FPCCI Condemns Proposed Tax Changes, Warns of Export Industry Collapse

KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI), along with key representatives from Pakistan’s export sectors, has vehemently opposed the government’s proposal to abolish the fixed tax regime. The proposal suggests replacing the 1% fixed income tax with a 29% tax on export profits, a move industry leaders are calling destructive.

At a press conference, Senior Vice President Saqib Fayyaz Magu of FPCCI criticized the budget measures, predicting increased harassment and corruption from the Federal Board of Revenue (FBR) and potential capital flight. Magu emphasized that no businessman should face non-bailable arrest and vowed that the business community will vigorously protest this “black law.” He urged the government to withdraw the decision, warning that failure to do so would prompt nationwide action from export industries.

The press conference saw participation from officials of the Faisalabad and Sialkot Chambers of Commerce, as well as representatives from the Textile, Pharmaceutical, Rice, Fruit, Vegetable, Leather Products, and Tanners Associations.

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Chela Ram Kiwalani, Chairman of the Rice Exporters Association, and Chaudhry Muhammad Israr Sharif expressed their confusion over such drastic measures in the current economic climate. Abdul Rahim Janu highlighted that exporters are already burdened with a 30-35% tax on profits. Under the new proposal, combining a 29% export tax with a 10% super tax, exporters would face a 39% total tax burden. Janu warned this would open the door to further harassment and predicted a disastrous decline in exports by $6 billion if the fixed tax is removed.

Reflecting on past failures, Janu noted that a similar system had collapsed 15 years ago due to corruption and misuse. He questioned the practicality of determining exporters’ profits accurately and called for the proposed law’s immediate reversal to protect Pakistan’s export industry from ruin.