Vanaspati manufacturers threaten closure over tax

Ghee, oil industry gives 48-hour deadline, citing harassment, and stalled refunds

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KARACHI:

The Pakistan Vanaspati Manufacturers Association (PVMA) has warned of an indefinite nationwide shutdown of ghee and cooking oil production if the Federal Board of Revenue (FBR) does not withdraw controversial tax enforcement powers within 48 hours.

At a press conference following the association's General Body meeting in Karachi, PVMA Chairman Sheikh Umer Rehan said the strike was unanimously approved by members. However, the strike is on hold for two days due to ongoing FPCCI-FBR talks facilitated by the Special Investment Facilitation Council (SIFC) in Islamabad. "We have delayed the strike by 48 hours, hoping that negotiations between FPCCI and FBR under SIFC supervision will bring results. If not, we will halt production across Pakistan," Rehan warned.

According to a statement released on Wednesday, PVMA opposes new amendments in the Income Tax Ordinance in Budget 2025-26, particularly Sections 40B, 40C, 21S, and 8B. These allow FBR to monitor private businesses and grant power to arrest alleged defaulters without warrants under Section 37A. Rehan said these powers mirror the National Accountability Bureau (NAB), raising fears of arbitrary interference in commercial activities and would lead to harassment.

"If NAB-like officers monitored the FBR chairman, could he work freely? Then how can we work under similar pressure?" he asked. PVMA highlighted its economic role, saying the sector is the second-largest taxpayer after petroleum. Rehan said the industry pays 35% tax on imports and 10% on sales but still faces raids and arbitrary rules.

He also claimed that utility stores owe the industry over Rs6.5 billion, while billions in sales tax refunds remain unpaid. He added that the sector lacks capacity for immediate compliance with the newly introduced digital invoicing requirement.

"Digitisation takes time and investment. We can't do it overnight," he said.

The PVMA said it prefers dialogue but warned that if the government fails to act, it will proceed with a shutdown.