President Hyderabad Chamber of Small Traders & Small Industry (HCSTSI), Muhammad Saleem Memon, has expressed grave concern over the excessive, unilateral and unbalanced powers granted to the Federal Board of Revenue (FBR) through the SRO and Ordinance issued on May 2, 2025. He stated that these amendments, although introduced under the guise of improving tax collection, could, in reality, open a new chapter of harassment and uncertainty for Pakistan’s business community. The changes contradict the principles of justice, due process, and economic freedom.
Chamber President Saleem Memon pointed out that under the newly inserted Sections 138(3A) and 140(6A) of the Income Tax Ordinance, 2001, the tax liability will become immediately enforceable if a higher court adjudicates a matter. FBR will then have the authority to freeze bank accounts and recover the dues without prior notice or legal proceedings. This alarming provision undermines taxpayers’ constitutional and legal rights, depriving them of the opportunity to defend, appeal, or clarify, violating fundamental principles of natural justice.
He further highlighted that Section 175C grants FBR or the Chief Commissioner the authority to deploy officers at any business premises, including shops or factories, to monitor the production of goods, services, or stock. He stated this is a form of coercion and interference in business operations. The physical presence of tax officers will create a hostile environment and instil fear and mistrust among entrepreneurs, ultimately disrupting routine commercial activities.
Expressing reservations about the amendments to the Federal Excise Act 2005, Saleem Memon noted that while the criminalization of counterfeit stamps, barcodes, and labels may be justified in principle, it must also be recognized that in many cases, such errors can be unintentionally caused by technical glitches, printing issues, or logistical challenges. Officials could easily misuse such unintended mistakes as grounds for excessive action and harassment.
The HCSTSI president also criticized how these sweeping changes were introduced. He lamented that the amendments were enforced immediately through the Ordinance without parliamentary debate, stakeholder consultation, or committee review. This lack of democratic process and transparency is deeply disappointing and detrimental to the trust between the government and the business community.
In light of these developments, Muhammad Saleem Memon strongly appealed to the Prime Minister of Pakistan, the Federal Minister of Finance, and the Chairman of FBR to immediately review these amendments and establish clear guidelines to restrict the misuse of authority by FBR officials. He proposed the following key measures to restore balance and fairness:
- Before freezing any bank account, a minimum of 15 days written notice must be mandatory to allow the taxpayer to clarify or respond.
- The deployment of tax officers on business premises should be subject to judicial approval to prevent arbitrary actions.
- An independent grievance redressal cell must be established to address business community complaints promptly and transparently.
- No new regulations should be implemented without the prior consultation of stakeholders, particularly representatives of small traders and industries.
He was alarmed that ignoring the legitimate concerns of the business sector would severely erode confidence across the country, damaging not only the economic environment but also the government’s revenue collection targets. He added that instead of burdening existing taxpayers, the government should focus on expanding the tax net to include untaxed segments of the economy.
Chamber President Saleem Memon urged the federal government to reconsider these amendments urgently and revive the consultation process with the business community to build a fair, transparent and progressive economic environment in Pakistan.
