Karachi, Lahore hit by strike against ‘anti-business' tax measures
In the Finance Act, the government expanded the Federal Board of Revenue (FBR) powers with Sections 37A and 37B, which empower FBR officials with arbitrary arrests; Section 21(S), which imposes harsh penalties on cash transactions of Rs200,000 or more; mandatory digital invoicing under SRO 709; and the imposition of e-Bilty under Section 40(C).
July 19 strike call: govt invites trade leaders for talks
The business community termed these measures 'anti-business' and announced a nationwide strike on July 19 (today). They also called for the restoration of the Final Tax Regime for exporters.
However, the business community later appeared divided, with the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) postponing the protest following talks with the government, while the Karachi Chamber of Commerce and Industry (KCCI) vowing to go ahead with the strike.
It is for the first time that a complete strike has been witnessed in Karachi's New Sabzi Mandi.
The KCCI spearheaded the strike on Saturday, backed by the Lahore Chamber of Commerce & Industry (LCCI), Hyderabad Chamber of Small Traders & Small Industry (HCSTSI), and others. Meanwhile, Pakistan's capital Islamabad reportedly remained largely affected.
United Goods Transport Alliance Patron in Chief Malik Shabbar Khan told Business Recorder that two big transport alliances in the country, including United Goods Transport Alliance and Pakistan Goods Transport Alliance, had supported the KCCI.
'Today we have stopped all bookings, but goods transport takes five days to come to a halt,' Khan said.
'What's more, we will be affected by this black law. Let me give you an example, when a goods truck goes to Karachi from Peshawar and comes back, it has to pay around Rs100,000 in terms of tolls and various challans. We talked to the KCCI leaders that if the demands are not fulfilled, we can go on strike once or twice a week. It will be decided later after meeting with the business community.'
Veteran fruits merchant Haji Mehboob Shair said, 'It is for the first time in the history of the country that the complete strike has been witnessed in Sabzi Mandi'.
According to Shair, a large number of trucks loaded with fruits and vegetables come to the Sabzi Mandi daily, but they did not come on Saturday.
Meanwhile, main markets and commercial areas in Karachi remained closed till filing of this report at 3pm, while small number markets in Clifton, Landhi and other areas remained open in the metropolitan city.
Finance Act 2025 tightens tax rules for businesses, filers
KCCI president Muhammad Jawed Bilwani briefed the media late Friday night with other business leaders about a meeting with Special Assistant to the Prime Minister (SAPM) on Industries Haroon Akhtar Khan attended by a number of chambers via Zoom.
'Business leaders were given no surety in writing,' he said, announcing the KCCI decision to proceed with the strike.
LCCI president Mian Abu Zar Shaad stated that Lahore chamber had decided to join the strike in solidarity with the broader business community.
Hyderabad traders also supported the strike call, with commercial areas of the city, including Saddar Bazaar, Resham Bazaar, Anaj Mandi, Market Tower, and others remaining closed during the day.
FPCCI postponed the strike - a call that was followed by chambers and associations of Rawalpindi, Sialkot, Gujranwala, Quetta, Khanewal, Multan, Bajaur and others.
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However, the IMF and World Bank in the past kept mum, as they were party to portraying all-good 'projection saga' during the era the Uncle Sam needed Pakistan; first for dismemberment of the then USSR and later for imposing New World Order in the name of 'War on Terror' (sic). Back in 1995, the then Prime Minister, Nawaz Sharif, claimed during a meeting, held in Washington on October 21, 2015, with that time Managing Director of IMF, Ms. Christine Lagarde, 'We have achieved the highest tax-to-GDP ratio and Pakistan's economy has been stabilising due to prudent policies of my government'. This claim was diametrically opposite to what was stated by the then Auditor General of Pakistan (AGP) in his report making 'astonishing disclosure' that the tax-to GDP ratio of FBR 'reached its lowest level on the conclusion of the World Bank funded Tax Administration Reform Project (TARP)'. It was strange that in the presence of report of AGP, our Prime Minister, his finance minister and other 'financial experts' were trying to convince the IMF that 'all is well'. Nawaz Sharif on assuming the power for the third time as prime minister gave unprecedented tax waivers and concessions to the non-filers and tax evaders—even then, his amnesty schemes miserably failed. It could only yield Rs. 1.3 billion! In these columns efforts have been made to explain reasons for the poor tax collection. However, the citizens for the last many decades rightly raise the question, 'Do you know how rulers play havoc with the taxpayers' money'? They insist that we must calculate cost to national exchequer in providing tax-free perquisites and benefits to indomitable militro-judicial-civil-complex and public office holders in the form of palatial residences, army of servants, expensive cars, golf courses, rest houses etc. They call on first ending this colossal wastage of funds and money spent on fruitless foreign tours, state banquets etc. and then debate the issue of low tax-to-GDP ratio. Although in these columns a detailed roadmap for reforming the existing tax system and raising taxes to the level of Rs 30 trillion is presented, the self-styled stalwarts and wizards sitting in Ministry of Finance (MoF) and FBR want 'advice' and 'assistance' from IMF and World Bank despite. Needless to say, they miserably failed in the past to reform tax system. 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In contrast, in Pakistan the major portion of revenue comes from indirect taxes, particularly taxes on international trade and domestic consumption, while direct taxes have a pathetic share [4.3 percent of GDP in FY 2024 that included 50 percent pass through withholding taxes]. The extending of extraordinary tax-free benefits to the powerful classes, failure to tap actual tax potential, indulgence in wasteful expenditure and funding of inefficient public sector enterprises are continuously pushing the country to more and more expensive borrowings — both internal and external. The unrelenting huge fiscal deficit and rising quantum of debt are the major source of macro-economic imbalances over the last many years. Making the things worse, the growth-retarding tax policy is playing havoc with stagnant economy. Sole stress on oppressive indirect taxes is not only widening the rich-poor divide, but has also failed to enable Pakistan to reduce even revenue deficit—we are not mobilising enough to meet current expenditure. The question is: where does the fault lies? Even the World Bank-IMF funding and 'guidance' has failed to bring desired results. Who is responsible for the prevailing pathetic state of affairs? Our debt burden has increased monstrously, fiscal deficit is simply unmanageable, inflation is crushing the poor, taxes are evaded and avoided by the rich and whatsoever is collected is wasted by the rich and mighty. What a tragedy that the elites (ashrafiya) not only evade taxes but also thrive at taxpayers' expense. They are the de facto beneficiaries of all the State's resources—generated mainly by the suppressed land-less tillers and diligent industrial workers. Pakistan is not a poor country — the State's kitty is empty because of colossal wastage of taxpayers' money on unproductive expenses (perks and perquisites of ruling elites) and non-exploitation of vital natural resources as well unwillingness of the rich to pay income tax. The absentee landowners (they include mighty generals who have been allotted State lands under one pretext or the other during the last many decades) have been resisting proper personal taxation on their enormous income and wealth. An unholy anti-people trio of indomitable militro-judicial-civil complex, inefficient politicians and greedy businessmen—controlling and enjoying at least 90 percent the State resources—contribute below 1 percent towards national revenue collection but is beneficiary of 90 percent of available national resources. The existing exploitative, rotten, regressive, ill-directed and unfair tax system is rapidly widening the existing divide between the rich and the poor. The lack of political will to tax the rich and the mighty remains our dilemma — not scarcity of resources. Equity demands higher taxes from those who have higher income and wealth, but in Pakistan since the first martial law all fiscal policies have decreased tax burden on the rich and increased its incidence on the poor. Pakistan's tax-to-GDP ratio at FBR level alone can rise to 20 percent, if we bring 5 million ultra-rich into tax net, heavily tax speculative transactions in real estate (it will promote construction industry as prices of land will come down), tax all speculative deals at stock exchanges (it will induce genuine investment in companies, withdraw all tax-free perquisites given to militro-judicial-civil complex and public office holders and confiscate untaxed assts. The existing tax system is highly unjust. It protects the rich and mighty having monopoly over economic resources. The common people are paying an exorbitant sales tax of 18 percent (in fact 35-55 percent on finished imported goods after mandatory value addition and income tax at source) on essential commodities as well as Rs 80 per litre as petroleum and environment levies on petrol/diesel but the mighty sections of society such as big industrialists, landed classes, generals and bureaucrats are paying no wealth tax/income tax on their colossal assets/incomes. Our present tax revenue potential, if monstrous black economy is dealt with iron hand, is not less than Rs 30 trillion provided that the existing tax base is made wider and equitable, black economy is discouraged, tax machinery is completely overhauled and exemptions and concessions available to some privileged sections of society are withdrawn. However, this is not possible without simplification of the tax system [FBR, tax potential & enforcement—I, Business Recorder, March 5, 2021, and FBR, tax potential & enforcement—II, Business Recorder, March 7, 2021]. Copyright Business Recorder, 2025
