Traders demand withdrawal of new tax ordinance

Business Recorder

05-05-2025

KARACHI: Business and industrial community has demanded immediate withdrawal of the Ordinance and called upon the government to convene parliamentary debate with participation from elected representatives and industry stakeholders and address the growing anxiety within the business community, warning that failure to do so will have severe negative repercussions on the economy.
President Karachi Chamber of Commerce and Industry (KCCI) Muhammad Jawed Bilwani, while expressing grave concern over the recently promulgated Tax Laws (Amendment) Ordinance, 2025, stated that this Ordinance, issued without due consultation with stakeholders and in the absence of parliamentary debate, poses severe implications for the business community and rule of law.
Bilwani strongly objected to the introduction of Sections 138 (3A) and 140 (6A) of the Income Tax Ordinance, which override judgments of superior courts and make disputed tax liabilities immediately recoverable, even when relief has been granted by judicial forums.
This directly undermines the sanctity of court decisions, erodes taxpayers' constitutional right to due process, and promotes a coercive tax regime.
Furthermore, he said the insertion of Section 175C, allowing Inland Revenue officers to be posted at business premises under vague conditions, breaches privacy and creates an environment of harassment and intimidation.
The power to place officials within private enterprises, without transparent criteria or judicial oversight, threatens operational independence and sends a chilling message to investors and entrepreneurs, he added.
He was of the view that the amendments to the Federal Excise Act, 2005, granting wide powers for enforcement and deputation of federal or provincial officers for monitoring, exacerbate this intrusion. The inclusion of loosely defined offences such as 'affixing counterfeit tax stamps' leaves room for arbitrary interpretation and misuse.
President KCCI demanded immediate withdrawal of the Ordinance and called upon the government to convene parliamentary debate with participation from elected representatives and industry stakeholders.
'We reiterate our commitment to fair taxation and documentation of the economy but reject any legislative measure that bypasses due process and threatens legitimate businesses under the pretext of enforcement.'
He urged the President and the Ministry of Law and Justice to uphold constitutional principles and engage in dialogue rather than promulgating authoritarian ordinances that risk damaging Pakistan's already fragile business climate.
The Pakistan Chemicals & Dyes Merchants Association (PCDMA) has expressed deep concern over the implementation of the Income Tax Laws (Amendment) Ordinance 2025, describing it as a harsh and unjust measure.
PCDMA has appealed to the President of Pakistan, Asif Ali Zardari, and the Ministry of Law & Justice to withdraw the ordinance and address the growing anxiety within the business community, warning that failure to do so will have severe negative repercussions on the economy.
PCDMA Chairman Salim Valimuhammad and Danish Saleem, Advisor to the Subcommittee for Sales Tax and Income Tax, highlighted that the ordinance was issued without consultation with stakeholders and without holding a parliamentary debate on this critical legislation. This has not only shaken the confidence of the business community but has also undermined the supremacy of the law.
Valimuhammad raised serious concerns over Sections 138(3A) and 140 (6A) of the Income Tax Ordinance, which render judicial relief ineffective by making disputed tax liabilities immediately recoverable, even when courts have granted relief. This undermines taxpayers' right to fair adjudication.
'Allowing inland revenue officers to be stationed at business premises is not only an invasion of privacy but will also lead to harassment of taxpayers.'
The PCDMA Chairman appealed to President Asif Ali Zardari and the Ministry of Law & Justice to withdraw the Income Tax (Amendment) Ordinance 2025 and refrain from any anti-business measures to ensure uninterrupted commercial activity. He emphasised that only a thriving business environment can generate revenue for the government.
He further warned that if government policies force businesses to shut down, the state itself will suffer massive revenue losses.
The Korangi Association of Trade and Industry (KATI) has categorically rejected the newly introduced Tax Ordinance 2025, labelling it as anti-business, unconstitutional, and detrimental to investment.
KATI President Junaid Naqi strongly condemned the ordinance, warning that the sweeping powers granted to tax authorities amount to 'economic terrorism.' He said the ordinance empowers the Federal Board of Revenue (FBR) to take extreme measures such as freezing bank accounts, seizing property, and sealing factories immediately after a court ruling— without prior notice or warning to the businesses involved.
'This ordinance is a blatant violation of the constitution, the judiciary, and the basic freedom of doing business in Pakistan,' he asserted. 'Instead of fostering trust and confidence in the business community, the government is creating an environment of fear and uncertainty.'
The KATI chief highlighted that the amendments to the Income Tax Ordinance 2001 and the Federal Excise Act 2005 permit FBR officers to be stationed within factories and business premises, where they can directly monitor production, stock, and the movement of goods. He described this as an extreme intrusion into private enterprise and likened it to 'spying in the name of economic oversight.'
Naqi warned that such draconian measures would not only harm the country's struggling economy but also discourage future domestic and foreign investment. 'This is not legislation for the benefit of a person or a department— this seems like a well-orchestrated move against the entire business community.'
He called on the government to immediately revoke the ordinance and engage with all stakeholders before introducing any such drastic reforms.
Copyright Business Recorder, 2025