LAHORE:

The Chainstore Association of Pakistan (CAP), which represents the country’s organised retail sector, has voiced concerns over harsh tax measures and enforcement practices, particularly those introduced through the Finance Act 2025.

“Retail chains in the formal sector have worked tirelessly for years to adopt technology, ensure transparent sales reporting and contribute significantly to the nation’s tax revenues as well as its exports,” said Asfandyar Farrukh, Chairman CAP.

“Yet, we face an unsustainable environment where legitimate businesses are treated as potential offenders, subjected to arbitrary tax assessments and left exposed to daily harassment that threatens both our operations and workforce.”

The association noted that while formal retailers accounted for only around 10% of Pakistan’s retail trade, they generated the majority of tax revenue from the sector. However, recent tax policies and enforcement actions have placed growing pressure on the industry and threaten progress in documenting the economy.

“It is our considered view that, given ever-increasing revenue targets and the slow pace of broadening the tax base, some FBR field formations are using enforcement powers to impose excessive and arbitrary tax assessments and penalties on the already compliant businesses simply to boost collections,” said Tariq Mehboob, Patron-in-Chief of CAP.

Similarly, the SITE Association of Industry Karachi rejected the controversial Sections 37A and 37B introduced in the Finance Act, declaring that the industrial community would not tolerate such oppressive laws.

SITE Association President Ahmed Azeem Alvi condemned the provisions of these laws, which granted powers to FBR officers to arrest honest taxpayers based solely on suspicion and even file FIRs.