FPCCI Criticizes Move for New Taxes on Existing Taxpayers

Karachi: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has expressed strong opposition to the potential imposition of new taxes on existing taxpayers in the forthcoming federal budget for the fiscal year 2025-26. The FPCCI has urged the government to avoid introducing additional taxes on imports, exports, and other sectors, suggesting that such measures could hinder national trade, industrial growth, and new investments. The organization warned that it would actively oppose any additional taxes imposed under pressure from the International Monetary Fund (IMF).

Muhammad Aman Paracha, Vice President of FPCCI, advocated for a clear separation between tax policy and tax administration, to prevent conflicts of interest. He called for a transformation of the budget-making process from a routine financial exercise to a strategic economic tool.

Paracha emphasized the need to widen the tax net to include untaxed and under-taxed sectors, warning that imposing further taxes on compliant taxpayers could have detrimental effects. He noted that business activity is currently sluggish, and additional tax burdens could lead to decreased revenue collection and increased tax evasion.

Concerns were also raised over recent amendments introduced through Ordinance IV of 2025, particularly Sections 138(3A), 140(6A), and 175C. Paracha argued that these amendments grant excessive powers to tax authorities and violate constitutional articles, eroding investor confidence.

Proposing a harmonized structure for General Sales Tax (GST), Paracha recommended a unified compliance portal and suggested gradually reducing the GST rate to 12% to lower business costs and stimulate economic growth.

Paracha also called for comprehensive reforms in Pakistan Customs, citing outdated laws, tariff segmentation, under-invoicing, and weak enforcement as significant challenges. He stressed the importance of balancing revenue requirements with industrial development to boost export potential and attract investors.

In a final appeal, Paracha urged Prime Minister Muhammad Shehbaz Sharif to release a long-pending Rs. 23 billion subsidy related to additional electricity consumption and ensure its allocation in the upcoming federal budget.