Tax officials’ new powers: FPCCI mulling moving the court

KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has unequivocally rejected the new powers granted to tax officials in the recently announced Federal Budget, branding them as “excessive, overly-subjective, and harassment-prone.”

During a press conference in Karachi, FPCCI leadership announced their intention to challenge these authorities in superior courts, specifically those enabling taxmen to withdraw funds from business accounts and conduct raids on business premises without prior notice.

The FPCCI leadership urged the federal government to withdraw these stringent measures before the budget’s final passage from parliament to restore confidence within the business community.

FPCCI President Atif Ikram Sheikh emphasized that tax collection targets can only be met if industrialists and exporters are actively engaged through a comprehensive consultative process. He lamented that the budget largely overlooks the necessary steps to empower the business community to realize the Prime Minister’s vision for export-led growth.

Sheikh further elaborated on a globally established principle: increased intervention or interaction by tax collectors with taxpayers tends to undermine fairness, transparency, and impartiality, as heightened human-to-human interactions and subjective human judgments become a source of nuisance.

Saquib Fayyaz Magoon, Senior Vice President of FPCCI, demanded the restoration of the Fixed Tax Regime (FTR) for exporters in its original form and for a long-term duration. This, he argued, is crucial for bringing clarity, certainty, and consistency to taxation policies, thereby attracting both Foreign Direct Investment (FDI) and domestic investment by ensuring Pakistan remains competitive as a country.

Magoon also highlighted the necessity of broadening the Export Facilitation Scheme (EFS) to include local manufacturers, warning that without such inclusion, Pakistani products would face supply line disruptions and a lack of competitiveness in regional and international markets. He further expressed resentment that the FPCCI’s recommendations for special incentive packages for the high-growth Information Technology, mines & minerals, and fishing industries were disregarded in the Federal Budget.

FPCCI Vice President Asif Sakhi urged tax authorities to cease accusing the business community of tax evasion or theft. Instead, he called for a transformation of the tax machinery into a facilitative body that engages with taxpayers through amicable and respectful behaviour. During the press conference, FPCCI Vice President Aman Paracha proposed the formation of a high-powered fact-finding committee to ascertain the root cause of the FBR’s inability to achieve the tax collection target for fiscal year 2025.

Vice President Nasir Khan highlighted a concerning trend, stating that many businessmen have already relocated to more lucrative and stable investment, trade, and industrial destinations, while those remaining are struggling to operate their factories without incurring losses.

Another concern raised by the FPCCI was the restriction imposed on Special Economic Zones (SEZs) developers for a period of 10 years or until tax year 2035, whichever comes first.

Copyright Business Recorder, 2025