Commercial importers: FPCCI urges govt to provide a level playing field

KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has rejected the significant tax disparity introduced in the federal budget between commercial and industrial importers of industrial raw materials, urging the federal government to ensure a level playing field for commercial importers.

Addressing a press conference on Wednesday at Federation House, Saquib Fayyaz Magoon, Senior Vice President FPCCI said that allowing industrial importers to trade imported raw materials at an additional 3 percent VAT, as proposed in the Finance Bill, would further discourage commercial importers.

He demanded that commercial importers of industrial raw materials and industrial manufacturers be treated equally.

He warned that some measures announced in the budget would encourage the fake industrial units, promote the black economy, and cause substantial losses to the national exchequer.

The FPCCI and several other associations have urged the federal government and Federal Board of Revenue (FBR) to address this anomaly to ensure that industrial raw materials are treated as raw materials across the board.

On the occasion, Vice President FPCCI Asif Sakhi, former Vice President FPCCI Shabbir Hassan Mansha Churra and representatives of several associations including the Pakistan Yarn Merchants Association (PYMA), Pakistan Artificial Leather Importers & Merchants (PALIMA),Pakistan Chemicals & Dyes Merchants Association (PCDMA), Pakistan Iron and Steel Merchants Association (PISMA) and Pakistan Plastic Importers Association (PPIA) were also present and demanded the same.

Magoon informed that currently commercial importers are bearing the brunt of disproportionate taxation; severely hindering their competitiveness and threatening the survival of the Small and Medium Enterprises (SMEs) that rely on them.

He highlighted several critical discrepancies in the current and proposed tax regimes, noting that commercial importers are subject to an excessive additional tax burden of 6 to 9 percent in the form of Sales Tax and Withholding Tax (WHT) compared to import of same raw material by the industries.

He further said the Finance Bill’s proposal allowing industrial importers to trade imported goods at a minimal 3 percent additional VAT, which would effectively discourage commercial importers and legitimize a practice beyond the scope of industrial manufacturing.

He added that the lack of competitiveness, coupled with fake refunds and adjustments, is pushing commercial importers out of the market and contributing to the growth of the undocumented economy.

He has urged the federal government to rectify discriminatory taxation policies against commercial importers of industrial raw materials to save billions of rupees revenue for the national exchequer. Magoon maintained that this highly discriminatory policy creates a severe lack of competitiveness in the market.

Shabbir Mansha said that commercial importers do not import raw materials for supermarkets; rather, they supply raw materials to SMEs. Therefore, taxes for industrial and commercial importers should be made equal.

“Trade of imported raw material is not an industry’s job. This budget anomaly breeds flying invoices, encourages the misuse of industrial licenses, and severely damages the national exchequer”, he mentioned.

He said the existing concession was introduced to facilitate genuine manufacturers importing raw materials for their own production. However, many industrial units, including allegedly fake manufacturers, have been importing raw materials under concessional treatment and subsequently selling them in the open market instead of consuming them in their own industries.

“Our cottage industries and SMEs rely entirely on commercial importers to source their raw materials. We strongly appeal to the authorities to ensure a level-playing field immediately”, Mansha demanded.

Saqib Goodluck, Chairman of the Yarn Merchants Association, said that eliminating undocumented economic activities is a pressing need for the economy. He noted that commercial importers have not been given a level playing field for the past fifteen years, and the current budget has widened the disparity even further.

Iftikhar Ahmed Vohra, leader of the Plastic Importers Association, said that industrial raw materials are being sold in the market instead of being used in factories, and similar practices are occurring in other industries as well.

Saleem Makhati, Chairman of the Chemical and Dyes Merchants Association, said that there is no effective check-and-balance system for industrial importers, many of whom operate on an undocumented basis.

Asif Sakhi claimed that a number of fake industries have been registered to import raw material on concessional rate and to sold it in the open market.

Copyright Business Recorder, 2026