KARACHI: The Karachi Chamber of Commerce and Industry (KCCI) has raised significant concerns over the government's plan to aggressively collect super tax following a recent Federal Constitutional Court decision affirming its legality. The chamber warned that the demand for large tax payments in a single installment could severely disrupt business operations and further destabilize Pakistan's fragile economy.
According to Karachi Chamber of Commerce and Industry, President Muhammad Rehan Hanif acknowledged the court's ruling and the government's revenue needs but emphasized the critical importance of how and when the super tax is collected. He highlighted that the business community is already grappling with a severe liquidity crisis, driven by rising energy tariffs, high interest rates, excessive taxes, and increasing input costs.
Hanif noted that industries, particularly in Karachi, are under immense financial pressure. The sudden demand for super tax payments, amounting to hundreds of billions of rupees, could deplete working capital, disrupt cash flows, and prevent many businesses from meeting regular commitments like salaries, utility bills, raw material imports, and bank repayments.
He argued that requiring businesses to pay the super tax in one lump sum is neither realistic nor sustainable. He urged the government to allow businesses to adjust their super tax liabilities against long-overdue income tax and sales tax refunds, which have already deprived exporters and manufacturers of essential liquidity for years.
Alternatively, Hanif proposed that the government should introduce a structured installment plan, enabling taxpayers to fulfill their super tax obligations over a reasonable timeframe without jeopardizing their operations. This approach, he suggested, would promote compliance while ensuring industrial continuity and preserving jobs.
Hanif warned of broader economic consequences if relief measures are not provided, including downsizing operations, layoffs, and closures of small and medium-sized industries, particularly in export-oriented sectors like textiles, engineering, pharmaceuticals, and value-added manufacturing. Such developments would not only reduce exports but also diminish the tax base, contrary to expansion goals.
He further highlighted that Pakistan's cost of doing business has reached unsustainable levels due to high electricity and gas tariffs, multiple taxes, and regulatory challenges. Imposing super tax recoveries without flexibility at this critical time could drive many viable businesses into insolvency, exacerbating unemployment and social instability.
President KCCI reiterated that a weakened private sector cannot support revenue generation or economic recovery. He urged the government to engage with chambers of commerce and trade bodies to adopt a collaborative approach, avoiding coercive measures.
Hanif cautioned that without refund adjustments or installment options, the consequences could be severe and enduring, potentially leading to widespread industrial closures, loss of investor confidence, and further economic contraction. He stressed the need for sustainable revenue collection aligned with business survival, urging policymakers to act judiciously in the national interest.