Lahore, April 24, 2024 – The Lahore Chamber of Commerce and Industry (LCCI) has formally requested the deferral of several recent Statutory Regulatory Orders (SROs) issued by the Federal Board of Revenue (FBR), citing significant disruptions to business activities.
These orders, particularly SRO 457(I)/2024, SRO 350(I)/2024, and SRO 1842(I)/2023, have been described as detrimental to tax-compliant businesses.
Speaking to the media on Wednesday, a spokesperson of Lahore Chamber highlighted a letter addressed to Prime Minister Shehbaz Sharif by LCCI President Kashif Anwar, in which he expressed concerns over the new regulations. According to President Anwar, these SROs are creating substantial obstacles for businesses by introducing measures that are perceived as unfair and overly burdensome.
The most contentious among these is SRO 350, which links a buyer’s ability to file tax returns with the compliance status of their suppliers. This measure has initiated a potential domino effect of non-compliance, posing a significant risk of bringing business operations across various sectors to a standstill.
LCCI’s leadership argues that these changes have arrived at a time when the business community is already navigating a complex array of economic challenges, such as inflation, currency devaluation, escalating energy costs, high-interest rates, and multiple development impact charges. These factors combined are seen as substantial hurdles to private sector growth and are complicating matters for those who diligently comply with tax obligations.
President Anwar emphasized that penalizing buyers for sellers’ failure to file sales tax returns is unjust. Instead, he suggested that the FBR should enhance its internal systems to prevent and penalize the issuance of fake and fraudulent invoices directly. This approach, he argued, would target the actual perpetrators of tax evasion without imposing undue hardship on compliant businesses, potentially driving them out of the formal tax system.
“The LCCI fully supports government efforts aimed at enhancing documentation and broadening the tax base. However, the measures currently being implemented are counterproductive, squeezing the lifeblood out of compliant taxpayers by restricting their business operations. This approach is detrimental to our stressed economy and the overall taxation system in Pakistan, as it discourages participation in the documented economy,” Anwar stated.
The LCCI president expressed hope that the Prime Minister would respond to the business community’s concerns by postponing the implementation of these SROs. He urged for an immediate suspension until comprehensive discussions with all stakeholders could be held, aiming for solutions that promote compliance without stifling economic activity.
This request from the Lahore Chamber of Commerce and Industry highlights the ongoing struggle within Pakistan’s business sector to balance regulatory compliance with economic viability, emphasizing the need for policies that support rather than hinder business growth in challenging economic times.
