Karachi: In a strong stance against the government’s fiscal measures, Mr. Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has rejected any further increases in withholding tax (WHT) and other at-source deductions on already taxed sectors. Sheikh emphasized the adverse effects of such policies on business, industry, and trade, indicating that the community cannot sustain additional tax burdens.

According to Federation of Pakistan Chambers of Commerce and Industry, Sheikh outlined that WHT constitutes 70 percent of all direct taxes collected under the sales tax regime for FY24, a figure he described as alarming. He criticized the potential government plans to increase WHT to satisfy International Monetary Fund (IMF) demands and falsely inflate tax collection figures.

Sheikh also highlighted the likely necessity of a supplementary finance bill or a “mini-budget” to implement any WHT increase, warning that such measures typically undermine investor confidence, trigger capital flight, lead to industry closures, and erode trust with international trading partners.

Further detailing the fiscal challenges, Sheikh noted the Federal Board of Revenue (FBR) has already experienced a PKR 98 billion shortfall in the first two months of FY25, with projections of an additional shortfall of up to PKR 100 billion in the third month. He argued that without genuine economic or export growth, such tax collection methods do not reflect true economic expansion.

In conclusion, Sheikh advocated for economic stimulation measures such as reducing the State Bank of Pakistan’s key policy rate, adjusting utility tariffs to be competitive regionally, ensuring stable macroeconomic policies, and expanding the tax base to include untaxed sectors as viable solutions for improving tax revenues without imposing further burdens.