Reversal of 16% rental tax brings relief to retail sector

Speakers at a seminar said that the reversal of the 16% tax on rental properties in Punjab has provided major relief to the country's retail community and reflected the success of collective efforts by trade bodies. They emphasised that such reforms have helped stabilise retail operations and created breathing space for organised businesses struggling under economic pressure.

They were addressing the 5th Pakistan Future of Retail Business Summit & Expo 2025 on Thursday, where leading figures from Pakistan's retail, e-commerce, and logistics industries gathered to discuss challenges, opportunities, and the future direction of the retail economy.

Patron-in-chief of the Chainstore Association of Pakistan (CAP), Rana Tariq Mehboob, in his address, outlined CAP's key achievements in recent years and appreciated the collective strength shown by retail leaders across the country. He said the reversal of the 16% tax on rental properties was a milestone that relieved thousands of retail outlets from unnecessary financial burden.

"These achievements are proof that unity within the business community can overcome the toughest challenges," Rana Mehboob said. "Retailers have continued to perform with courage and commitment, despite all odds."

The event attracted strong participation from all segments of the organised retail sector, reflecting its growing importance to Pakistan's economy. The summit provided a platform for dialogue on issues such as digital transformation, taxation, logistics improvement, skill development, and policy reforms aimed at promoting sustainable business growth.

"The retail sector must move forward as one — with innovation, transparency, and a collective commitment to progress," he said. "This is the time to invest in our people, modernise our systems, and shape a future where organised retail thrives as a pillar of Pakistan's economy."

Chairman of CAP, Asfandyar Farrukh, said that the summit represented a day dedicated to learning, collaboration, and future planning. He reaffirmed CAP's commitment to work for the entire retail ecosystem, ensuring that the sector not only survives current economic challenges but also becomes a key driver of national growth. He emphasised the need to strengthen domestic commerce alongside export development, upgrade workforce skills, and collaborate with policymakers to introduce reforms that promote sustainable business expansion.

Speaking on the occasion, CAP's advisers and senior members said that the reversal of the rental tax, the withdrawal of uniform signage rules, and the relaxation of smog-related operational restrictions were the result of effective communication between CAP and the Punjab government. They said these achievements showed that unity among retailers and consistent dialogue with policymakers can yield tangible results.

They urged the government to continue engaging with organised trade representatives before introducing new policies so that business continuity and employment security are not compromised.

They noted that Pakistan's retail industry has shown remarkable resilience despite high inflation, shrinking consumer demand, and rising operational costs. The advisers said that modern retail, which includes Tier-1 tax-compliant businesses, is now one of the most transparent and revenue-contributing sectors in the economy.

Industry experts and participants also discussed the fast pace of digital transformation in global retail and its implications for Pakistan. They called for greater adoption of technology, improved logistics systems, and consumer data analysis to meet evolving market trends.