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Express Tribune
3 days ago
- Business
- Express Tribune
Economic halt as nation strikes
Listen to article Pakistan's business and industrial community observed a nationwide strike on Saturday, protesting Sections 37A, 37B, and 37AA of the Income Tax Ordinance, which grant the Federal Board of Revenue (FBR) powers to arrest defaulting taxpayers. The shutter-down strike, led by major trade bodies and industrial associations, saw thousands of markets, factories, and commercial units closed across the country in what business leaders called a unified stand against "draconian and anti-business" laws. The protest was led by major trade bodies, including the Karachi Chamber of Commerce and Industry (KCCI), the Pakistan Hosiery Manufacturers and Exporters Association (PHMA), and various industrial town associations. It was held in strong opposition to the controversial new tax laws introduced through the Finance Act 2025-26. "The complete shutdown of markets, industries, and commercial activities reflected a powerful message of economic unity and collective resistance by Pakistan's business community," KCCI President Muhammad Jawed Bilwani said in a statement issued on Saturday. Bilwani emphasised that the strike was not an act of defiance, but a last resort adopted in response to the government's failure to address widespread concerns raised by the business community. Despite several representations and appeals, key anti-business provisions were included in the Finance Act 2025-26 that have created an atmosphere of fear, uncertainty, and hostility among taxpayers. The business community's key demands, which remain unresolved, include the immediate suspension of Sections 37A and 37B of the Income Tax Ordinance, which grant unchecked powers to arrest and prosecute taxpayers without due process; the withdrawal of Section 21(s), which imposes penalties on transactions made through cash, mode of payment still widely used in Pakistan's business landscape, and the restoration of the Final Tax Regime for exporters. He said these demands were conveyed in detail to the special committee formed by the federal finance minister and headed by the Special Assistant to the Prime Minister (SAPM) on Finance, Haroon Akhtar Khan. The business community expected meaningful outcomes based on the recommendations and rationale submitted to this committee. However, only verbal assurances were given, which further intensified frustration and compelled businesses to demonstrate their discontent through a peaceful and united shutdown. "The business community observed a peaceful strike to show their protest against absurd laws and express solidarity; however, the closure of business and economic activities is not in the national interest," said Sheikh Mohammed Tehseen, President of the Federal B Area Association of Trade and Industry (FBATI). He added that the government should repeal these oppressive laws and offer confidence and protection to businessmen and investors. President of SITE Super Highway, Masood Pervaiz, said that the business community is open to consultations with the government to enhance tax revenue and curb tax evasion without any harassment or stringent attitudes. He suggested that the government work actively with the business community towards digitisation in the economic and governance systems to achieve multiple national objectives. He also urged the government to promote ease of doing business and reduce production costs for businesses and trade in the country. President of the Lahore Chamber of Commerce and Industry (LCCI), Mian Abuzar Shad, said that July 19, 2025, will go down in history as a defining day of awareness, unity, and struggle by Pakistan's business community. "Lahore has proven today that it is not just a city – it is a sentiment, a force," he said, demanding urgent revisions and clarifications on Section 37AA, implementation of the e-invoicing and e-Bilty systems, the 16% sales tax on property rent, and the 20% tax on transactions above Rs200,000. The Pakistan Hosiery Manufacturers and Exporters Association (PHMA) also joined hands with chambers and trade bodies across the country in a complete industrial shutdown to protest the controversial arrest powers granted to the FBR. Zonal Chairman of PHMA, Abdul Hameed, along with former chairmen Shafiq Butt and Naseer Butt, announced the closure of hosiery units as part of the countrywide strike, warning that such legislation would only deepen the crisis facing Pakistan's export-oriented sectors. The PHMA leadership said the business community could no longer remain silent while draconian laws continued to erode the confidence of investors and exporters. They said PHMA's participation in the strike was not symbolic but a complete operational shutdown in protest against what they termed economic strangulation by the government's policies. Abdul Hameed expressed grave concern over Section 37AA, which gives FBR officers the authority to arrest businesspersons without due process or prior investigation, merely on suspicion of tax evasion. He said this law is a clear violation of constitutional rights and a serious blow to the already fragile industrial environment of Pakistan.
Business Recorder
15-07-2025
- Business
- Business Recorder
SCCI supports traders' shutter-down strike
PESHAWAR: Sarhad Chamber of Commerce and Industry on Monday announced full support for the country-wide shutter down strike for July 19 against anti-business tax measures through Finance Act 2025-26 and warned the agitation movement would be prolonged, if the unjust and damaging provisions were not withdrawn immediately. Speaking at a news conference, Fazal Moqeem Khan, president of the Sarhad Chamber of Commerce and Industry along with senior vice president Abdul Jalil Jan and members of the SCCI's executive committee at the chamber house expressed deep concern over the alarming provisions of the Finance Act, which came into force on July 1, 2025. President SCCI issued a strong warning to the government, stating that if the unjust and damaging provisions are not withdrawn immediately, the strike will likely be prolonged, and business owners may be compelled to take even more drastic steps, including suspending the filing of Sales Tax and Income Tax Returns. He noted that such sentiments are being increasingly echoed by SCCI's members, who have lost faith in the prevailing economic environment due to the government's oppressive policies. Fazal Moqeem Khan expressed deep concern over the alarming provisions of the Finance Act, which came into force on July 1, 2025. He voiced full solidarity with the Karachi Chamber of Commerce & Industry (KCCI), which has identified thirty harsh tax and customs measures that pose a serious threat to the survival of businesses across Pakistan. He emphasized that the SCCI stands shoulder to shoulder with all business organizations demanding the immediate reversal of these unjust laws. He highlighted, in particular, the extreme dangers posed by the introduction of Sections 37A and 37B of the Income Tax Ordinance, terming them as draconian and unprecedented. 'Another alarming aspect of the Finance Act is the amendment introduced through Section 21(S), which effectively disallows any cash transaction amounting to Rs. 200,000 or more for tax deduction purposes. This means that if a customer pays a supplier in cash, even by depositing cash directly into the supplier's account, the supplier could be penalized by losing 50 percent of the expense in tax calculations, he added. The SCCI chief also voiced serious reservations about the mandatory implementation of E-Bilty and digital invoicing systems for all sales tax-registered entities. He criticized the FBR for attempting to enforce complex digital systems in a country where general and computer literacy remains significantly low. Why taxpayers are being forced to perform the FBR's duties at their own expense and warned that this would only widen the gap between the business community and the tax authorities, Moqeem questioned. He said businessmen should be encouraged to focus on productivity and revenue generation rather than bureaucratic red tape that stifles operations and increases costs. He also condemned the government's complete disregard for the established consultative process traditionally followed before the passage of the Finance Bill. Historically, the Business Anomaly Committee engages with stakeholders and the FBR in a series of meetings to address anomalies and formulate mutually agreed-upon recommendations. These discussions are held with the participation of Member Inland Revenue, Member Customs, and eventually the Finance Minister and Chairman FBR. This year, however, the process was unilaterally bypassed for the first time, leaving no room for dialogue or consensus. In protest, several committee members resigned and walked out. Despite vocal objections not only from the business community but also from parliamentary standing committees of the National Assembly and Senate, the Finance Bill was rushed through without incorporating key recommendations that had been previously agreed upon during deliberations. In conclusion, President Fazal Moqeem Khan appealed directly to the Prime Minister of Pakistan to immediately withdraw Sections 37A and 37B, the Rs. 200,000 cash transaction penalty under Section 21(s), the digital invoicing requirement under SRO 709, and the mandatory E-Bilty provision under Section 40(c). He continued to say that section 8B of the Sales Tax Act, also grants discretionary powers to the FBR Commissioner to disallow complete input tax adjustment, which is completely unacceptable, he said. He also called for shifting exporters from the Normal Tax Regime (NTR) to the Final Tax Regime (FTR). He reiterated that the business community across the country is united in its demand for urgent and meaningful reforms. If the government fails to take corrective measures, the current protest movement will only escalate, with severe consequences for the economy and the state's relationship with its business sector. Copyright Business Recorder, 2025
Express Tribune
14-07-2025
- Business
- Express Tribune
SCCI backs strike against tax measures
The Sarhad Chamber of Commerce and Industry (SCCI) has thrown its full weight behind the countrywide shutter-down strike scheduled for July 19, in protest against what it terms anti-business provisions in the Finance Act 2025-26. At a press conference held at the Chamber House on Monday, SCCI President Fazal Moqeem Khan strongly criticized the federal government for imposing what he called "draconian tax laws" without consulting the business community. Flanked by senior vice president Abdul Jalil Jan and executive committee members, Khan warned that if the controversial measures are not rolled back, the protest movement could intensify. "We may be compelled to suspend the filing of Sales Tax and Income Tax returns," he cautioned.
Business Recorder
14-06-2025
- Business
- Business Recorder
Rs77 per litre PL on furnace oil likely
ISLAMABAD: The government is set to impose Petroleum Levy (PL) of Rs 77 per litre (Rs 82,077 per metric ton) on furnace oil starting July 1, 2025, following the enactment of amendments to the Petroleum Levy Ordinance, 1961 through the Finance Act 2025-26. According to the Petroleum Division, this move is part of Pakistan's ongoing commitments under the IMF's Resilience and Sustainability Facility (RSF) programme. The government has agreed to introduce a Carbon Levy on petrol, diesel, and furnace oil, along with a Petroleum Levy specifically on furnace oil, as part of broader fiscal and environmental reforms. A relevant extract from the agreement states: 'RM 3 (end-June 2025) Carbon Levy: This will include a supplementary carbon levy imposed through the PDL (Petroleum Development Levy) on gasoline and diesel at PRs 5 per litre, phased in over two years. As part of this reform, fuel oil will be added to the PDL, with both base and supplementary rates applicable. Petrol, HSD and furnace oil: Rs2.5/litre carbon levy imposed The scope, phasing, and level of the supplementary carbon levy will be legislated through the FY26 Finance Act. Future Finance Acts may increase the carbon levy beyond this initial rate as needed.' As per the proposed amendments (Annex-I) included in the draft Finance Bill 2025-26: A Carbon Levy of Rs 2.5 per litre will be imposed on motor spirit (petrol) and high-speed diesel for FY 2025-26, which will be increased to Rs 5 per litre in FY 2026-27. On furnace oil, a Carbon Levy of Rs 2.5 per litre (Rs 2,665/MT) will apply in FY 2025-26, rising to Rs 5 per litre in FY 2026-27, in addition to the Petroleum Levy of Rs 77 per litre (as agreed with the IMF). The Petroleum Division has confirmed that these rates were agreed during discussions with the IMF and will take effect once the Finance Act is enacted. Under the amended Petroleum Levy Ordinance, 1961, the federal government is authorized to determine and notify applicable PL rates. The proposals for both the Carbon Levy and the Petroleum Levy—as outlined in paragraphs 2 and 3 of the summary—are being submitted to the Federal Cabinet for formal consideration and approval. It was also noted that the Finance Division and Petroleum Division jointly finalized the principles and rates of the levies with the IMF, and thus, the summary has not been circulated for formal comments from the Finance Division. Copyright Business Recorder, 2025
