Commercial properties: UBG slams imposition of 16pc ST on rental

LAHORE: S. M. Tanveer, Patron-in-Chief United Business Group (UBG) has expressed concern over the imposition of a 16% sales tax on the rental of commercial properties in Punjab.

He feared that this new tax regime would significantly raise the cost of doing business and worsen an already fragile investment climate. He strongly criticized the step, calling it economically unsound and legally indefensible. He emphasized that such a move would lead to serious implementation and legal challenges.

According to him, renting commercial space in Punjab has just become prohibitively expensive. It would place an unsustainable burden on already struggling retailers and entrepreneurs in a situation when economic activity is under immense pressure, he said, adding that such punitive measures risk driving legitimate, tax-compliant businesses into the informal sector.

The introduction of a 16% sales tax on rental spaces is not just a financial blow; it is a signal that doing business is becoming increasingly unpredictable and risk-laden. He further emphasized that imposing additional taxes without proper consultation or impact analysis could lead to contraction in the formal retail sector, job losses, and decline in investor interest, both local and international.

He warned that the current approach undermines the government’s own stated objectives of economic revival, export enhancement, and broadening the tax base through inclusive policies. He has urged the government to reconsider this policy in favour of more balanced, transparent, and business-friendly reforms that promote investment, stability, and long term economic resilience.

Copyright Business Recorder, 2025