FPCCI Flags SRO 350 as Anti-Business, Claims to Halt Industry

FPCCI Flags SRO 350 as Anti-Business, Claims to Halt Industry

Karachi, April 25, 2024 – The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has voiced significant concerns over the Federal Board of Revenue’s (FBR) recent regulatory changes, labeling the Statutory Regulatory Order (SRO) 350 as anti-business and a potential threat to the ongoing viability of trade and industry sectors across Pakistan.

In a sternly worded letter to Malik Amjad Zubair Tiwana, the chairman of the FBR, FPCCI President Atif Ikram Sheikh highlighted the apprehensions of the business community regarding SRO 350 (I)/2024 issued on March 7, 2024, and the subsequent SRO 582 (I)/2024 dated April 18, 2024, which amended the Sales Tax Act, 1990.

According to Sheikh, these regulatory updates were introduced without adequate consultation with key stakeholders, including trade bodies, raising questions about their feasibility and the FBR’s approach to policy-making. “The clauses of the SRO, as they stand, are impractical and, if enforced, would bring almost all trade operations in the country to a standstill,” Sheikh stated in the letter.

One of the major points of contention is the requirement for biometric verification. The FPCCI criticized clause ‘C’ sub rule 4, which mandates owners of business entities to undergo biometric verification at a NADRA Sahulat Center. Sheikh argued that this requirement not only undermines the ease of doing business but also imposes unnecessary hurdles for business owners, potentially disrupting daily operations.

Another critical issue highlighted by the FPCCI is the amendment under rule 18(B) of SRO 350. This rule stipulates that if a seller fails to file his monthly tax return within the prescribed 12-day period post-month-end, the buyer’s corresponding purchase invoice will automatically be deleted from the FBR system, thus denying them the ability to claim input tax credit. This mechanism, according to the FPCCI, is punitive and adversely affects the cash flows and tax compliance incentives of businesses.

Furthermore, Sheikh criticized the FBR’s follow-up with SRO 582, which intended to amend certain clauses of the Sales Tax Rules, 2006. He expressed disappointment that even these amendments failed to address the core concerns of the business community or to facilitate ease of operation in the marketplace.

The FPCCI has hence taken a strong stance that the recent actions by the FBR, particularly through the issuance of SRO 350 and SRO 582, seem to reflect a broader intent to stifle business operations across the country. “Such regulatory measures are not only disruptive but also indicative of a disconnect between government tax policies and ground realities faced by businesses,” Sheikh added.

As Pakistan’s apex body of trade and industry, the FPCCI’s criticism carries substantial weight and signals potential challenges ahead in the dialogue between government authorities and the private sector. The FPCCI is now calling for a comprehensive review and reconsideration of these SROs to ensure that policies support, rather than hinder, the growth and health of Pakistan’s economy.

The FBR has yet to respond to the FPCCI’s criticisms. The business community watches closely, hoping for amendments that might align more closely with practical business operations and economic advancement in Pakistan.