05-05-2025
- Business
- Business Recorder
Taxation: BQATI urges govt to withdraw new Ordinance
KARACHI: The Bin Qasim Association of Trade & Industry (BQATI) Monday issued a strongly critical statement condemning the Government of Pakistan's newly promulgated Tax Laws (Amendment) Ordinance, 2025 and calling for its immediate repeal.
BQATI President Shakil Ashfaq warned that the ordinance – which allows tax authorities to instantly recover tax liabilities once a case is concluded by the High Court or Supreme Court – undermines due process and creates an environment of coercion and uncertainty for businesses.
The trade body stressed that while effective tax collection is important, it must not come at the cost of fundamental legal safeguards and business confidence.
In its statement, BQATI highlighted several alarming provisions of the ordinance that it says will gravely hurt law-abiding businesses and investors:
• Immediate, Forced Recoveries: By amending Sections 138 and 140 of the Income Tax Ordinance, 2001, the new law empowers the Federal Board of Revenue (FBR) to bypass standard procedure and recover taxes immediately after an adverse court judgment, without any formal notice or grace period for compliance. This means as soon as a High Court or the Supreme Court rules against a taxpayer, the FBR can freeze bank accounts, attach assets or even seal business premises without warning, leaving the taxpayer no time to appeal or arrange payment. 'Such sweeping powers to enforce instant recoveries trample on taxpayers' right to due process,' Ashfaq said, adding 'and ignore the reasonable timelines that were previously available under the law for compliance or further appeal.'
• Nullification of Legal Safeguards: BQATI noted that the ordinance overrides established legal protections upheld by Pakistani courts. A recent Islamabad High Court judgment in the Pakistan LNG case had mandated that tax officials must issue a notice (with at least a seven-day window for voluntary payment) before taking coercive action under Section 140. 'By explicitly legislating that 'notwithstanding any court decision' tax must be paid at once, the government has effectively nullified the High Court's safeguard that promoted fair play and transparency,' Ashfaq observed. 'This ordinance sends a message that even if a court of law provided relief to a taxpayer, it would be ignored– a move BQATI finds utterly unacceptable.'
• Intrusive On-Site Monitoring: The ordinance authorizes the FBR to station Inland Revenue officers at factories and commercial premises to monitor production, supplies, and inventory in real time. BQATI cautions that deploying tax officials directly on factory floors and business sites will disrupt operations and intimidate businesses. 'Planting tax officers in manufacturing units is an unwarranted intrusion into lawful business activity,' said Shakil Ashfaq. 'Such constant surveillance creates a climate of harassment, making it difficult for industries to function normally or with peace of mind.'
• Overlapping Enforcement Powers: The ordinance further extends tax enforcement authority to provincial officials under the Federal Excise Act, 2005. By empowering officers of provincial governments to act as federal tax enforcers, it blurs jurisdictional lines and risks conflicting or inconsistent application of tax laws across different regions.
BQATI warns that this overlap will sow confusion and encourage arbitrary actions, as businesses could be answerable to multiple authorities pursuing aggressive recoveries simultaneously.
President Shakil Ashfaq emphasized that Pakistan's business community fully supported fair tax collection, but criticized the ordinance's heavy-handed approach as 'counterproductive and draconian.' He stated that these measures bypass due process, undermine the rule of law, and cast every taxpayer as a defaulter, thereby eroding public trust in the tax system.
Copyright Business Recorder, 2025
