KCCI calls for rollback of failed policies

KARACHI: The Karachi Chamber of Commerce and Industry (KCCI) and the Businessmen Group (BMG) have asked the federal government not to repeat what they described as policy errors that, in their view, have weakened exports, discouraged investment and reduced the competitiveness of industry.

In a joint statement, the KCCI leadership said a number of fiscal measures introduced over the last two years had been opposed by the chamber before they were enforced. It said those objections had been presented with detailed, fact-based warnings, but were not taken into account, leading to outcomes that affected both businesses and government revenues.

BMG Chairman Zubair Motiwala said the transfer of exporters from the Final Tax Regime (FTR) to the Normal Tax Regime under the Finance Act 2024 had turned out to be counterproductive. He called for the immediate restoration of the FTR at 1% for all exporters.

KCCI President Rehan Hanif also raised concerns over the withdrawal of Export Facilitation Scheme benefits on yarn and fabric, saying the move had adversely affected exporters’ liquidity. The KCCI-BMG leadership further objected to the continuation of Super Tax under Section 4C, describing it as a punitive measure that discourages business expansion and investment.

Referring to the tax burden, Motiwala said: "Taxing success is neither sustainable nor growth-oriented."

Hanif said the discontinuation of the Regionally Competitive Energy Tariff (RCET) had badly damaged Pakistan’s export competitiveness and urged the government to restore the tariff to support industrial revival. Motiwala also proposed splitting SSGC operations into separate entities for industrial and non-industrial consumers, saying this could improve efficiency and help tackle circular debt.

On digital invoicing, Hanif recommended that the integration deadline be extended until December 2026, citing technical problems. At the same time, KCCI welcomed commitments made by Prime Minister Shehbaz Sharif during a recent meeting, including the expeditious processing of sales tax refunds and changes to the Electric Vehicle Policy.