The Karachi Chamber of Commerce and Industry (KCCI) has vehemently rejected the newly implemented clauses 37A and 37B of the Sales Tax Act, terming them “draconian” and demanding their immediate withdrawal. Addressing a press conference on Thursday, KCCI President Javed Bilwani and Businessmen Group (BMG) Chairman Zubair Motiwala warned that granting sweeping arrest powers to Federal Board of Revenue (FBR) officials will promote corruption and discourage investment.

The business leaders criticized the government’s apparent disregard for their concerns during the recent Business Anomalies Committee meeting. This perceived neglect prompted the KCCI to launch a protest campaign, including displaying banners across Karachi and holding the press conference. A large number of business community members, including representatives of various industrial area associations, attended the event.

Bilwani stated that chambers across Pakistan support the KCCI’s stance against clause 37A, and he cited numerous complaints from businesses about operating under the threat of arrest. He argued that this legislation unfairly targets law-abiding taxpayers instead of those involved in fraudulent activities like issuing fake invoices. He emphasized that the majority of registered businesses comply with the law, and the focus should be on the small group involved in illicit activities.

The KCCI president questioned the rationale of giving increased powers to officers with a poor track record in court cases against taxpayers, pointing to the FBR’s history of unsuccessful prosecutions. He expressed concern over the lack of redressal for honest businesses facing accusations under these new regulations.

Bilwani also criticized the government for deviating from the established consultative process of the Business Anomalies Committee. He explained that the committee typically meets before the passage of the Finance Bill to discuss concerns and offer recommendations. However, this year, the process was allegedly ignored, leading to the resignation of committee members in protest.

He appealed to the Prime Minister to withdraw clauses 37A and 37B and form a special committee comprising chamber presidents and FBR officials to address numerous flaws identified by the business community. He stressed the urgency of resolving these issues to facilitate tax return filing.

Motiwala reiterated the demand to repeal this “black law,” arguing that unchecked arrest powers invite corruption and harassment. He suggested that law-abiding businesses might succumb to unlawful demands to avoid arrest, further eroding trust in the system. He warned that even one action under clause 37A could severely impact business activities and deter future investment.

Motiwala urged the government to focus on bringing those operating outside the tax net into the fold instead of harassing existing taxpayers. He emphasized the need for immediate and sincere action to address the growing concerns of the business community.

Presidents of Lahore and Faisalabad chambers also addressed the press conference remotely, expressing solidarity with the KCCI’s position.