The business community articulates dissatisfaction on amendments to tax legislation.
The business community has voiced significant apprehension regarding the enactment of the Tax Laws (Amendment) Ordinance, 2025, deeming it a direct infringement on business autonomy and detrimental to investor confidence.
In a statement, Usman Shaukat, President of the Rawalpindi Chamber of Commerce and Industry (RCCI), expressed vehement objection to the extensive powers conferred upon the Federal Board of Revenue (FBR) by the ordinance.
“We unequivocally oppose the capricious and coercive measures instituted by this Ordinance,” stated Shaukat, adding, “permitting tax officials to be stationed at markets and business establishments constitutes a blatant violation of business autonomy and will result in heightened harassment under the pretext of documentation and compliance.”
The Ordinance empowers the FBR to recover tax liabilities by directly taking monies from a taxpayer’s bank account if their appeal is rejected by the High Court or dismissed by the Supreme Court. This supersedes the previously established protocol under Sections 137(2) and 138(1) of the Income Tax Ordinance, 2001, which mandated the delivery of distinct notices prior to any recovery action.
“These coercive measures, enacted despite a High Court ruling, constitute a significant threat to the right of appeal, particularly when imposed prior to the Supreme Court’s decision,” Shaukat stated.
The RCCI’s statement released on Monday emphasised the legal ambiguities included in the Ordinance, specifically on the uncertainty of whether the FBR will expeditiously repay any recovered sums if the case is ultimately resolved in favour of the taxpayer.
Furthermore, the Chamber denounced the clause permitting tax officials to be stationed at commercial establishments to oversee everyday activities, deeming it excessive, intrusive, and detrimental to corporate confidence.
The RCCI has demanded the prompt retraction of the Ordinance and has encouraged the government to engage in consultation with stakeholders prior to enacting legislation with significant implications for the business community.
The Tax Laws (Amendment) Ordinance, 2025, was enacted by the President of Pakistan on May 2, 2025. It seeks to rectify pressing legal, administrative, and enforcement deficiencies in the tax system and proposes only three meticulously defined amendments.
A press release from the Ministry of Finance on Monday indicated that the initial change pertains to Sections 138(3A) and 140(6A), addressing the timely payment of tax demands despite the granting of a stay or the pendency of an appeal.
The second amendment relates to the assignment of FBR personnel at commercial establishments under Section 175C. This implements procedures for the revenue oversight of premium services and sectors functioning beyond the current sales tax framework.
The third amendment pertains to the visits of Federal Board of Revenue (FBR) officials to private sector industries that are not now subject to FBR oversight. The visits of FBR officers and officials to commercial establishments involved in taxable activities—whether generating taxable revenue or providing taxable products and services—are meticulously governed by a set of regulations and STGOs.
