserving items to further reduce the financial strain on consumers. The industry body called for the removal of area-specific sales tax exemptions in the former tribal areas (FATA/PATA). The association stresses that such exemptions should not continue in any form, in line with the broader goal of tax uniformity and fiscal reform across the country. Ahmed Azeem Alvi and Riaz Uddin also emphasized for comprehensive reforms in Pakistan Customs, highlighting outdated legislation, tariff fragmentation, under-invoicing, and ineffective enforcement as key challenges. It recommended a revision of the Customs Act to align with WTO and WCO standards, simplification of duty structures, and adoption of a unified valuation and appraisal system. SAI advocated for the port of entry to be designated as the sole revenue collection point to prevent revenue leakage and ensure smooth inland movement of goods. On social welfare schemes, they criticized the current management of employee welfare programs (EOBI, PESSI/SESSI, WWF, and WPPF) as inefficient and outdated. The schemes largely funded by employers, offer minimal influence to contributors over fund management and disbursement. The association proposed the integration of these schemes into a unified authority with digital interfaces, central governance, and tripartite representation from employers, employees, and regulators. Disbursements, it suggested, should be made via mobile payment platforms, while health and related services could be outsourced to third-party providers. The budget proposals underscore SAI's position that economic policy should balance revenue needs with industrial growth objectives, particularly through measures that enhance Pakistan's export potential and attract productive investment. Copyright Business Recorder, 2025


Express Tribune
28-05-2025
- Business
- Express Tribune
SAI urges tax reforms in budget proposals
Listen to article The SITE Association of Industry (SAI) has submitted its budget proposals for 2025-26, urging the government to adopt structural tax reforms aimed at boosting industrial growth and improving export competitiveness. SAI President Ahmed Azeem Alvi, who also heads the association's taxation committee, stressed that budget-making must evolve into a strategic economic exercise rather than remain a routine fiscal event. A central proposal is the separation of tax policy formulation from tax administration to avoid conflicts of interest. Citing global best practices, SAI recommended assigning tax policy to the Ministry of Finance, entrusting revenue sharing to an independent finance commission, and regulating consumption taxes through a dedicated council. SAI highlighted that Pakistan's narrow income tax base — just 9% to 10% of GDP — forces the formal industrial sector to shoulder an unfair tax burden. The association urged expansion of the tax net to include untaxed and under-taxed sectors and proposed capping the income tax rate on business income at 25% over the next three years. The group also called for the abolition of the super tax, labelling it outdated and inequitable, and sought relief on inter-corporate and individual dividend taxation. Expressing concern over recent changes to the Income Tax Ordinance via Ordinance IV of 2025, particularly to Sections 138(3A), 140(6A), and 175C, SAI argued these amendments give unchecked powers to tax officials and violate Articles 4, 18, and 77 of the Constitution. It warned the measures would deter compliance, promote informality, and hurt investor confidence.


Business Recorder
15-05-2025
- Business
- Business Recorder
SAI chief says now time to focus on economic battle
KARACHI: Ahmed Azeem Alvi, President of the SITE Association of Industry, expressed deep gratitude for Pakistan's recent military victory, attributing the success to divine support, public prayers, and the sacrifices of the Pakistan Army. He emphasised that with the military triumph secured, the nation must now shift its focus to focus on winning the economic battle. Alvi urged the government to prioritise economic development by involving the business community in policy-making. He called for measures to ease the tax burden on businesses and protect them from harassment by Federal Board of Revenue officials. Proposing a streamlined tax system, he suggested a one-window operation where industrialists and traders could deposit fixed amounts directly into official bank accounts to ensure transparency and reduce corruption. Appealing to Prime Minister Shehbaz Sharif, SAI chief highlighted the Prime Minister's business background, expressing confidence that he understands the challenges entrepreneurs face. He urged the government to make business-friendly decisions and shield the sector from harassment by regulatory bodies. He stressed that the business community is committed to expanding enterprises, creating jobs, and boosting foreign exchange reserves. He believes addressing these priorities will drive sustained economic progress. He said, 'Just as Pakistan succeeded on the battlefield, it can also achieve victory in the economic arena and emerge as a strong economic power.' Copyright Business Recorder, 2025