Finance Bill 2025: PBF urges PM to repeal Sections 37AA and 37B

KARACHI: The Pakistan Business Forum (PBF) has formally appealed to Prime Minister Shehbaz Sharif to repeal Sections 37AA and 37B from the Finance Bill 2025 before its passage in Parliament, citing serious concerns over the adverse impact these provisions could have on legitimate business operations and investor confidence.

In a letter addressed to the Prime Minister, PBF President Khawaja Mehboob ur Rehman expressed deep concern over what he described as “regressive taxation measures,” particularly those that significantly expand the enforcement powers of the Inland Revenue Services.

Rehman pointed to Sections 14AC, 14AD, 37B, and especially 37AA, which authorizes Inland Revenue officers to make arrests, as creating a “highly concerning environment” that may lead to harassment of businesses. “These provisions risk damaging the already fragile investor confidence and could have a chilling effect on economic activity across key sectors,” Rehman stated. He called for a serious review and amendment of these clauses prior to the bill's approval.

The letter also addressed the government’s neglect of the agricultural sector in the Finance Bill, despite agriculture being a devolved subject under the 18th Amendment. Rehman emphasized the need for meaningful fiscal relief and policy incentives, particularly for local cotton production. “Despite the Ministry of National Food Security’s assurances, no GST relief has been offered for domestic cotton, making it difficult for local producers to compete effectively,” the letter read. “This lack of support not only harms local growers but also undermines Pakistan’s textile industry; a vital contributor to employment and exports.”

President Rehman reminded the Prime Minister of his longstanding support for the revival of cotton and expressed hope that the concerns of the business community would be addressed urgently. “We trust your vision and your deep ties with the business community,” he concluded. “We urge you to ensure that these problematic provisions are repealed before the Finance Bill is finalized.”

Copyright Business Recorder, 2025