Islamabad, July 12, 2025 — Dr. Hamid Ateeq Sarwar, Member Inland Revenue (Operations) of the Federal Board of Revenue (FBR), stated that the arrest powers under Section 37A of the Sales Tax Act, 1990 will only be invoked against tax fraudsters and not legitimate traders or manufacturers.
Speaking at a meeting organized by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Dr. Sarwar emphasized that Section 37A will strictly be applied to those engaged in fraudulent practices, including the use of fake or flying invoices that lead to billions in revenue losses. He reassured stakeholders that the FBR has no intent to misuse its powers or harass compliant businesses.
The FPCCI had expressed deep concerns over the new powers granted to FBR officials, warning that extreme measures, including a nationwide strike, could follow if their grievances were ignored. However, after receiving a firm commitment that the powers would only be exercised against fraudsters, FPCCI announced that it would not proceed with the planned July 19 strike.
During the session, business leaders from various sectors—including flour mills, ghee manufacturers, real estate agents, and chambers from Islamabad, Lahore, and Karachi—voiced their concerns. President of the Real Estate Federation, Sardar Tahir, highlighted that the unilateral increase in stamp duty by the CDA had negated recent federal tax relief measures. The Minister of State for Finance, Bilal Azhar Kiyani, promised to escalate the issue to the relevant federal ministries.
FPCCI President Atif Ikram Sheikh demanded the postponement of Section 37A’s enforcement until clear guidelines were established. Minister Kiyani, while noting that the Finance Act 2025 had already been passed by Parliament, offered monthly consultations to prevent misuse of authority. He reiterated that while the FBR’s powers are legally sanctioned, their abuse will not be tolerated.
Dr. Sarwar added that the FBR has identified nearly 60,000 active sales tax filers out of 200,000 registered entities, and only those engaging in clear tax evasion will face action. He stressed that honest businesses have nothing to fear. The FBR, he reiterated, is committed to targeting only fraudsters who exploit the system, and not genuine taxpayers.