Karachi Chamber calls for business-friendly tax reforms, digital verification and an end to disruptive enforcement practices
The Karachi Chamber of Commerce and Industry (KCCI) has urged the government to abolish the Federal Board of Revenue’s (FBR) authority to freeze bank accounts, arguing that the practice disrupts business operations and undermines taxpayer confidence.
In its budget proposals for 2026-27, KCCI highlighted concerns over the FBR’s use of various legal provisions to freeze bank accounts and recover taxes without prior notification to taxpayers. According to the chamber, such actions severely affect the day-to-day functioning of businesses.
As part of its recommendations, KCCI proposed the complete abolition of the practice of freezing bank accounts for tax recovery purposes.
The chamber argued that the existing mechanism disrupts financial operations, harasses taxpayers and discourages voluntary tax compliance. It maintained that adopting a more cooperative approach towards taxpayers would improve taxpayer relations and support economic activity.
KCCI also called for the elimination of the FBR’s powers to conduct biannual factory visits for the issuance of exemption certificates under Section 159 of the Income Tax Ordinance.
The chamber noted that these inspections create administrative burdens for businesses, increase the risk of corruption and disrupt industrial operations. It further pointed out that chambers of commerce and trade associations are required to obtain certificates from the Pakistan Centre for Philanthropy (PCP) despite already being licensed by the Directorate General of Trade Organisations (DGTO).
To address these concerns, KCCI proposed several reforms, including the abolition of biannual factory visits, greater reliance on technology and digital verification mechanisms, the issuance of exemption certificates valid for three years instead of requiring renewal every six months, and recognition of DGTO licences as sufficient proof of non-profit status.
According to KCCI, these measures would reduce unnecessary human interaction between taxpayers and tax officials, enhance transparency, minimise inefficiencies and promote a more business-friendly taxation environment.
The chamber emphasised that simplifying tax procedures and reducing discretionary powers of tax authorities would encourage voluntary compliance and improve the overall ease of doing business in Pakistan.
The proposals form part of KCCI’s broader recommendations for Budget 2026-27 aimed at fostering a predictable, transparent and growth-oriented tax regime.
