Daily Times

The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has vehemently opposed the federal budget’s proposal to replace the fixed income tax regime for exporters with a 29% tax on profits. The move, deemed catastrophic by industry leaders, has sparked widespread outcry among Pakistan’s export sectors.

Senior Vice President of FPCCI, Saqib Fayyaz Magu, along with representatives from the Faisalabad Chamber of Commerce, Sialkot Chamber of Commerce, and various industry associations including Textile, Pharmaceutical, Rice, Fruit, Vegetable, Leather Products, and Tanners, voiced their concerns at a press conference. Magu warned that the proposed budget measures would escalate harassment and corruption by the Federal Board of Revenue (FBR), driving investors

out of the country. He emphasized that businessmen should not be subjected to non-bailable arrests, labeling the proposed law as draconian and calling for its immediate withdrawal. Failure to reverse the decision would prompt a nationwide consultation with export industries to determine their response.

Chairman of the Rice Exporters Association, Chela Ram Kiwalani, and Chaudhry Muhammad Israr Sharif criticized the timing of the proposal, noting its potential to severely damage exports during an already challenging economic period.

Abdul Rahim Janu highlighted that exporters are already burdened with taxes amounting to 30-35% of their profits. Under the new National Tax Regime, a 29% tax on exports combined with a 10% super tax would bring the total to a staggering 39%, paving the way for increased harassment and corruption. Janu warned that the abolishment of the fixed tax regime could lead to a $6 billion reduction in exports, referencing the failure of a similar system 15 years ago due to rampant corruption and misuse. The business community remains united in its opposition, warning of dire consequences if the proposed tax changes are implemented.