KCCI demands reversal of failed policies

Urges restoration of 1% FTR for exporters, regionally competitive energy tariff

KARACHI:

The Karachi Chamber of Commerce and Industry (KCCI) and Businessmen Group (BMG) have urged the federal government to avoid repeating policy mistakes that have damaged exports, discouraged investment and undermined industrial competitiveness.

In a joint statement, KCCI leadership said many fiscal measures introduced over the past two years had been opposed by the chamber before implementation, with detailed warnings supported by facts. Those concerns were ignored, resulting in consequences that have adversely affected businesses and government revenues.

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

KCCI President Rehan Hanif expressed concern over the removal of Export Facilitation Scheme benefits on yarn and fabric, which had negatively impacted exporters' liquidity.

The leadership also criticised the continuation of Super Tax under Section 4C, describing it as a punitive levy that discourages growth and investment. "Taxing success is neither sustainable nor growth-oriented," Motiwala said.

Hanif noted that the withdrawal of the Regionally Competitive Energy Tariff (RCET) had severely undermined Pakistan's export competitiveness. He called for its restoration to revive industrial growth.

Motiwala proposed segregating SSGC operations into separate entities for industrial and non-industrial consumers to improve efficiency and address circular debt.

Regarding digital invoicing, Hanif recommended extending the integration deadline until December 2026 to address technical glitches.

However, KCCI welcomed Prime Minister Shehbaz Sharif's commitments made during a recent meeting, including expeditious processing of sales tax refunds and amendments to the Electric Vehicle Policy.