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KARACHI ,May 22,2026 : Commercial importers have urged the federal government to remove the tax gap between commercial and industrial raw material imports. They argued that the current system encourages tax avoidance and causes major revenue losses to the national exchequer.
According to industry sources, higher taxes on commercial imports have distorted the market. As a result, many businesses now import goods through industrial units and later sell them in the open market. Consequently, the government loses billions of rupees in potential revenue.
Moreover, sources said the overall tax difference between commercial and industrial imports ranges from 26 to 28 percent. Therefore, genuine commercial importers struggle to compete in the market. Many now rely on informal arrangements to survive.
In addition, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has raised the issue in its budget proposals. It has also demanded the removal of the tax differential.
Sources further claimed that traders commonly import goods in the name of industrial units. Meanwhile, they privately pay a premium equal to nearly 25 to 30 percent of the tax difference.
As a result, the government loses revenue while undocumented channels benefit. Furthermore, the practice weakens the documented supply chain, encourages sales to unregistered buyers, and increases revenue leakages.
Commercial importers clarified that they mainly import raw materials and intermediate goods, not finished products. They added that industries remain the final users of these imports.
At the same time, they said many small and medium-sized industries cannot directly import large quantities of raw materials. Therefore, these businesses depend heavily on commercial importers for supply.
To address the issue, importers proposed two solutions. First, they urged the government to completely remove the tax gap between commercial and industrial raw material imports. Alternatively, they suggested reducing taxes on commercial imports and limiting the difference to only 2 to 3 percent.
Furthermore, they argued that lower taxes would increase documented imports and discourage informal market practices. Consequently, the government could collect billions of rupees in additional tax revenue.
Industry representatives also claimed that Pakistan’s commercial import bill could potentially double if authorities rationalize taxes and bring more trade into the formal economy. Ultimately, this could strengthen documentation and improve overall revenue collection.
