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Business Recorder
11 hours ago
- Business
- Business Recorder
KCCI urges govt, ECC to withdraw gas tariff hike proposal
KARACHI: Chairman Businessmen Group Zubair Motiwala and President Karachi Chamber of Commerce & Industry (KCCI), Muhammad Jawed Bilwani, while strongly opposing proposal to increase gas tariff for industrial processes in the upcoming meeting of the Economic Coordination Committee (ECC), termed the proposal illogical and detrimental to Pakistan's already struggling industrial sector, particularly at a time when input costs are surging and exports are under severe pressure. Zubair Motiwala and Jawed Bilwani emphasized that the move is unjustified given the current energy market dynamics. They noted that international Brent crude prices have declined, and the SNGPL system is already dealing with a surplus of imported RLNG, with around 300 to 400 MMCFD going unutilized. This surplus exists because power and captive sectors are reluctant to purchase RLNG at exorbitantly high rates compounded by excessive taxes and levies, which has resulted in inefficient resource utilization. Rather than penalizing the industrial sector, the government should be working to improve gas supply management and rationalize pricing. They emphasized that while only around 80 to 100 Independent Power Producers (IPPs) utilize process gas, it is critical to recognize that the livelihoods of over 8,000 Small and Medium Enterprises (SMEs) also depend on this essential resource. Any increase in the gas tariff would severely impact the already struggling SME sector, which plays a vital role in the country's economic fabric. Rather than imposing a hike, a more prudent policy would be to reduce the process gas tariff by at least 20 percent, enabling SMEs to remain operational and contribute effectively to the economy, they suggested, adding that at a time when the business community is already burdened by the harsh taxation measures introduced in the budget, a tariff increase would only deepen their challenges. Given that the country has surplus indigenous gas, the logical course of action would be to offer it at lower rates to stimulate industrial consumption, boost production, and drive economic growth. They further highlighted that OGRA itself, in its decision dated May 20, 2025, approved a significant reduction in gas tariffs for SSGC by PKR 103.95 per MMBtu, setting the new rate at approximately PKR 1,658.56 per MMBtu. This decision was made in recognition of cost realities and declining fuel prices. 'If OGRA found justification to reduce the tariff for SSGC, how can the government justify a hike for industrial consumers?' Chairman BMG and President KCCI questioned. They added that such contradictory measures create serious disparities and undermine industry confidence in policy consistency. They also pointed out that OGRA's determination for SNGPL prescribed a revised price of Rs 1,895.25 per MMBtu, which is still below the proposed hike. Moreover, during OGRA's own hearing process, several petitioners highlighted the existence of a projected RLNG surplus of approximately 400 MMCFD; equivalent to 79,337 BBTU or nearly 25 LNG cargoes. Petitioners also demanded the revision of Brent crude pricing assumptions in OGRA's ERR, noting that the assumed price of USD 75.33 per barrel was higher than global spot rates, leading to artificially inflated diversion costs and non-transparent, non-cost-reflective pricing. Copyright Business Recorder, 2025
Arab News
a day ago
- Business
- Arab News
Pakistani industrialists eye Gulf nations for business as tax laws toughen at home
KARACHI: More and more Pakistanis are planning to shift their businesses to the Gulf countries as Prime Minister Shehbaz Sharif's government seeks to give policing powers to tax collectors, a traders' representative said on Thursday, describing the move as being 'worse than law of the jungle.' The government this month introduced a new legal provision in the form of Section 37AA of the Sales Tax Act, 1990 that allows officers of the Federal Board of Revenue (FBR) to make arrests in case of a 'tax fraud or any other offense warranting prosecution.' The move has sparked protests by the Karachi Chamber of Commerce and Industry (KCCI), the country's largest body of traders and industrialists, in Karachi which the KCCI members say could be expanded to the whole country, if the government did not withdraw the provision decision. In an interview with Arab News, KCCI President Muhammad Jawed Bilwani said investors were already deserting Pakistan for Gulf countries, Vietnam, South Korea, US, African and Central Asian regions and even Afghanistan, and more people plan on joining them after the latest move. 'Most of the people have shifted to the UAE (United Arab Emirates) and Gulf countries where they say the tax rate and electric tariffs have been fixed for 10 years,' the KCCI president said. 'In those countries the tax rate applied is fixed for a decade, unlike Pakistan where we see a change every year. The utility rates are fixed, the departments are fixed, there is one-window operation. Everything is made available for you within 24 hours. The government's response is very good.' Arab News reached out to Pakistan's finance adviser Khurram Schehzad and FBR spokesperson Najeeb Ahmad Memon, who did not respond to requests for comment on the subject. In his budget speech on June 10, Finance Minister Muhammad Aurangzeb said granting policing powers to the FBR was part of the government's efforts to reform Pakistan's weak revenue system that has created an estimated tax gap of Rs5.5 trillion ($19.4 billion). 'This situation was unacceptable,' the minister said at the time. Pakistan has the region's lowest tax-to-GDP ratio that the government seeks to increase to 14 percent in the next three years in line with the International Monetary Fund's loan program that supports the new budget. The IMF's tough conditions have made the government to take steps like the withdrawal of energy subsidies and toughening laws to meet Rs14 trillion ($50 billion) tax target for the next fiscal year starting July 1. Giving policing powers to FBR officers was another such measure. 'That day [June 10] some members asked us what help the [Karachi] chamber could extend if we wanted to make a committee to shift our businesses abroad,' Bilwani told Arab News, warning of going on a strike if the government did not address their concerns. The agitation may jeopardize the macroeconomic stability Pakistan has achieved in the last one year. Sharif's government is already coping with the persisting political instability that is keeping foreign investors away from Pakistan and the country has not attracted more than $3 billion foreign direct investment in about last two decades, according to official data. '[We] will pay taxes with honor,' reads one of the KCCI banners the traders have placed throughout Pakistan's commercial capital of Karachi. Bilwani said the government was granting 'very dangerous powers' to the FBR that would then be able to seize bank accounts of traders, withdraw money from them and arrest them. According to the KCCI data, more than 24,000 Pakistani businesses have registered with the Dubai Chamber of Commerce in the last two and a half years. As many as 8,036 Pakistani firms registered in 2023, 8,179 in 2024 and over 8,100 by the initial months of 2025. 'Thanks to Dubai Chamber membership data, we can see a clear trend of Pakistani businesses establishing themselves in the UAE,' said KCCI spokesman Aamir Hasan. Presently, he said, more than 47,000 Pakistani-owned firms are operating in the UAE, including 8,000 having established there within last one year. 'The kind of direction this budget has taken it can neither help the exports industry nor the import substitute industry to run,' said Bilwani, who was unsure if the government had made any changes in the new budget which the lower house of Pakistan's parliament passed on Thursday. 'The exports of this country have been continuously falling for the last two months.' Pakistan's exports declined by 6 percent in May to $2.67 billion and by 17.66 percent to $2.17 billion in April, according to official figures. The exports rose by 3 percent to $2.65 billion in March. 'Who will survive in this environment? Those who have money can go anywhere and do business,' Bilwani said, adding that mill owners would soon start agitating in Pakistan's textiles and sports goods hubs like Faisalabad, Sialkot and Lahore. This departure by industries will significantly increase unemployment and poverty as well as deteriorate the law-and-order situation in the country, according to the traders' representative. In a separate KCCI statement, Bilwani said 'the protest will escalate. If our demands are ignored, we may be left with no option, but to call for citywide or even nationwide strikes.' 'We don't see things are in order,' Bilwani told Arab News. 'The government should correct its decisions and set them in the right direction so the industry could run.'
Arab News
a day ago
- Business
- Arab News
Pakistani industrialists eye Gulf nations for business as tax laws toughen at home — representative
KARACHI: More and more Pakistanis are planning to shift their businesses to the Gulf countries as Prime Minister Shehbaz Sharif's government seeks to give policing powers to tax collectors, a traders' representative said on Thursday, describing the move as being 'worse than law of the jungle.' The government this month introduced a new legal provision in the form of Section 37AA of the Sales Tax Act, 1990 that allows officers of the Federal Board of Revenue (FBR) to make arrests in case of a 'tax fraud or any other offense warranting prosecution.' The move has sparked protests by the Karachi Chamber of Commerce and Industry (KCCI), the country's largest body of traders and industrialists, in Karachi which the KCCI members say could be expanded to the whole country, if the government did not withdraw the provision decision. In an interview with Arab News, KCCI President Muhammad Jawed Bilwani said investors were already deserting Pakistan for Gulf countries, Vietnam, South Korea, US, African and Central Asian regions and even Afghanistan, and more people plan on joining them after the latest move. 'Most of the people have shifted to the UAE (United Arab Emirates) and Gulf countries where they say the tax rate and electric tariffs have been fixed for 10 years,' the KCCI president said. 'In those countries the tax rate applied is fixed for a decade, unlike Pakistan where we see a change every year. The utility rates are fixed, the departments are fixed, there is one-window operation. Everything is made available for you within 24 hours. The government's response is very good.' Arab News reached out to Pakistan's finance adviser Khurram Schehzad and FBR spokesperson Najeeb Ahmad Memon, who did not respond to requests for comment on the subject. In his budget speech on June 10, Finance Minister Muhammad Aurangzeb said granting policing powers to the FBR was part of the government's efforts to reform Pakistan's weak revenue system that has created an estimated tax gap of Rs5.5 trillion ($19.4 billion). 'This situation was unacceptable,' the minister said at the time. Pakistan has the region's lowest tax-to-GDP ratio that the government seeks to increase to 14 percent in the next three years in line with the International Monetary Fund's loan program that supports the new budget. The IMF's tough conditions have made the government to take steps like the withdrawal of energy subsidies and toughening laws to meet Rs14 trillion ($50 billion) tax target for the next fiscal year starting July 1. Giving policing powers to FBR officers was another such measure. 'That day [June 10] some members asked us what help the [Karachi] chamber could extend if we wanted to make a committee to shift our businesses abroad,' Bilwani told Arab News, warning of going on a strike if the government did not address their concerns. The agitation may jeopardize the macroeconomic stability Pakistan has achieved in the last one year. Sharif's government is already coping with the persisting political instability that is keeping foreign investors away from Pakistan and the country has not attracted more than $3 billion foreign direct investment in about last two decades, according to official data. '[We] will pay taxes with honor,' reads one of the KCCI banners the traders have placed throughout Pakistan's commercial capital of Karachi. Bilwani said the government was granting 'very dangerous powers' to the FBR that would then be able to seize bank accounts of traders, withdraw money from them and arrest them. According to the KCCI data, more than 24,000 Pakistani businesses have registered with the Dubai Chamber of Commerce in the last two and a half years. As many as 8,036 Pakistani firms registered in 2023, 8,179 in 2024 and over 8,100 by the initial months of 2025. 'Thanks to Dubai Chamber membership data, we can see a clear trend of Pakistani businesses establishing themselves in the UAE,' said KCCI spokesman Aamir Hasan. Presently, he said, more than 47,000 Pakistani-owned firms are operating in the UAE, including 8,000 having established there within last one year. 'The kind of direction this budget has taken it can neither help the exports industry nor the import substitute industry to run,' said Bilwani, who was unsure if the government had made any changes in the new budget which the lower house of Pakistan's parliament passed on Thursday. 'The exports of this country have been continuously falling for the last two months.' Pakistan's exports declined by 6 percent in May to $2.67 billion and by 17.66 percent to $2.17 billion in April, according to official figures. The exports rose by 3 percent to $2.65 billion in March. 'Who will survive in this environment? Those who have money can go anywhere and do business,' Bilwani said, adding that mill owners would soon start agitating in Pakistan's textiles and sports goods hubs like Faisalabad, Sialkot and Lahore. This departure by industries will significantly increase unemployment and poverty as well as deteriorate the law-and-order situation in the country, according to the traders' representative. In a separate KCCI statement, Bilwani said 'the protest will escalate. If our demands are ignored, we may be left with no option, but to call for citywide or even nationwide strikes.' 'We don't see things are in order,' Bilwani told Arab News. 'The government should correct its decisions and set them in the right direction so the industry could run.'
Express Tribune
a day ago
- Business
- Express Tribune
KCCI slams FBR proposals
Listen to article President of the Karachi Chamber of Commerce and Industry (KCCI), Muhammad Jawed Bilwani, has strongly criticised the Federal Board of Revenue (FBR) for what he termed its authoritarian conduct and disregard for the Business Anomalies Committee, comprising presidents of chambers and trade bodies from across Pakistan. Following extensive consultations with its members, KCCI has launched a citywide protest by displaying banners across Karachi against what it calls "oppressive" provisions in the Finance Bill 2025-26, particularly the proposed Section 37AA in the Sales Tax Act. "This is just the beginning," Bilwani said in a statement. "The protest will escalate, with press conferences by KCCI and other major chambers. If our demands are ignored, we may have no choice but to call for citywide or even nationwide strikes." He dismissed the finance minister's claims of a "public-friendly" and "business-friendly" budget as detached from reality. "Industrialists and exporters unanimously agree — there is no relief." Bilwani outlined a grim outlook for the business environment, citing high energy costs, poor infrastructure, gas shortages, water scarcity, and delayed tax refunds. "Our exports survive not because of policy support, but due to the resilience of our business community. Some buyers are even advising us to shift operations to more stable, business-friendly countries." Criticising Section 37AA as a "draconian law," he said it allows FBR to freeze bank accounts, seize funds, and arrest taxpayers based solely on suspicion, regardless of their past compliance. "Who will continue to do business under such hostile conditions?" He revealed that many businessmen have asked KCCI to help them explore options for relocating abroad. "We still want to stay and contribute. But we need the government and prime minister to listen and give us confidence." Bilwani stressed that this frustration is nationwide. "Faisalabad, Lahore, Sialkot — all major export hubs — are raising the same concerns."
Business Recorder
2 days ago
- Business
- Business Recorder
KCCI slams FBR for its ‘authoritarian' conduct, ‘indifference'
KARACHI: President Karachi Chamber of Commerce & Industry (KCCI), Muhammad Jawed Bilwani criticised the Federal Board of Revenue (FBR) for its authoritarian conduct and indifference towards the Business Anomalies Committee, comprising presidents of Chambers of Commerce and leaders of trade bodies from across the country. In a powerful move, the KCCI, after thorough consultations with its members, has launched a full-scale protest by displaying bold banners across Karachi against the oppressive measures proposed in the Finance Bill 2025–26, particularly the insertion of Section 37AA in Sales Tax Act. In a statement issued, Bilwani said, 'This is just the beginning. The protest will escalate, press conferences will follow not only by KCCI but also by other major Chambers across Pakistan. And if our demands are ignored, we may be left with no option but to call for citywide or even nationwide strikes. I appeal to the entire business community, especially small traders, to stand united with KCCI if such a call is made.' Bilwani criticised the Finance minister's repeated claims that the budget is 'public-friendly' and 'business-friendly', stating that these claims are totally contrary to reality. 'Industrialists and exporters across the board are unanimous; there is absolutely no relief in this budget. He painted a grim picture of Pakistan's business environment, citing soaring energy costs, substandard electricity, gas shortages, water unavailability, and delayed tax refunds that have paralyzed liquidity. 'Exports are not thriving because of any government policy. They are sustained solely due to the resilience and global reputation of our business community. In fact, many of our international buyers are urging us to shift operations to other countries where conditions are stable, sustainable, and truly pro-business.' Highlighting the most controversial provision, Section 37AA, Bilwani labeled it as a draconian law that defies all norms of justice. 'This section empowers FBR to freeze bank accounts, seize funds, and arrest taxpayers based merely on suspicion, even those who have been tax-compliant for decades. Is this a fair thing to do? Who will continue to do business in such a hostile climate?' He revealed that many businessmen are now asking KCCI to form a committee to guide them on how to relocate their businesses abroad so they can operate in a safer, fairer environment. 'But we are still here. We want to stay, we want to contribute, and we want the Prime Minister and the government to hear us and give us the confidence we need to make sound business decisions.' Bilwani emphasised that this is not just Karachi's grievance. 'Faisalabad, Lahore, Sialkot, all major export hubs, are echoing the same concerns. These cities including Karachi house most of Pakistan's industries and top taxpayers, yet they are being sidelined. If this continues and the people support us, we will not hesitate to call for strikes.' He also slammed the FBR for its mishandling of the Business Anomalies Committee meeting, calling it 'pathetic and humiliating.' Despite the presence of senior business leaders, the FBR failed to send officials to listen to critical recommendations. Instead of a proper Zoom link, a Cisco link full of flaws was shared, resulting in technical chaos as participants were unable to understand the audio or view the presentation slides. 'The Member IR showed up after a long delay, spoke for barely five minutes, and then disappeared, demonstrating the government's total lack of seriousness. To make matters worse, the anomalies list shared during the meeting didn't even include the issues raised by chambers, it only reflected inputs from a select few. Disgusted by this farce, most members walked out of the meeting and submitted their resignations, rightly concluding it was a complete waste of time.' Copyright Business Recorder, 2025
