Karachi, June 23, 2025 – The Pakistan Business Council (PBC) has strongly criticized the sweeping and excessive powers proposed to be granted to the Federal Board of Revenue (FBR) in the Finance Bill 2025, terming them “draconian” and detrimental to the investment climate in the country.
In a detailed letter addressed to Finance Minister Muhammad Aurangzeb, the PBC acknowledged the strides made by the government in stabilizing the economy, citing declining inflation, reduced borrowing costs, improved fiscal discipline, a surplus current account, and the approval of two IMF tranches. The PBC credited this turnaround, in large part, to the commitment and sacrifice of the formal business sector, which it said contributed disproportionately to the national tax collection in the FY2024-25 budget.
However, the PBC expressed grave concern over the new FBR powers being proposed, arguing that they risk reversing hard-won progress. “While we supported the government in stabilizing the economy, we are alarmed by the Finance Bill’s provisions which confer unchecked powers upon the FBR,” the PBC stated.
The letter detailed several controversial sections of the Finance Bill:
• Section 11E allows the FBR to assess and recover taxes based merely on suspicion, without completing proper investigations.
• Section 14AE gives FBR the authority to seize business premises and assets arbitrarily, without sufficient legal safeguards.
• Section 32B permits private auditors to act with quasi-legal status, raising concerns of overreach and misuse.
• Section 33 proposes a 10-year imprisonment and a Rs10 million fine for vaguely defined “tax fraud,” potentially penalizing genuine business errors.
• Section 37AA allows arrest without warrant based solely on suspicion, which, according to the PBC, paves the way for harassment.
• Section 37B allows 14-day detention of businesspersons, subject to judicial extension.
• Section 58C breaks the client-advisor confidentiality by allowing FBR access to tax advisors’ offices where discrepancies are suspected.
The PBC emphasized that these sweeping powers do not distinguish between compliant major taxpayers and the non-documented informal sector. “It is disheartening that industries contributing 60% of taxes while making up only 18% of GDP are being lumped in with those who evade taxes altogether,” the letter noted.
Pakistan, the PBC pointed out, already suffers from the lowest investment-to-GDP ratio in South Asia. Empowering FBR officials with unchecked powers, the council warned, will further damage investor confidence and hinder industrial growth.
The PBC had previously submitted strategic recommendations urging the government to focus on increasing the tax net, encouraging exports, and supporting domestic manufacturing. Instead, the Finance Bill appears to prioritize enforcement through intimidation.
Concluding its letter, the PBC requested an urgent meeting with the Finance Minister to address these issues. “We strongly urge the government to reconsider these proposals and avoid creating an anti-business environment under the guise of expanding FBR authority,” the letter stated.