The Karachi Chamber of Commerce and Industry (KCCI) has expressed strong discontent over the recent decision by Federal Board of Revenue (FBR) to monitor production activities through cameras directly connected to the main tax database.
The move, perceived as intrusive and counterproductive, has prompted the President of the Karachi Chamber of Commerce and Industry (KCCI), M. Shariq Vohra, to call for immediate intervention by the Advisor to the Prime Minister for Finance and Economic Affairs.
President Vohra termed the installation of cameras at manufacturing facilities as “draconian” and urged the government to reconsider the decision. In a statement, he emphasized that such measures would hinder industrial growth and economic development rather than foster a conducive environment for businesses.
He specifically called for the withdrawal of the rules introduced through SRO.889(I)2020, urging the authorities to rescind the impugned SRO. Vohra stressed that instead of imposing more regulations and stringent rules, the government should focus on reviewing existing provisions and discretionary powers held by Inland Revenue officers. These powers, when misused, can lead to harassment of taxpayers and act as a deterrent to expanding the tax base.
President Vohra outlined the challenges already faced by industries, including high electricity costs, gas and electricity load-shedding, a dilapidated infrastructure, water-supply shortages, and various taxes such as Sales Tax, VAT, FED, WHT, Customs duties on raw materials, additional customs duty, and regularity duty. Adding more regulations, according to Vohra, will discourage fresh investments in the industrial sector.
He emphasized that Pakistan’s industrial sector is still in a growth phase and may not be ready to comply with such monitoring rules, anticipating difficulties for Small and Medium-sized Enterprises (SMEs) in particular. The complexity of the existing tax regime, coupled with the aftermath of the Covid-19 pandemic, poses significant challenges for businesses, especially those in the SME category.
President Vohra warned that the amendments in tax laws through Finance Bill’2020 and numerous notifications and SROs amending rules and procedures issued by the Federal Board of Revenue (FBR) would further burden taxpayers. He criticized the bureaucracy for making compliance increasingly difficult, despite recommendations from tax professionals and proposals from trade bodies.
The president also highlighted a contradictory policy approach, noting that while the government provided a generous amnesty to the construction and real estate sector, it simultaneously pursued policies that would stifle other industries. Vohra urged the government to focus on liberalization and ease of doing business to help industries recover from the losses incurred in 2020 due to the Covid-19 pandemic and the global economic slowdown.
As the business community voices its concerns, the government will likely face increasing pressure to strike a balance between tax compliance measures and creating an enabling environment for industrial growth and investment. The resolution of this conflict will play a crucial role in shaping the economic landscape and business sentiment in Pakistan.
