Retailers push for tax reforms
Pakistan's organised retail sector on Friday urged the government to overhaul the current retail taxation structure in the upcoming Finance Bill 2025-26, highlighting the need for fairer policies to support compliant businesses and expand the tax base.
In an appeal to Federal Minister for Finance Muhammad Aurangzeb, the Chainstore Association of Pakistan (CAP) — representing over 150 Tier-1 retail chains — called for inclusive policymaking through structured consultation with the private sector. CAP said the budget presents a key opportunity to address long-standing disparities and bring undocumented retailers into the tax net without penalising formal players. The association expressed confidence in the government's commitment to economic revival. CAP underscored the contributions of integrated retailers to employment, commerce, tax revenue, and exports, despite their small share in the overall retail sector.
Currently, POS-integrated retailers contribute around 25-30% of turnover in taxes under various heads, while most of the sector remains either under-taxed or undocumented. CAP warned this imbalance has placed an unsustainable burden on documented businesses, forcing many to downsize or shut down. CAP Chairman Asfandyar Farrukh said strict enforcement actions and unresolved technical issues in the FBR-POS system have disrupted compliant retailers. The removal of GST concessions last year and the failure of the Tajir Dost Scheme due to poor planning worsened matters.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
11 hours ago
- Business Recorder
Finance minister lauds CCP's for ‘reducing pending court cases'
Federal Minister for Finance Muhammad Aurangzeb expressed satisfaction over the performance of the Competition Commission of Pakistan (CCP), saying the commission's had brought significant improvements, particularly in reducing the number of pending court cases. Addressing the Senate, the finance minister requested the chairman Senate Standing Committee on Finance and Revenue, to invite Dr Kabir Sidhu, Chairman CCP, for a detailed briefing to appreciate the true extant of reforms undertaken by the commission. He informed the house that over the past two years, the CCP's new management actively pursued litigation in various courts, which resulted in reducing the backlog of cases from 577 to approximately 300. Responding to a motion moved by Senator Mohsin Aziz, the minister emphasised that a transparent and robust regulatory framework is essential in a market-based economy to foster competition and ensure accountability. In this context, he highlighted CCP's recent performance as crucial and deserving of support. He shared that the CCP issued 11 major orders in the past year alone, imposing fines exceeding Rs1 billion. Of this amount, approximately Rs120 million has already been recovered. The inquiry process has been expedited, the issuance of show-cause notices has become more efficient, and the overall hearing mechanism has improved to ensure timely action against violators. The minister further stated that CCP's Cartels Department completed 20 inquiries during the current fiscal year, while the Office of Fair Trade finalised 13 investigations related to misleading advertisements and deceptive marketing. These investigations have led to the issuance of show-cause notices and the initiation of formal hearings, he said. He also informed the Senate about the establishment of a dedicated Market Intelligence Unit within the CCP, which proactively monitors market distortions, price manipulation, and other potential violations of competition law. The minister said that the unit has so far identified 170 potential violations across sectors such as banking, e-commerce, telecom, and real estate, with 28 inquiries already initiated. CCP tells Aurangzeb: 23 major actions taken against cartels and cos Highlighting the CCP's role in facilitating investment, he said that the commission Mergers Department approved 69 transactions during the current year, resulting completion of transactions worth $30 million in foreign direct investment (FDI). Moreover, the Exemptions Department granted 83 exemptions, helping to ease business operations. He added that a Centre of Excellence has also been established within the Commission to conduct research and data-driven analysis of various market sectors.
Business Recorder
14 hours ago
- Business Recorder
PM Shehbaz lauds FBR reforms as tax filers jump to 7.2mn
The number of income tax return filers in Pakistan has crossed 7.2 million by June 30, 2025, up from 4.5 million in the previous year — a significant increase of 60% attributed to the Federal Board of Revenue's (FBR) ongoing reforms and digitisation efforts. The development came to light during a review meeting on ongoing FBR reforms held under the chairmanship of Prime Minister Shehbaz Sharif on Wednesday, read a statement released by the Prime Minister's Office (PMO). During the meeting, it was shared that enforcement actions and other reforms by FBR have resulted in a historic 1.5% increase in the tax-to-GDP ratio in 2025 compared to 2024. It was reported that due to the faceless customs clearance system, the clearance time will be reduced from 52 hours to 12 hours within the next three months. PM calls for third-party validation of FBR reforms In the retail sector, tax collection on income increased by Rs455 billion by June 30, 2025, compared to 2024. This rise was attributed to the implementation of Point-of-Sale (POS) integration, alignment of retailer systems with FBR, and enforcement efforts. It was told that a specialised system has been introduced to allow for appeals within the faceless system, ensuring timely case resolutions through video links. Due to these measures, the weighted average tariff on imports has decreased by 2.16%, reducing raw material costs for industries and supporting the manufacturing sector, read the statement. It was learnt that international experts' recommendations will also be incorporated into tax reforms and the digitisation of various economic sectors. The meeting was also presented with additional proposals for FBR reforms. PM Shehbaz appreciated the efforts of FBR officials and staff involved in the reform process and directed that actionable targets with timelines be finalised and presented next week. The prime minister stated that while achieving targets is a positive sign, further effort is needed. He emphasised that FBR's digitisation has supported goal achievement, and steps must now be taken to make it a sustainable, permanent system. PM Shehbaz orders crackdown on tax evasion, under-invoicing PM Shehbaz instructed that additional enforcement measures be introduced to curb the informal economy. He also directed that a comprehensive roadmap be developed for the restructuring of FBR's Digital Wing, with a timeline established for achieving set objectives. The prime minister stressed that all stakeholders must be consulted and their input incorporated into the reform process. He also directed that the facilitation of businesses, traders, and taxpayers should be prioritised in implementing FBR reforms.
Business Recorder
14 hours ago
- Business Recorder
Strong start at PSX amid COAS assurance, KSE-100 up nearly 700 points
Positive sentiments prevailed at the Pakistan Stock Exchange (PSX) on Wednesday, as assurance from Field Marshal Asim Munir to the business community boosted investor confidence, with the benchmark KSE-100 Index gaining nearly 700 points during the opening minutes of trading. At 9:35am, the benchmark index was hovering at 140,082.55 level, an increase of 662.94 points or 0.48%. Buying was observed in key sectors including automobile assemblers, commercial banks, oil and gas exploration companies, OMCs, power generation and refinery. Index-heavy stocks including HUBCO, NRL, MARI, OGDC, PPL, POL, SNGPL and SSGC traded in the green. On Tuesday, PSX surged as investor sentiment strengthened. Confidence rose after a meeting between business leaders and Field Marshal Asim Munir coupled with the government's Senate majority win further eased political uncertainty. The benchmark KSE-100 Index surged by 1,202 points or 0.87% to close at 139,419.62 points. In a key development, Field Marshal Syed Asim Munir on Tuesday assured the country's business community of his full support for the economic growth of the country, according to a FPCCI statement on Tuesday. During the meeting, COAS Munir instructed the Federal Board of Revenue (FBR) to have dialogue with businessmen over arrest powers, penalties. 'The business community is immensely thankful to Field Marshal Asim Munir for immediately directing that the new provisions; particularly those added under Sections 37A and 37B of the Sales Tax Act 1990, of arrest and detention; be held in abeyance; and, for instructing the FBR to enter meaningful and solution-oriented dialogue with stakeholders and address their concerns,' the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) statement read. Internationally, a rally in Japanese shares led Asian markets on Wednesday after President Donald Trump announced a trade deal with Japan and fuelled hopes of more to come, tempering the disappointment from US earnings that highlighted the drag from higher tariffs. Trump late on Tuesday said a trade deal with Tokyo will include Japan paying a lower 15% tariff on shipments to the US. It followed an agreement with the Philippines that will see the US collect a 19% tariff rate on imports from there. Japan's Nikkei jumped 2.6% on Wednesday as shares of automakers surged on news that the deal lowers the auto tariff to 15%, from a proposed 25%. Mazda Motor rallied 17% while Toyota Motor jumped 11%. EUROSTOXX 50 futures rose 0.8%, while Wall Street futures were up about 0.1%. In another positive development, US and Chinese officials will meet in Stockholm next week to discuss an extension to the August 12 deadline for negotiating a trade deal, Treasury Secretary Scott Bessent said. Chinese blue-chips edged up 0.3% and Hong Kong's Hang Seng index gained 0.5%. MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.6% This is an intra-day update
