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Business Recorder
2 days ago
- Business
- Business Recorder
Finance Act 2025: BMP demands removal of ‘oppressive' clauses
LAHORE: The Federation of Pakistan Chambers of Commerce and Industry's Businessmen Panel (BMP) has strongly condemned the continuation of controversial fiscal amendments introduced under the Finance Act 2025, asserting that Saturday's successful shutter-down across Punjab and the rest of the country signals a deep rupture in the government's contract with the business community. Addressing the wave of frustration engulfing markets from Lahore to Faisalabad, Gujranwala, Sialkot and beyond, BMP Chairman Mian Anjum Nisar noted that this collective shutdown was not a routine protest—it was a definitive vote of no-confidence in the state's current economic direction. Traders, industrialists, wholesalers and retailers across Pakistan voluntarily ceased operations to register their dismay at the coercive new powers granted to tax officials under the revised law. Mian Anjum Nisar stated that Sections 37A and 37B of the Income Tax Ordinance—empowering tax officers with arrest and prosecution authority—violate the constitutional guarantees of fair treatment and due process. He said these clauses are more reflective of a police state than a participatory economy and have triggered panic throughout formal businesses already struggling with rising costs and limited liquidity. 'These measures were neither debated transparently nor tested through pilot phases. The sudden imposition of unchecked arrest powers, aggressive cash handling limits, and unrealistic digital compliance rules has pushed the entire business landscape into uncertainty,' Nisar warned. 'You cannot reform an economy by intimidating its engine. What the government has misjudged is the deep-rooted unity of Pakistan's trading and industrial community.' He pointed out that even law-abiding businesses with a clear tax history are now rethinking their operations due to the fear of misuse by the enforcement arms of the Federal Board of Revenue. Coupled with hasty implementation of SRO 350 and SRO 709, which mandate complex electronic invoicing and tracking requirements, the situation has left traders vulnerable to penalties without preparation. Anjum Nisar said the nationwide protest was not confined to any single region or sector. 'From mega industrial hubs in Lahore to small-town traders in central Punjab, the shutdown was absolute—and peaceful. This is not political agitation. It is a desperate but constitutional signal from those who have been pushed too far,' he said. BMP stated that instead of expanding the tax base through engagement, the government has opted for punitive actions that are alienating even registered taxpayers. 'This is not how you build trust. If every law-abiding businessperson starts to feel like a criminal, the tax system collapses under its own contradictions,' Nisar remarked. He expressed serious concern that the government's narrative continues to suggest that only a few sectors oppose the reforms. 'This strike disproved that myth. The unity seen across commercial centers in Punjab should be a wake-up call. We are talking about a total industry halt—a shutdown of production, supply chains, and sales from top to bottom,' he said. While acknowledging the establishment of a grievance redressal committee by FPCCI and the Ministry of Finance, BMP criticized the lack of urgency in addressing the issues. 'At this stage, verbal commitments are not enough. The government must issue written notifications immediately reversing or suspending the most dangerous aspects of these laws,' Nisar insisted. The Businessmen Panel emphasized that the business community has always been in favor of responsible reforms and progressive digitization. However, it cannot support a system that is imposed overnight, without education, infrastructure, or practical rollout plans. 'Pakistan's economy does not run on apps and directives. It runs on trust, predictability, and dialogue,' he added. He said BMP had repeatedly presented constructive suggestions, including timelines for documentation, gradual onboarding of digital systems, and protections against harassment. 'Unfortunately, the state continues to legislate from a distance, without consulting the very people who will bear the brunt of these policies,' Anjum Nisar lamented. He warned that if the Finance Act is not amended in the coming days, the economic consequences could extend beyond business closures to investment flight, job losses, and reduced exports. 'Pakistan's productive class cannot afford to operate in fear. We will not be spectators to our own collapse,' Nisar said. BMP reiterated its complete support for the constitutional right to protest and expressed pride in how peacefully and effectively the strike was observed across the country. 'The discipline and unity shown on July 20 have restored our belief that business owners can still come together for the nation's economic future. But that unity must now be respected—not ignored,' the chairman said. The Businessmen Panel demanded that the government issue official notifications to immediately withdraw Sections 37A and 37B, revise SRO 350 and SRO 709 with stakeholder input, and suspend punitive cash transaction rules until a proper mechanism is agreed upon. 'We are not seeking confrontation. We are demanding correction,' Mian Anjum Nisar said. 'If the government fails to act now, the business community will be forced to reconsider how—and whether—it continues to operate under such conditions.' Copyright Business Recorder, 2025
Business Recorder
30-06-2025
- Business
- Business Recorder
Imported industrial raw materials: BMP opposes govt's tariff cut reversal decision
LAHORE: The Businessmen Panel (BMP) of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has strongly opposed the federal government's recent decision to reverse tariff cuts on imported industrial raw materials, warning that the move will severely damage domestic industry, accelerate inflation, and weaken the country's already fragile export performance. BMP Chairman Mian Anjum Nisar criticized the imposition of additional duties on essential raw materials, stating that the policy shift is regressive and anti-industry at a time when the manufacturing sector is already struggling due to high energy costs, interest rates, and policy uncertainty. He said that restoring duties that were earlier removed under the Tariff Rationalization Policy will disrupt supply chains and increase the cost of doing business for import-dependent industries. Mian Anjum Nisar said the government's reversal of its own tariff relief measures sends a negative signal to both local and foreign investors. He pointed out that the Tariff Policy Board had originally implemented duty cuts to support industrialization and value addition, aligning with the government's broader economic goals. However, the recent reversal appears to prioritize short-term revenue collection over long-term economic sustainability. He argued that in the current climate of persistent inflation, sluggish industrial activity, and declining exports, any policy that increases the cost of industrial inputs will have a cascading negative effect on the entire economy. 'Reinstating duties on raw materials—especially those not locally produced—is like punishing the productive sector for the government's fiscal mismanagement,' said Nisar. 'This is not the time to choke industry; it is the time to revive it.' The BMP chairman noted that many small and medium enterprises (SMEs) rely heavily on imported raw materials for their survival. These businesses are already under stress due to a lack of financing, low demand, and rising utility bills. The re-imposition of import duties will add another layer of pressure, pushing many SMEs toward closure or informal operations. He urged the government to reconsider its decision and hold consultations with stakeholders before implementing such drastic changes in trade policy. Mian Anjum Nisar emphasized that the competitiveness of Pakistani exports is directly linked to the availability of affordable and high-quality inputs. With global competition tightening and regional countries offering subsidies and incentives to their industries, increasing duties on raw materials will only widen the gap between Pakistan and its competitors. He said that the country cannot hope to boost exports while making it more expensive for its industries to produce goods for international markets. He also highlighted the contradiction in the government's approach, where it claims to support export-led growth while simultaneously making raw materials more expensive. 'You cannot have it both ways. If you want exports to grow, you must reduce input costs. Reversing tariff relief and imposing duties will achieve the opposite,' he said. Nisar stated that the business community fully understands the government's fiscal constraints but argued that the solution should not come at the cost of destroying industrial viability. He urged the Ministry of Finance and the Tariff Policy Board to identify alternative revenue sources that do not penalize the formal industrial sector. 'We are willing to cooperate in developing realistic proposals that can generate revenue without hurting economic growth,' he added. He also warned that the increase in duties will ultimately be passed on to consumers in the form of higher prices, further fueling inflation. This will erode the purchasing power of the masses, reduce consumer demand, and shrink the domestic market for manufacturers. He said this inflationary cycle will be counterproductive to the government's own growth targets and will deepen the recessionary environment in the country. Referring to international best practices, Mian Anjum Nisar said that countries seeking industrial growth typically reduce import tariffs on raw materials to facilitate manufacturing and exports. Pakistan must follow a similar path if it hopes to become competitive in the global market. He stressed that duty-free or low-duty access to industrial inputs is a fundamental requirement for any modern economy and that reversing this principle reflects poor policy planning. He called on the Prime Minister and the relevant ministers to intervene and suspend the new duties immediately. He also urged the National Tariff Commission and the Ministry of Commerce to present an impact assessment report on how the reversal of tariff relief would affect various sectors, especially textile, engineering, pharmaceuticals, and food processing industries. In conclusion, the BMP chairman reiterated his appeal for a more industry-friendly and export-oriented policy framework that supports economic recovery rather than hindering it. He said the business community has always stood by the government during difficult times but warned that continued neglect of industrial challenges will result in long-term damage to the economy. He called for urgent dialogue between the government and trade bodies to arrive at a consensus that balances fiscal needs with industrial survival and growth. Copyright Business Recorder, 2025
Business Recorder
23-06-2025
- Business
- Business Recorder
FPCCI's BMP says budget lacks strategy to revive economy
LAHORE: The Federation of Pakistan Chambers of Commerce and Industry's Businessmen Panel (BMP) has raised strong concerns over the Federal Budget, calling it a document full of theoretical optimism but lacking the concrete execution strategy required to address Pakistan's deep-rooted economic and industrial challenges. The BMP leadership said the government missed a critical opportunity to push forward structural reforms and provide the private sector with practical relief to overcome prevailing financial hardships, rising production costs, and export stagnation. BMP Chairman and former FPCCI President Mian Anjum Nisar said the budget failed to outline any viable roadmap for industrial expansion, job creation, or meaningful growth in the manufacturing sector. He regretted that instead of facilitating businesses, the budget has prioritised tax revenue goals without fixing fundamental issues affecting productivity and competitiveness. He stressed that Pakistan's economic revival is not possible without the active engagement and support of the business community, which continues to feel sidelined despite repeated promises of stakeholder-driven policy. Nisar criticised the government's excessive reliance on indirect taxation and short-term fiscal tools, warning that such an approach will only widen inequality and hinder long-term economic planning. He pointed out that the government has introduced aggressive tax measures without corresponding reforms in documentation and enforcement, creating fears of harassment among already compliant businesses. He strongly opposed granting tax authorities unchecked powers, such as freezing business accounts without prior notice, terming them anti-business and contrary to the spirit of voluntary compliance and trust-building. He said that the Rs1,000 billion earmarked for development spending is inadequate to meet the pressing infrastructure needs of Pakistan's economy, especially in industrial zones, ports, logistics corridors, and power transmission lines, adding unless these funds are used transparently with strict project prioritisation, they will have minimal impact. He urged the government to revive long-stalled industrial and transport infrastructure projects, which are essential to improving supply chains and reducing the cost of doing business. He also expressed serious disappointment over the continued neglect of value-added sectors, particularly textile, apparel, and light engineering, which are the backbone of Pakistan's export economy. Nisar reiterated the BMP panel's longstanding demand for the revival of the zero-rated regime and the removal of procedural hurdles in sales tax refunds. He noted that working capital remains stuck in refund cycles, which creates a liquidity crisis for exporters already struggling with thin margins and delayed shipments. He called for a complete rethinking of the country's tax strategy. Instead of placing more burdens on the formal sector, the government should broaden the base by targeting untaxed segments and expanding documentation through rational incentives. The business community has long urged for a simplified and predictable tax regime with reduced compliance costs, which remains unmet in the current budget. The panel emphasized that a true economic turnaround can only be achieved through structural reforms, reduced dependency on IMF programs, and the formulation of a long-term industrial policy. It pointed out that over reliance on remittances, foreign loans, and import-based revenues is unsustainable and exposes the country to repeated cycles of crisis. BMP urged the government to shift from short-term fire fighting to institutional capacity-building, export diversification, and innovation-led growth. BMP reaffirmed its commitment to standing with Pakistan's business community and offering constructive solutions, but stressed that the government must match its words with action and work hand in hand with stakeholders to lift the economy from stagnation toward sustainable, inclusive growth. Copyright Business Recorder, 2025
Business Recorder
12-06-2025
- Business
- Business Recorder
Business bodies say budget lacks required incentives to revive struggling industries
LAHORE: Major business bodies have expressed significant reservations about the Federal Budget 2025-26, warning it lacks the strategic vision and incentives needed to revive Pakistan's struggling industries and attract vital investment. The Businessmen Panel (BMP) declared the budget risks pushing the economy further off the recovery path, citing a critical absence of measures to stimulate industrial activity, reduce crippling energy costs, or ease the cost of doing business. While the Pakistan Industrial and Traders Associations Front (PIAF) acknowledged some positive steps like tax simplification, it cautioned that overly optimistic revenue targets and the failure to address core issues like high electricity tariffs and interest rates overshadow these gains and hinder sustainable growth. The BMP of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has voiced serious reservations over the Federal Budget 2025-26, criticizing it for lacking any meaningful incentives to stimulate trade, investment, and industrial revival. BMP Chairman Mian Anjum Nisar has urged the government to immediately rectify policy anomalies, cautioning that the budget, if left uncorrected, could push Pakistan further away from the path of economic recovery. The BMP chairman maintained that 'while the budget may satisfy certain technical benchmarks, it does not reflect the pressing needs of the productive sectors of the economy.' He observed that the private sector had hoped for a more balanced and growth-oriented fiscal plan—one that would offer clear direction for industrial revitalization and export development—but instead received a document heavily focused on revenue collection and administrative compliance. According to Anjum Nisar, the government has missed a crucial opportunity to send positive signals to investors and entrepreneurs. Despite challenging global conditions and domestic constraints, the budget does not contain a strategy to stimulate industrial activity, improve business competitiveness, or reduce the excessive cost burden on manufacturers and exporters. 'This is not the kind of budget that can revive economic momentum,' he said. He warned that enforcing compliance without parallel incentives will dampen entrepreneurial energy. The increase in utility tariffs, particularly for gas—an essential input for various industries—without any relief measures, will directly affect export-oriented sectors and small businesses already battling high operational costs. He questioned the rationale behind burdening industries with unaffordable energy while speaking of industrial growth. Anjum Nisar said the absence of targeted steps to boost local production capacity and attract investment shows a lack of clarity in the government's economic vision. He stressed that the government needs to look beyond revenue targets and short-term fiscal adjustments. 'What the economy demands today are bold and focused steps to ease doing business, reduce energy costs, improve infrastructure, and enhance export potential.' Highlighting the significance of industrial performance in determining national stability, the BMP leader stated that the government should have come up with a practical roadmap to strengthen domestic industries, support SMEs, and introduce tax simplifications to widen the base instead of squeezing the existing compliant segments. Unfortunately, the budget continues to rely on conventional tools without offering real innovation or long-term direction. He was also disappointed by the limited allocation for public infrastructure development, pointing out that the proposed development expenditures fall short of what is required to uplift logistics, water supply, power transmission, and road connectivity—critical elements that facilitate business and trade. He emphasized that any meaningful strategy for growth must go hand in hand with investment in infrastructure, especially in urban industrial hubs. The BMP chairman further criticized the absence of reforms to address credit access and financing issues faced by industries. High interest rates continue to choke expansion plans and discourage entrepreneurship. Without a clear pathway to affordable financing, real sector growth will remain constrained, he noted. He questioned the logic behind setting overly ambitious targets for revenue and growth in the absence of a concrete enabling framework. 'The ground reality doesn't match the projections presented in the budget. Unless core challenges are addressed, the macroeconomic indicators cannot show lasting improvement,' he stated. Anjum Nisar noted that 'Pakistan cannot continue to rely solely on remittances or external borrowing for economic survival. It must build an export-led model backed by value-added manufacturing, technology enhancement, and trade diversification. The budget, however, fails to initiate such transformation, lacking strategic sectoral planning or industrial deepening.' He emphasized that the economy is at a stage where growth must take precedence over compliance. The private sector requires reassurance through facilitation, not surveillance. Instead, the tone of the budget sends a message of rigidity and pressure rather than cooperation and partnership with the business community. Copyright Business Recorder, 2025
Business Recorder
26-05-2025
- Business
- Business Recorder
BMP voices its concerns over delay in budget presentation
LAHORE: The Federation of Pakistan Chambers of Commerce and Industry's Businessmen Panel (BMP) has expressed serious concern over the government's decision to delay the presentation of the federal budget for the fiscal year 2025-26 and the possible imposition of additional levies, including a sharp hike in the petroleum levy. The BMP Chairman and FPCCI former president Mian Anjum Nisar termed these developments deeply troubling for the already struggling business community and warned that such decisions would further strain the economy and damage investor confidence. He said that the federal government recently shelved its plan to present the budget on June 2 and is now expected to unveil the fiscal plan on June 10. The delay has been attributed to Prime Minister Shehbaz Sharif's foreign tour as well as internal disagreements over the finalisation of expenditures. He said that this postponement creates unnecessary uncertainty at a time when the business environment is already fragile due to inflation, high energy costs, and sluggish growth. Mian Anjum Nisar stated that the delay in the budget presentation sends a negative signal to the market, businesses, and foreign investors who are waiting for policy clarity. He said that businesses plan their fiscal year strategies based on expected policy announcements, and any delay hampers their ability to make timely decisions regarding investment, procurement, and employment. He added that the lack of transparency around budget planning is further eroding trust between the business community and the government. The BMP is particularly concerned about the government's reported move to increase the petroleum levy, which currently stands at Rs78 per litre. The government is reportedly considering raising this levy further in order to finance a larger Public Sector Development Programme (PSDP) of Rs1 trillion for the next fiscal year. Mian Anjum Nisar warned that any additional levy on petroleum products would result in a significant increase in the cost of doing business, leading to a rise in inflation and further weakening the purchasing power of consumers. He noted that fuel is a key input for industries, transportation, and agriculture, and any increase in its price has a ripple effect across the entire economy. Instead of increasing indirect taxes like the petroleum levy, Nisar urged the government to focus on broadening the tax base, curbing unnecessary expenditures, and implementing structural reforms to improve revenue collection without burdening businesses and the general public. He also criticised the lack of stakeholder consultation in budget-making, especially when businesses are the biggest contributors to taxes and employment. Nisar said that the upcoming budget appears to be driven largely by the International Monetary Fund's directives, with little attention paid to the domestic realities faced by industrialists and exporters. He stressed that the government must engage with business leaders to frame policies that are sustainable and practical, rather than relying solely on external advice. The BMP also raised concerns about possible cuts to subsidies and increased energy costs in the upcoming budget. Nisar warned that the business community will not be able to absorb any further increases in electricity and gas prices, as production costs have already reached unaffordable levels. He said that many industrial units, especially small and medium enterprises, are on the verge of closure due to high input costs and lack of support from the government. The panel also criticised the government's handling of the circular debt issue in the petroleum sector. The plan to use inflated dividends from state-owned enterprises to clear circular debt lacks transparency and may lead to market distortions. Nisar said that instead of adopting temporary fixes, the government should address the structural flaws in the energy sector, including mismanagement, inefficiencies, and losses in transmission and distribution. Nisar further said that the recent abnormal increase in the share price of Pakistan State Oil (PSO), despite its poor financial condition, raises serious questions. He supported the IMF's decision to seek more clarity before approving the government's plan and expressed concern over the exclusion of PSO from the debt retirement scheme. Copyright Business Recorder, 2025
