KATI Warns Fixed Tax Regime on Exports Will Devastate Industry.

Karachi: Johar Qandhari, President of the Korangi Association of Trade and Industry (KATI), has strongly
condemned the government’s proposed fixed tax regime on exports, warning that it will severely impact
exports and discourage both domestic and foreign investment. Qandhari stated that this policy move
would inflict serious damage on the economy and further complicate the challenges faced by
industrialists.
“The government’s proposal to implement a fixed tax regime on exports will only add to the difficulties
of industrialists, rather than facilitating them to boost exports,” Qandhari said. “The cost of production
has already reached unprecedented levels due to various government policies, including high taxes and
regulatory duties.”
He highlighted that the current tax burden on industries—comprising income tax, sales tax, withholding
tax, and regulatory duties—can account for up to 50% of their income. This, he argued, makes it virtually
impossible for industries to operate profitably.
“No industry can sustain itself with a 50% tax on income. It is becoming increasingly difficult to run
industrial operations under these conditions,” Qandhari added.
He expressed concern that such government actions could halt foreign investment entirely and lead to
the closure of existing industries. In contrast, neighboring countries like India and Bangladesh provide
extensive support to their exporters, including ministerial assistance and special protocols, which
enhances their industrial growth and global market presence by enabling them to offer competitively
priced products.
“In Pakistan, exporters are being treated as adversaries, stripping them of their right to conduct
business,” Qandhari remarked. “Rather than expanding the tax net to increase revenue, the government
is unfairly burdening the existing taxpayers.”
Qandhari called for immediate reductions in electricity and gas prices, along with the withdrawal of the
proposed fixed tax regime on the export sector, to facilitate increased domestic exports. “The
government must take urgent steps to support exporters and promote industrialization to prevent
economic decline,” he emphasized.