Karachi, April 22, 2025 – The Pakistan Chemicals & Dyes Merchants Association (PCDMA) has submitted a detailed set of tax proposals for the upcoming 2025–26 federal budget, urging the Federal Board of Revenue (FBR) to revive the Final Tax Regime (FTR) specifically for commercial importers. The association emphasized that restoring this system would provide much-needed relief, simplify taxation, and strengthen trust between the government and the business community.
PCDMA Chairman Salim Valimuhammad, in collaboration with the association’s budget committee led by Umair Tariq, stressed the growing compliance burden on taxpayers. He argued that frequent audits, excessive documentation, and complex tax procedures discourage formal economic participation. The association stated that many importers are willing to comply with tax laws but are often hindered by limited technical know-how and the uncooperative attitude of tax officials.
A core demand in the proposal is the reintroduction of FTR for commercial importers, especially since they are still subjected to Additional Sales Tax (Value Addition Tax) without enjoying the audit exemption that was previously linked to it. PCDMA maintains that either the audit immunity should be reinstated or the extra tax should be eliminated to maintain fairness for importers.
Another major concern raised by PCDMA is the unequal treatment between commercial and industrial importers under Section 148 of the Income Tax Ordinance. The association highlighted that industrial entities often misuse their status to import goods meant for local sale while benefiting from lower tax rates, creating an unfair environment for commercial importers. In light of this, PCDMA either demands tax parity or a return to the FTR for commercial entities.
Addressing structural challenges, the association proposed lowering withholding tax on raw material supplies and abolishing outdated fees like the Rs. 500 WeBOC token, which importers now redundantly pay alongside the PSW fee. To improve liquidity, PCDMA suggested restoring 95% adjustability of output tax under Section 8B.
PCDMA also called for scrapping the Export Facilitation Scheme (EFS), citing its misuse and detrimental impact on legitimate importers. Instead, it urged enhancements in the regular refund system to aid genuine exporters. The association concluded by recommending capped customs duties of 5% on raw materials and streamlined tariff structures to combat under-invoicing and revenue losses.
Through these proposals, PCDMA aims to create a more balanced and supportive tax regime that fosters compliance, ensures equity, and drives economic growth.