Business leaders meets with SIFC, FBR assures against misuse of arrest powers

In a meeting with the Special Investment Facilitation Council (SIFC) on Wednesday, representatives from the business community were reassured by Federal Board of Revenue (FBR) officials, including the chairperson, that newly introduced FBR arrest powers would not be misused. 

Kamran Arshad, Chairperson of the All Pakistan Textile Mills Association (APTMA), shared this update while speaking to Geo News. 

This development follows a meeting held the previous day between APTMA, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), and Field Marshal and Army Chief Asim Munir. The two trade bodies have claimed, with no official denial thus far, that the army chief assured them the immediate suspension of FBR’s arrest powers.

The introduction of new provisions under Sections 37A and 37B of the Sales Tax Act, 1990, which deal with the arrest and detention of taxpayers found guilty of misrepresentation, has caused tension between the government and the business community. 

Trade leaders have since engaged with government officials to propose changes to these provisions. However, it was only after their meeting with Field Marshal Asim Munir that any indication of suspension emerged.

Asked why trade leaders were not satisfied with the prime minister’s reassurances, Arshad explained that the FBR’s ambitious tax collection target of Rs14,131 billion for FY26 had raised concerns among businesses. Many leaders worry that the burden will fall disproportionately on the documented sector of the economy to meet this target.

Arshad also noted that the meeting with SIFC provided an important platform for discussions, helping to bridge the communication gap between the business community and the FBR. 

Another concern voiced by traders was the amendment to Section 24 of the Income Tax Ordinance, which prohibits the deduction of expenses for cash sales exceeding Rs200,000. This amendment has not been well received by the business community.

The series of meetings between business bodies and the government started after trade bodies announced plans to strike on July 19. Although FPCCI postponed the strike after positive talks with the government, the Karachi and Lahore chambers proceeded with the protest.

On Tuesday, APTMA and FPCCI praised the intervention of Field Marshal Asim Munir in suspending the controversial FBR powers under Sections 37A and 37B. During the meeting, business leaders raised concerns regarding high interest rates, delays in export facilitation reforms, and rising energy costs. 

The army chief assured them of immediate action and directed the FBR to hold consultations with relevant stakeholders. The trade bodies welcomed this commitment and supported the SIFC’s role in fostering industrial growth and economic stability.