The Biz Update One of Pakistan's Most Reliable Business News Website
Related Articles
Karachi, August 4, 2025: In response to strong concerns raised by Pakistan’s business community, the Federal Board of Revenue (FBR) has issued new notifications limiting the arrest powers of tax officials and establishing Grievance Redressal Committees to review complaints under the Sales Tax regime. The move was welcomed by Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Vice President Amaan Paracha, who credited sustained advocacy efforts and serious intervention by top government and military leadership.
Paracha stated that business leaders had voiced alarm over discretionary arrest powers granted to FBR officers under the 2025–2026 Federal Budget, particularly under Sections 37A and 40B of the Sales Tax Act. These provisions allowed for the arrest of CEOs and directors of registered companies merely on suspicion of tax fraud a practice Paracha called unjust and damaging to business confidence.
In response, the new FBR notifications stipulate that no arrest can be made without a preliminary review by the newly formed grievance committees. Only after these bodies review and recommend further action can legal proceedings move forward.
“These committees will ensure transparency and due process,” Paracha said, adding that the trust of the business community hinges on such institutional safeguards.
He further noted that FPCCI had formally raised these issues with Prime Minister Shehbaz Sharif, Field Marshal General Asim Munir, and key cabinet members, who he said took the concerns seriously and acted promptly.
Paracha emphasized that the business community supports tax expansion but insists it must come without harassment.
“The solution is not to squeeze existing taxpayers, but to bring new individuals into the tax net and build a culture of voluntary compliance,” he said.
He also reiterated FPCCI’s commitment to national economic progress, while stressing that reform must be balanced and consultative.
The changes to Sections 37A and 40B are seen as a significant win for the private sector, potentially easing tensions between tax authorities and business owners amid an increasingly challenging economic environment.
