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Express Tribune
22-05-2025
- Business
- Express Tribune
Businessmen demand EFS restoration in original form
Listen to article Karachi Chamber of Commerce and Industry (KCCI) President Jawed Bilwani, while highlighting the crucial role played by the Export Finance Scheme (EFS) in sustaining Pakistan's exports, emphasised that the scheme must continue in its original status and position, which was before the presentation of federal budget for fiscal year 2024-25. In a statement, he called for allowing local purchases under Section 880 (1)(b) of SRO 957(I)/2021 (local input goods liable to sales tax to be supplied against zero-rated invoices) to ensure liquidity, competitiveness and formalisation across the entire value chain, as recommended by the Inter-Ministerial Committee. "The EFS is critical to ensuring continued export-led growth and trade balance improvement," he said. "Despite facing the highest regional costs of electricity, gas, water and interest rates, Pakistan's exports have shown remarkable resilience, a feat largely attributable to the support provided by the EFS. Preserving and expanding this scheme is essential for maintaining export competitiveness." Bilwani highlighted that the EFS was strategically developed by consolidating all previous schemes under one umbrella, which minimised documentation requirements and facilitated ease of doing business through a fully automated system integrated with Web-based One Customs (WeBOC) and the Pakistan Single Window (PSW). "Much of the quality yarn and fabric used by Pakistan's apparel exporters is not produced domestically and the local alternatives, where available, are often of lower quality and higher cost," he pointed out. "The imported yarn used by garment manufacturers is of superior quality, giving exporters a competitive edge in global markets." The value-added apparel sector makes up to 70% value addition to export goods and requires uninterrupted access to high-quality raw material. "Countries like Bangladesh and Vietnam are completely reliant on imported raw material for their export-oriented textile sectors and their success is a proof of effectiveness of such models when supported by robust facilitation mechanisms," he said. Bilwani warned that policy changes announced in the last federal budget, particularly the removal of zero-rating for local supplies, disrupted the balance between imported and local raw material. "Currently, while the imported raw material is exempt from taxes, local inputs are subject to 18% sales tax with delayed and costly refunds," he said. "This creates a structural imbalance, discouraging local sourcing and impacting SMEs across the value chain." In view of the IMF's reservations about fully restoring the zero-rating facility, he proposed a pragmatic middle path such as adopting a negative list to restrict high-risk imports under the EFS while preserving the broader scheme's facilitative framework.
Business Recorder
16-05-2025
- Business
- Business Recorder
Budget 2025-26: KCCI urges govt to expand tax net, targets 4.6mn unregistered entities
Frustrated by the rising tax burden on already compliant businesses, Pakistan's business community has called on the government to expand the tax net by bringing 4.6 million identified but unregistered industrial and commercial entities into the tax net, instead of imposing additional duties on the existing taxpayers. The demand was made through budget proposals submitted by the Karachi Chamber of Commerce and Industry (KCCI) to the Ministry of Finance ahead of the federal budget for fiscal year 2025-26. KCCI noted that several businesses and individuals remain outside the tax net, despite being traceable through official data such as electricity and gas connections, vehicle and property registrations, travel and banking records. This gap results in an unfair tax regime, KCCI argues, overburdening compliant taxpayers and contributing to revenue shortfalls. 'For instance, data from the National Electric Power Regulatory Authority (Nepra) till June 2024, indicates that there are 4.6 million commercial and industrial electricity connections, while only 396,383 entities are registered for sales tax.' Budget FY26: Sindh CM takes step aimed at finalising proposals, allocations 'This indicates the untapped potential within the system,' the business chamber highlighted in its proposals. KCCI urged the government to utilise available datasets, such as electricity records from Wapda and KE, to identify and register these entities. The chamber was of the view that integrating them into the tax net would enhance revenue collection, reduce reliance on punitive measures like the Further Tax, and promote equity and compliance within the tax system. As of November 6, 2024, the Federal Board of Revenue (FBR) had received 5.215 million tax returns, showing a 76% year-on-year increase from 2.959 million filed during the same period in 2023. However, despite this improvement in compliance, the FBR collected Rs9,309 billion during July-April FY2024-25—falling short of its Rs10,130 billion target by Rs821 billion. The government has already revised the FBR's annual target downward, from Rs12,913 billion to Rs12,334 billion for the ongoing fiscal year. PCDMA submits budget proposals to FBR Nonetheless, a shortfall exceeding Rs600 billion is projected for the full year. Provisional figures suggest that the tax collection target for the upcoming FY2025-26 will be raised to around Rs14,300 billion, making it imperative for the government to broaden the tax base. In addition to urging a crackdown on unregistered taxpayers, KCCI recommended targeted tax relief and policy adjustments to support growth across various sectors. Proposals include introducing reforms to revive the real economy, reinstating zero-rating for local supplies under the Export Facilitation Scheme (EFS), and abolishing taxes on shrimp broodstock to support seafood exports. The chamber also proposed reinstating zero-rating for gold, permitting gold exports with at least 20% value addition, and removing motorcycle and auto parts from the third schedule, classifying them as intermediate goods. Oil and gas sector tax proposals for Federal Budget 2025-26 For the tea industry, KCCI called for a review of existing policies and measures to curb revenue leakages. According to KCCI, these recommendations, if implemented, could ease the tax burden on compliant businesses, incentivise growth in key sectors, and help the government meet its ambitious revenue targets for the upcoming fiscal year. The federal government will present the next fiscal year's budget on June 2.
Express Tribune
09-05-2025
- Business
- Express Tribune
Govt urged to ease the tax burden
Listen to article Karachi's business community on Thursday urged the government to slash policy rates and a reduction in taxes in the upcoming 2025-26 budget. A pivotal online meeting in this regard took place between Haroon Akhtar Khan, Special Assistant to the Prime Minister, and the Karachi Chamber of Commerce and Industry (KCCI) through Zoom. The meeting aimed to address several pressing issues concerning Karachi's industrial sector, including electricity supply, water provisions, rising gas levies, tax collection problems, and the challenges faced by exporters. During the meeting, the business community said that they were facing higher electricity rates and even higher taxes which should be reduced to ensure a competitive business environment. They also raised the issue of undue interference by Federal Board of Revenue (FBR) officials. They commented that FBR officials were key hurdles in their business and were allegedly involved in the harassment of the business community. They called for action to be taken against the FBR. During the discussion, Khan emphasised the formation of committees to tackle these issues, with the Karachi Chamber of Commerce playing a significant role in these initiatives. The committees were set up following the Prime Minister's directives to ensure a focused and systematic approach to resolving the concerns of local chambers and industrialists. "The goal is to resolve all the issues that are hindering the growth of our industries," said Haroon Akhtar Khan. In line with the Prime Minister's vision, Khan reiterated the urgency of boosting industrial growth across Pakistan. He highlighted that the ongoing tariff war presents a unique opportunity for Pakistani industries to compete globally. "The Prime Minister has directed us to revive local industries and significantly enhance exports," he added. A significant update came from the Special Assistant, who reported that due to the Prime Minister's efforts, the policy rate has been reduced to 11%, a move expected to ease the financial burden on businesses. However, Shawal Malik from KCCI pointed out a critical challengethe aging and deteriorating electricity infrastructure in Karachi, which is leading to increased production costs for local businesses. Despite these challenges, PM's Special Assistant reassured the Karachi Chamber of Commerce and Industry that the government is fully committed to resolving these issues and supporting Karachi's industrial sector.
Business Recorder
07-05-2025
- Business
- Business Recorder
KCCI and RCCI unite to tackle economic challenges
KARACHI: In a powerful show of unity, two of Pakistan's most influential business chambers, the Karachi Chamber of Commerce and Industry (KCCI) and the Rawalpindi Chamber of Commerce and Industry (RCCI), have joined forces to confront the escalating economic challenges faced by the business community. During a high-level meeting held at the Karachi Chamber of Commerce and Industry on Tuesday, both chambers not only expressed strong opposition to the controversial Tax Ordinance (Amendment) 2025 but also called for the formation of a national alliance of chambers under Inter-Chambers Harmony Committee to amplify their collective voice and demand urgent pro-business reforms from the government. This consensus was reached during the visit of RCCI delegation to KCCI to strengthen ties and chart a unified path forward. The meeting was attended by Chairman Businessmen Group (BMG) Zubair Motiwala, President KCCI Muhammad Jawed Bilwani, Senior Vice President KCCI Zia ul Arfeen, Vice President KCCI Faisal Khalil Ahmed, and members of the KCCI Managing Committee. Representing Rawalpindi Chamber were President RCCI Usman Shaukat, Senior Vice President RCCI Qazi Farooq, Vice President RCCI Fahad Barlas, Group Leader RCCI Sohail Altaf, and Executive Committee Members. Chairman BMG Zubair Motiwala, who joined the meeting via Zoom, emphasized that fragmentation among chambers has historically undermined their influence. 'We must raise a unified voice and work collectively to address the widespread challenges the business community is facing', he stressed. Referring to controversial government directives such as SRO709, SRO350, and the Tax Ordinance (Amendment) 2025, Motiwala warned that such policies are creating an environment of harassment and uncertainty. He proposed the formation of an Inter-Chambers Harmony Committee, comprising representatives from all chambers nationwide, to hold regular monthly meetings to deliberate on common economic issues. 'Nearly 80 percent of the budget recommendations from all chambers highlight similar concerns. Instead of submitting them individually, we must consolidate our voices through this committee and forcefully present a unified front to the government,' he suggested. President KCCI Jawed Bilwani, reflecting on his longstanding relationship with RCCI spanning over two decades, echoed the need for unified advocacy. He highlighted critical national economic issues such as soaring interest rates, excessive taxation, rising energy costs, and Pakistan's deteriorating international reputation. "Unless we act in solidarity, these issues will persist and worsen under continued anti-business policies", he warned, citing the Tax Ordinance (Amendment) 2025 as a clear example of such policies. Bilwani also voiced concerns over the economic impact of Pakistan-India tensions, which are raising doubts among foreign buyers about the timely fulfillment of export orders. He underscored the alarming flight of capital driven by regressive tax policies, noting that thousands of businesses have been registered in the UAE in the past year alone. 'The government's claim of creating a digital, faceless FBR contradicts its actions. Empowering FBR officials to enter business premises will only increase harassment and corruption, negating efforts to create a tax-friendly environment', he asserted. RCCI President Usman Shaukat affirmed that the challenges being faced are shared by all chambers, necessitating a collective and strategic response. 'The business community must act together. The government thrives on a divide-and-rule approach; we must break this pattern by collaborating consistently,' he emphasized. He called for a Charter of Economy that includes measures to rebuild investor confidence, reverse capital flight, and encourage the return of skilled professionals. 'Nationalism has to be exhibited to counter despair and negativity with constructive action,' he added. While acknowledging some improvements in economic indicators such as rising remittances, declining inflation, and a recent 1 percent cut in interest rates, Usman Shaukat maintained that the cost of doing business in Pakistan remains unacceptably high due to persistently steep taxes, energy prices, and borrowing costs. 'A united declaration from all chambers rejecting the Tax Ordinance Amendment 2025 is critical. RCCI strongly protests this ordinance, which introduces coercive tactics and reflects a mindset that continues to squeeze existing taxpayers instead of broadening the tax base', he stated. He appreciated the evolving role of the Special Investment Facilitation Council (SIFC), noting that its new focus on domestic investors alongside foreign investment is a welcome development. President RCCI invited KCCI's leadership and Managing Committee to participate in RCCI's flagship All Pakistan Chambers Conference, aimed at in-depth deliberations on national economic issues and future strategies. Group Leader RCCI Sohail Altaf described the meeting as significant, marking the convergence of Pakistan's two oldest and most influential chambers. He lamented that while the problems faced by the business community are well known, they remain unresolved due to disunity and lack of collective pressure on policymakers. 'The business community must set aside minor differences and act as one. Our survival depends on unity, not individual agendas', he remarked. Sohail Altaf insisted that the business community must remain apolitical and demand resolution of issues based solely on merit, both within government structures and apex bodies like the Federation of Pakistan Chambers of Commerce and Industry (FPCCI). 'The future of Pakistan hinges on industrialization, yet this area is being neglected. We've turned Pakistan into a consumer market instead of a producer', he added. To institutionalize cooperation, Sohail Altaf proposed that RCCI and KCCI explore signing a Memorandum of Understanding (MoU) to coordinate efforts on shared economic goals. 'If these two major chambers come together, it will inspire others to follow suit. Let's act for the collective interest of the business community,' he concluded. Copyright Business Recorder, 2025
Express Tribune
22-04-2025
- Business
- Express Tribune
Sit-ins jeopardise agri-exports
Listen to article Business leaders, including exporters and traders, have expressed grave concern over severe disruptions to Pakistan's agricultural exports caused by ongoing sit-ins and road blockages on national highways. The protests stem from opposition to newly proposed canals on the Indus River. Karachi Chamber of Commerce and Industry (KCCI) President Jawed Bilwani warned that the ongoing blockade near Babarloi town in Khairpur district has halted vehicular movement on the National Highway, severely disrupting transportation across Sindh and other regions. While acknowledging the constitutional right to protest, he stressed that prolonged blockades on key trade routes — especially those used for inter-city cargo and exports — have caused significant financial damage. Time-sensitive export consignments, particularly perishable goods, are at serious risk. "The entire supply chain stands paralysed due to the road closures and sit-ins, with long queues of containers and commercial vehicles stranded at Rohri, Ali Wahan, and other key arteries," he said. "This not only disrupts internal trade but also threatens export commitments, damaging Pakistan's credibility in global markets." He called on the government to facilitate dialogue with protesters while ensuring the continued flow of commercial and export cargo. "The situation is not only hurting businesses but also putting jobs and trade at risk at a time when the country faces severe economic challenges," he said. Bilwani urged federal and provincial authorities to act swiftly to restore traffic on the national highway and protect economic activity. "The economic repercussions of this blockade are growing by the hour. We appeal for an immediate resolution in the interest of the economy and the public," he said. Pakistan Fruits and Vegetables Exporters Association (PFVA) Patron-in-Chief Waheed Ahmed revealed that around 250 containers loaded with potatoes remain stuck on roads in interior Sindh. Hyderabad Chamber of Small Traders and Small Industry (HCSTSI) President Muhammad Saleem Memon wrote to the Sindh chief minister and Sindh Home minister, requesting urgent intervention. He reported hundreds of containers filled with export producedestined for Middle Eastern and Far Eastern marketsstranded for days at Sindh's entry points. "If these containers don't reach ports on time, export orders will be cancelled, and exporters could suffer losses worth millions of dollars," he warned. He explained that perishable goods like potatoes and fruits require specific temperature controls. Without access to power or generators, spoilage is highly likely. "This is not just a loss to exporters but also a severe financial blow to our farmers whose livelihoods are now under threat," he said. He also noted that the business community had already endured significant losses due to a recent goods transporters' strike. The ongoing sit-ins have triggered another economic crisis. "Thousands of trucks and containerssome even used by law enforcement as roadblocks — are disrupting both domestic and international trade," he said. Memon proposed an emergency corridor policy for agricultural exports, allowing time-sensitive consignments to be escorted by security squads to ports without delay. SAU conference highlights worsening crisis Meanwhile, national and international experts at the First International Soil Science Conference have expressed concern over worsening agricultural conditions in Pakistan due to water scarcity, rising soil salinity, climate change, and declining organic matter. The conference, organised by Sindh Agriculture University (SAU) and the Sindh Higher Education Commission, was held under the theme "Soil – Our Silent Lifeline for a Prosperous Future." SAU Vice Chancellor Prof Dr Altaf Ali Siyal said poor water distribution, reduced river flows, unregulated chemical use, and declining soil fertility are exhausting even the most productive regions of Sindh. "Soil is the silent backbone of our existence. Yet, we have failed to protect this vital resource," he said. He urged a transition to sustainable agriculture, better cropping patterns, and modern irrigation methods. Dr Mazharuddin Keerio, Director General of Agriculture Research Sindh, echoed these concerns. He emphasised that neglect of climate and soil health has led to a steep drop in productivity. He called for improved cropping technologies, more organic matter, and targeted soil restoration. Former DG Agriculture Research Prof Dr Qazi Suleman Memon highlighted the absence of comprehensive data on soil fertility and salinity. "Without accurate data, policymakers cannot make informed decisions," he said, urging the creation of region-specific soil maps. Julius Gitonga Muchemi, Head of FAO's Sindh office, reaffirmed the FAO's commitment to supporting farmers in dealing with climate and land degradation. "We encourage modern farming techniques," he said, "but many farmers hesitate to adopt our research-backed recommendations." Dr Zakir Hussain Dahri, Director General of the Southern Agricultural Research Centre under the Pakistan Agricultural Research Council, noted that large parts of Sindh — including the lower Indus basin — are severely affected by salinity and low organic carbon. Despite these issues, greenhouse farming contributes only 1% to national output, he added. Conference Chair Dr Allah Wadhayo Gandahi warned that climate change, land degradation, and food insecurity are escalating rapidly in Pakistan. "It is essential to educate future generations about the importance of soil and land stewardship," he said. Conference Secretary Dr Muhammad Saleem Sarki reported that over 160 research papers were received, with experts from countries including Malaysia, China, Australia, Bahrain, and Turkey participating in online sessions.
