SMAP Roils Over Proposed Tax Regime Shift in Pakistan

SMAP Roils Over Proposed Tax Regime Shift in Pakistan

Karachi, June 23, 2024 – The Salt Manufacturers Association of Pakistan (SMAP) has become the latest industry group to voice strong opposition to a key provision in the recently unveiled federal budget.

The proposal in question involves the removal of exports from the Fixed Tax Regime (FTR) and their subsequent inclusion under the standard income tax regime.

FTR Removal Seen as Disastrous for Exports

SMAP Chairman Qasim Yaqoob Paracha expressed deep concern about the proposed changes, warning that they would be “disastrous” for Pakistan’s export sector. He emphasized the need to reject the proposal immediately to avoid exacerbating existing economic challenges.

Concerns about Increased Costs and Uncertainty

In a statement released by SMAP, Mr. Paracha highlighted two primary anxieties associated with the proposed shift. First, he expressed concern about a potential rise in harassment and corruption by tax authorities under the standard tax regime. Second, he warned that the change would create an environment of uncertainty for businesses, potentially discouraging investment and hindering growth.

Rejection of “Draconian Measures”

SMAP went on to categorically reject the proposed tax changes, labeling them “draconian measures.” Mr. Paracha stressed the severe difficulties businesses would face if these measures were implemented, potentially jeopardizing their very survival.

Call for Reconsideration and Dialogue

The association urged the government to reconsider these “detrimental changes,” emphasizing their potential negative impact. They warned that if the proposal remains on the table, SMAP, in collaboration with other export industries nationwide, would be forced to “explore all available avenues” to challenge it.

Advocacy for Growth-Oriented Policies

SMAP reaffirmed its commitment to advocating for policies that promote sustainable growth for Pakistan’s export-driven businesses. The association urged policymakers to prioritize dialogue and consensus-building with stakeholders when formulating future tax reforms.

The strong opposition voiced by SMAP adds to the growing chorus of discontent from various sectors regarding the proposed tax changes. The government faces a critical task in the coming days as it weighs these concerns and seeks solutions that balance revenue generation with the need to foster economic growth and a stable business environment.