ISLAMABAD – Major trade and industry associations across Pakistan have strongly opposed new legal powers granted to the Federal Board of Revenue (FBR), terming them “draconian, unconstitutional, and detrimental to the business environment.”
The objections come in response to Section 37AA of the Income Tax Ordinance, recently introduced under the Finance Bill, which allows the FBR to arrest taxpayers on suspicion without prior court approval. Additional amendments also permit freezing of bank accounts and deployment of officials at business premises without judicial oversight.
Unified Industry Response
At a joint press conference, representatives from the Lahore Chamber of Commerce & Industry (LCCI), Karachi Chamber (KCCI), Federation of Pakistan Chambers of Commerce & Industry (FPCCI) and various sectoral groups rejected the new measures, calling them a violation of Article 10A of the Constitution, which guarantees the right to a fair trial.
“These provisions are a direct threat to businesses and investment in Pakistan. No country can grow its economy under the fear of arbitrary arrests and harassment,” said LCCI President Mian Abuzar Shad.
The Businessmen Panel of FPCCI also issued a statement condemning the new tax measures and urged the government to immediately withdraw the controversial clauses.
Key Concerns Raised
- Arbitrary Arrests: Section 37AA allows FBR officers to arrest individuals without a warrant or court approval.
- Bank Account Freezes: Sections 138(3A) and 140(6A) permit freezing of bank accounts after court orders with limited opportunity for appeal.
- On-Site Monitoring: Section 175C enables FBR to post officials at business sites for real-time surveillance.
Business leaders argue that such powers create an atmosphere of fear and discourage both local and foreign investment at a time when Pakistan is already facing economic uncertainty.
Demand for Legal Review
Trade associations have called for:
- Full repeal of Section 37AA and related clauses;
- Mandatory judicial oversight for all enforcement actions;
- Broad consultation with business stakeholders before introducing such legislation.
Several chambers have hinted at possible nationwide protests and legal challenges if the government does not take corrective action.
This story has been reported by PakTribune. All rights reserved.
