Hyderabad Chamber of Small Traders & Small Industry (HCSTSI) Acting President Ahmed Idrees Chohan has strongly condemned the inclusion of a new Section 37AA in the Sales Tax Act under the Federal Budget 2025-26.
He called the amendment draconian and unconstitutional, saying it allows Federal Board of Revenue (FBR) officers to arrest any businessman, industrialist, CEO, or director merely on suspicion, without a warrant. He termed it the most dangerous legal provision in Pakistan's history.
Chohan said the section empowers FBR officers to arrest and detain individuals for up to 14 days without court approval or a judicial warrant.
"This violates justice and assaults constitutional rights and damages business freedom. What kind of financial reform instills fear among investors by allowing tax officials to arrest people?" he asked. "Is being an industrialist now a crime in Pakistan?"
He questioned whether the government wants to promote business or drive investors abroad to business-friendly countries like Bangladesh, Vietnam, Malaysia, or the United Arab Emirates (UAE), where no such arrest clauses exist.
While the world promotes ease of doing business, Pakistan appears to treat entrepreneurs like criminals, he said. The HCSTSI leader said such arbitrary arrest powers don't exist in any developed or developing country.
"If someone is evading taxes, a judicial system already exists. The FBR isn't a judicial body or law enforcement agency. It has no authority to arrest," he added.
Chohan labelled Section 37AA as "economic terrorism" and a deliberate act of "capital destruction". He warned that if the clause remains, Pakistan's business community will feel unsafe and foreign investment will stay away.
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