ISLAMABAD: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has expressed apprehensions over “excessive powers” granted to the tax body, claiming that the government’s decision would stifle business activities.

FPCCI President Atif Ikram Sheikh said on Friday that instead of further empowering the Federal Board of Revenue (FBR), the government should address issues of the public and business community’s lack of faith in the apex tax body.

While addressing a post-budget news conference, Sheikh said the budget for the fiscal year 2024-25 was “not business friendly” and all new measures will only “discourage exports and local business activities”.

“We cannot move in circles. The government is giving too much power to FBR […] it can even take help from intelligence agencies to arrest businessperson considered defaulters by FBR,” the FPCCI president claimed, adding that even bail was not granted to the accused booked by the tax body.

“These measures will discourage investments […] that is why we see no foreign player entering Pakistani markets despite several MoUs with many countries.”

Sheikh said the FPCCI always offered help to the government in broadening the tax base and increasing revenue generation from other sources “but no response was received from authorities”.

“Instead, the decision has always been to increase tax rates and empower the FBR.”

Ahmed Chinoy said empowering FBR and other authorities “has always opened new avenues of corruption”. These government departments “blackmail” businesses and compel them to pay less taxes in exchange for “some deals” with officials.

“Government has not focused on reforms in FBR through digitisation and reduced discretionary powers of its officers,” Chinoy added.

Other FPCCI office-bearers said the revenue collection target had been increased by 38 per cent without any direction. Instead, the salaried class has been burdened with more taxes.

Ahmed Waheed, the FPCCI tax committee coordinator, said the issue is that the government is only targeting those who are already taxed heavily.

He said the salaries of government employees have been raised in the budget, but it was not possible for every private sector employer to do the same under existing economic conditions. The result will be shrinking fiscal space for private sector employees, he added.

Mian Zahid Hussain said the government’s expenses have been increased even though its productivity has always remained questionable.

No target has been set to offload loss-making state-owned enterprises and even those departments which have been shut down will remain under the government’s domain, he added.

The speakers said punitive measures against non-filers, such as travel bans, more duties on petrol and diesel and essential commodities like food and mobile phones, will only lead to the flight of capital and human resources from the country.

Published in Dawn, June 15th, 2024