Karachi: Mr. Atif Ikram Sheikh, President FPCCI, has unequivocally stated that FPCCI vociferously opposes any further increase in taxation on already taxed classes or sectors; advanced tax collection; withholding tax (WHT) or any high-handed at source deductions. The business, industry and trade community has had enough of unfair taxation; and, it has reached a point where it can no longer withstand any additional burden, he added.
Mr. Atif Ikram Sheikh reiterated FPCCI’s stance that what we need in Pakistan is broadening of the tax-base; simplification of tax filing system; taxation reforms which make economic sense and an end to harassment or maladministration in the taxation machinery – not these kind of counterproductive, regressive and contractionary taxation measures.
Mr. Sheikh informed that WHT accounts for 70 percent of all the direct taxes collected in sales tax mode in the country as per FY24 data; and, this number is alarming to say the least. On top of that, there are reports that the government may again raise WHT in the country to appease IMF and show a healthy increase in tax collection. This is no good performance; but, a miserable attempt to show progress, he added.
FPCCI President highlighted that the government would have to bring a supplementary finance bill 2025 or a mini-budget in order to implement any increase in WHT. Any mini-budget brings investor’s confidence down; causes flight of capital; closure of industries and fuels mistrust with trading partners of exporters, he stressed.
FPCCI Chief explained that WHT is collected in a sales tax collection mode; and, that, by any means, is not reflective of any economic growth, nor any positive trend in commercial activities or consumption in the country. It is pertinent to note that FBR has already suffered a shortfall of PKR. 98 billion in first 2 months of FY25 – and, it is estimated that it will further fall short by up to PKR. 100 billion in the third month of FY25. This is for the reason that there is no economic or export growth in the country, he added.
Mr. Atif Ikram Sheikh maintained that the only workable solution to generate more taxes is to generate more economic activity through drastically reducing SBP’s key policy rate; rationalizing electricity & gas tariffs vis-à -vis regional competitors; bringing continuity & reliability in macroeconomic policies and broadening of tax-base to the untaxed, he added.
