Fpcci Condemns Proposed Tax Changes and Warns of Export Sector Collapse
Published on: June 17, 2024.
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The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) strongly opposes the federal budget’s plan to replace the fixed income tax system for exporters with a 29% tax on profits. This proposal, considered catastrophic by industry leaders, has sparked widespread backlash among Pakistan’s export sectors.
At a press conference, Senior Vice President of FPCCI, Saqib Fayyaz Magu, along with representatives from the Faisalabad Chamber of Commerce, Sialkot Chamber of Commerce, and various industry associations including Textile, Pharmaceutical, Rice, Fruit, Vegetable, Leather Products, and Tanners, expressed their concerns. Magu cautioned that the budget measures would increase harassment and corruption by the Federal Board of Revenue (FBR), driving away investors. He stressed that businessmen should not face non-bailable arrests, condemning the proposed law as draconian and demanding its immediate withdrawal. Failure to reverse this decision would result in a nationwide consultation with export industries to determine their course of action.
Chela Ram Kiwalani, Chairman of the Rice Exporters Association, and Chaudhry Muhammad Israr Sharif criticized the timing of the proposal, as it could severely harm exports during an already difficult economic period.
Abdul Rahim Janu highlighted that exporters already bear taxes amounting to 30-35% of their profits. Under the new National Tax Regime, a 29% tax on exports along with a 10% super tax would bring the total to an alarming 39%, opening the door to increased harassment and corruption. Janu warned that abolishing the fixed tax regime could lead to a $6 billion decrease in exports, citing the failure of a similar system 15 years ago due to rampant corruption and misuse. The business community stands united in opposing the proposed tax changes, cautioning of severe consequences if implemented.
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