Latest news with #TariqMehboob
Express Tribune
16-07-2025
- Business
- Express Tribune
Retailers denounce harsh tax measures
Policymakers are expected to continue improvements on tax collection side to widen the tax net by signalling reduction in corporate and salary tax by 1% per year for the next 10 years and by reducing industrial energy tariffs. photo: file Listen to article The Chainstore Association of Pakistan (CAP), which represents the country's organised retail sector, has voiced concerns over harsh tax measures and enforcement practices, particularly those introduced through the Finance Act 2025. "Retail chains in the formal sector have worked tirelessly for years to adopt technology, ensure transparent sales reporting and contribute significantly to the nation's tax revenues as well as its exports," said Asfandyar Farrukh, Chairman CAP. "Yet, we face an unsustainable environment where legitimate businesses are treated as potential offenders, subjected to arbitrary tax assessments and left exposed to daily harassment that threatens both our operations and workforce." The association noted that while formal retailers accounted for only around 10% of Pakistan's retail trade, they generated the majority of tax revenue from the sector. However, recent tax policies and enforcement actions have placed growing pressure on the industry and threaten progress in documenting the economy. "It is our considered view that, given ever-increasing revenue targets and the slow pace of broadening the tax base, some FBR field formations are using enforcement powers to impose excessive and arbitrary tax assessments and penalties on the already compliant businesses simply to boost collections," said Tariq Mehboob, Patron-in-Chief of CAP. Similarly, the SITE Association of Industry Karachi rejected the controversial Sections 37A and 37B introduced in the Finance Act, declaring that the industrial community would not tolerate such oppressive laws. SITE Association President Ahmed Azeem Alvi condemned the provisions of these laws, which granted powers to FBR officers to arrest honest taxpayers based solely on suspicion and even file FIRs.
Business Recorder
19-06-2025
- Business
- Business Recorder
Retail sector: CAP voices concerns over lack of ‘meaningful' tax reforms
LAHORE: The Chainstore Association of Pakistan (CAP) has raised significant concerns over the lack of meaningful tax reforms for the retail sector in the proposed Finance Bill 2025–26. The CAP has also warned that targeting domestic e-commerce could inadvertently harm the formal retail sector and jeopardize the growth of Pakistan's digital economy if not revised. The CAP acknowledged the government's efforts to broaden the tax base and formalize the economy. However, the association argues that inconsistent and short-sighted policies have placed disproportionate burdens on tax-compliant retailers integrated with the Federal Board of Revenue's Point of Sale (FBR-POS) system. The absence of a clear, long-term taxation roadmap, developed in consultation with stakeholders, has further deepened uncertainty within the sector. 'This year, the retail ecosystem anticipated a strategic, long-term approach in the Finance Bill,' said CAP Chairman Asfandyar Farrukh. 'Instead, we see a continuation of past practices, with our proposals to foster formal retail growth and encourage broader documentation largely overlooked.' Organized retail currently accounts for only 10% of Pakistan's retail and wholesale trade, significantly lower than the 15–20% share observed in comparable economies. Informal competition, increasing compliance burdens, and uneven enforcement continue to hinder growth, investment, and job creation in the formal retail sector. CAP Patron-in-Chief Tariq Mehboob highlighted the detrimental impact of last year's decision to eliminate the GST concession for customers of tax-compliant retailers, which has further tilted the competitive landscape in favor of informal players. 'Schemes like Tajir Dost failed due to inadequate planning and lack of stakeholder engagement,' Mehboob stated. 'There is still an opportunity to revise the Finance Bill before its finalization. Without prompt action, we risk losing another year without meaningful reform.' To encourage digital payments and economic documentation, the CAP has proposed reduced GST rates for consumers who transact digitally with retailers of any size. These rates, coupled with simplified compliance measures and built on the success of provincial incentives, would lower costs, promote formalization, and reduce reliance on cash transactions. Additionally, the CAP has recommended a fixed quarterly advance income tax regime for small retailers, payable through branchless banking and adjustable against annual filings. The association also advocates for a stable, three-to-five-year tax framework, complemented by incentives such as cashback programmes and service benefits at NADRA and passport offices, to build trust and encourage small and medium-sized enterprises (SMEs) to register. Pakistan's e-commerce sector has experienced remarkable growth, expanding by over 35% annually and empowering more than 100,000 micro and small sellers while generating jobs in technology and logistics. According to the State Bank of Pakistan, the sector facilitated over PKR 538 billion in digital payments in 2024. The CAP supports positive measures in the Finance Bill, such as the 5% digital presence levy on imported goods sold through foreign platforms like Temu and the introduction of e-commerce transaction reporting to enhance documentation. However, the CAP has expressed concern over several proposed tax compliance measures that could undermine these gains. Key concerns include blanket sales tax withholding on already documented businesses without input adjustment, mandatory sales tax registration for micro-sellers—particularly impacting youth and women entrepreneurs—and complex, multi-rate income tax withholding for platforms, payment providers, and courier services. These policies risk creating operational bottlenecks, complicating payment recovery, and increasing compliance costs across the e-commerce value chain. The CAP has called on the Ministry of Finance, the Federal Board of Revenue, and the Ministry of Commerce to suspend the implementation of these measures and engage in urgent consultations with stakeholders, including online sellers, platforms, and service providers. The association has put forward several recommendations to address these issues: limiting the 2% sales tax withholding to non-Active Taxpayer List (ATL) sellers, accepting income tax registration as sufficient for small, home-based online sellers, implementing a simplified single-rate income tax withholding of 0.25%, restructuring penalties to encourage rather than punish compliance, rationalizing provincial taxes on essential digital services, and providing a transition period of at least two to three months for e-commerce businesses to adapt. Copyright Business Recorder, 2025
