HCSTSI says concerned at FBR's ‘excessive' powers
He stated that these amendments, although introduced under the guise of improving tax collection, could in reality open a new chapter of harassment and uncertainty for Pakistan's business community. The changes stand in contradiction to the principles of justice, due process, and economic freedom.
Chamber President Saleem Memon pointed out that under the newly inserted Sections 138(3A) and 140(6A) of the Income Tax Ordinance, 2001, if a matter is adjudicated by a higher court, the tax liability will become immediately enforceable. FBR will then have the authority to freeze bank accounts and recover the dues without prior notice or legal proceedings. This is an alarming provision that undermines the constitutional and legal rights of taxpayers, depriving them of the opportunity to defend, appeal, or clarify violating fundamental principles of natural justice.
He further highlighted that Section 175C grants FBR or the Chief Commissioner the authority to deploy officers at any business premises, including shops or factories, to monitor the production of goods, services, or stock. This, he stated, is a form of coercion and interference in business operations. The physical presence of tax officers will not only create a hostile environment but will also instil fear and mistrust among entrepreneurs, ultimately disrupting routine commercial activities.
Expressing reservations about the amendments to the Federal Excise Act, 2005, Saleem Memon noted that while the criminalization of counterfeit stamps, barcodes, and labels may be justified in principle, it must also be recognized that in many cases, such errors can be unintentional caused by technical glitches, printing issues, or logistical challenges. Such unintended mistakes could easily be misused by officials as grounds for excessive action and harassment.
The HCSTSI president also criticized the manner in which these sweeping changes were introduced. He lamented that the amendments were enforced immediately through Ordinance without parliamentary debate, stakeholder consultation, or committee review. This lack of democratic process and transparency is deeply disappointing and detrimental to the trust between the government and the business community.
In light of these developments, Muhammad Saleem Memon made a strong appeal to the Prime Minister of Pakistan, the Federal Minister of Finance, and the Chairman of FBR to immediately review these amendments and establish clear guidelines to restrict the misuse of authority by FBR officials. He proposed the following key measures to restore balance and fairness:
A minimum 15-day written notice must be mandatory before freezing any bank account to give the taxpayer an opportunity to clarify or respond.
Deployment of tax officers in business premises should be subject to judicial approval to prevent arbitrary actions. An independent grievance redressal cell must be established to address business community complaints in a timely and transparent manner.
No new regulations should be implemented without the prior consultation of stakeholders, particularly representatives of small traders and industries.
He alarmed that ignoring the legitimate concerns of the business sector will severely erode confidence across the country, damaging not only the economic environment but also the government's own revenue collection targets. He added that instead of burdening existing taxpayers, the government should focus on expanding the tax net to include untaxed segments of the economy.
Chamber President concluded by urging the federal government to reconsider these amendments urgently and revive the consultation process with the business community to build a fair, transparent and progressive economic environment in Pakistan.
Copyright Business Recorder, 2025
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