Karachi, September 25, 2024 – The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) voiced strong opposition on Wednesday to the Federal Board of Revenue’s (FBR) proposed tax collection strategies, criticizing them as detrimental to business interests. FPCCI President Atif Ikram Sheikh condemned any efforts by the FBR to boost revenue through measures perceived as anti-business, urging for a more inclusive, consultative process with key stakeholders.
In a statement, Sheikh underscored that the business community rejects high-handed approaches aimed at increasing tax collection. He reiterated that the only sustainable way to enhance tax revenue is through meaningful dialogue with the business, industry, and trade sectors. “The FPCCI has repeatedly emphasized the need for collaboration in shaping tax policies that support economic growth rather than stifle it,” Sheikh said.
He further criticized the FBR’s revised tax collection target of PKR 12.91 trillion for the fiscal year 2024–25, calling it “unrealistic” and “anti-business.” Sheikh noted that the target fails to account for the challenges businesses face in the current economic environment, where there is limited opportunity for expansion. The shortfall in the FBR’s tax collection is already evident, with a PKR 99 billion deficit reported for the July-August 2024 period, and the September 2024 shortfall expected to range between PKR 100-150 billion, he added.
Sheikh stressed the need for the Ministry of Finance and the FBR to analyze the root causes behind these tax collection failures. He urged the government to focus on facilitating exports, renegotiating power purchase agreements (PPAs) with independent power producers (IPPs), reducing the key policy rate to single digits in line with core inflation, and rationalizing power and gas tariffs. Improvements in law and order were also critical, according to the FPCCI president.
Highlighting the current economic imbalance, Sheikh pointed out that while core inflation in September 2024 is expected to be around 8%, the policy rate remains at 17.5%, making the cost of doing business prohibitively high. “This excessive premium makes no economic sense. The interest rate needs to be reduced to single digits to control business costs and make financing accessible,” he stated, calling for a more proactive and pro-growth monetary policy.
Sheikh emphasized that the FPCCI supports broadening the tax base through simplifying the taxation system rather than relying on bureaucratic inefficiencies. He called for special government incentives to integrate micro, small, and medium enterprises (MSMEs) into the tax net.
FPCCI Senior Vice President Saquib Fayyaz Magoon echoed Sheikh’s concerns, asserting that while the FPCCI is ready to facilitate discussions between the government and economic sectors, it cannot endorse measures that discourage businesses from formalizing and joining the tax system.
