President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) AtifIkram Sheikh, firmly opposed any further increase in taxation on already taxed sectors, including advanced tax collection and withholding tax (WHT). Sheikh emphasized that the business, industry, and trade communities are already overburdened and cannot bear any additional taxes.
He reiterated FPCCI’s stance on the need for broadening the tax base, simplifying the tax filing system, and implementing meaningful tax reforms. Sheikh argued that instead of imposing counterproductive and regressive tax measures, the government should focus on ending harassment and maladministration within the tax machinery. Sheikh pointed out that WHT accounts for 70 percent of all direct taxes collected in sales tax mode, according to FY24 data, a figure he described as alarming. He warned that the government might consider raising WHT again to satisfy IMF demands and artificially boost tax collection figures. However, Sheikh criticized such measures as a poor substitute for genuine progress.
The FPCCI President also highlighted that any increase in WHT would likely require a supplementary finance bill or mini-budget in 2025, which could harm investor confidence, lead to capital flight, and disrupt industries.
He stressed that WHT collected through sales tax mode does not reflect economic growth or positive commercial activity. Sheikh noted that the Federal Board of Revenue (FBR) has already missed its revenue target by PKR 98 billion in the first two months of FY25, with an additional shortfall of up to PKR 100 billion expected in the third month. He attributed this to the lack of economic and export growth in the country. The FPCCI Chief further stated that the only viable solution for increasing tax revenue is to stimulate economic activity by significantly lowering the State Bank of Pakistan’s key policy rate, rationalizing electricity and gas tariffs to match regional competitors, ensuring stability in macroeconomic policies, and broadening the tax base to include untaxed sectors.
