OICCI expresses worries over proposed arrest authorities, according to FBR officials' assertions.
LOSING INVESTOR CONFIDENCE: KARACHI BUSINESS GROUP SLAMS FBR ARREST POWERS
Hey there! Let's dive into a hot topic in Pakistan's business world. The Overseas Investors Chamber of Commerce and Industry (OICCI) recently voiced serious concerns over the arrest powers granted to Federal Board of Revenue (FBR) officials under the Finance Bill 2025-26, claiming it's a major blow to investor confidence, particularly foreign investors.
In a no-holds-barred letter to Finance Minister Muhammad Aurangzeb, the OICCI pointed a finger at proposed amendments in the Finance Bill 2025-26 affecting Section 37 AA of the Sales Tax Act, 1990. This chunk of the bill aims to expand the arrest/prosecution powers of Inland Revenue officials, a move the OICCI sees as risky without necessary checks and balances.
The Chamber slammed the provision, stating it could lead to misuse and harassment of businesses. Informal feedback from local business leaders shares the same sentiment, further denting the confidence of OICCI's 200-plus members hailing from over 30 countries.
Abdul Aleem, Chief Executive and Secretary General of the OICCI, penned down these thoughts in the letter. He argued that such arbitrary decisions, made without proper consultation with key stakeholders or due consideration of their impact on the business environment, add fuel to the negative image of Pakistan as a business-friendly destination.
However, there's some good news. Thanks to timely intervention from Prime Minister Mian Shehbaz Sharif, Finance Minister Muhammad Aurangzeb, and senior members of Parliament, these far-reaching and potentially disruptive proposals are being reviewed with rigorous oversight and due diligence. After strong opposition, the government has reassessed the situation, introducing safeguards to prevent misuse.
Under the revised framework, an FBR officer can only arrest a suspect after conducting a prior inquiry and obtaining approval from the Commissioner Inland Revenue (CIR). An investigation can be launched only after receiving this authorization, after which the investigating officer will have powers equivalent to a police station incharge under the Code of Criminal Procedure, 1898. These new restrictions aim to prevent misuse of authority and unwarranted harassment, easing the concerns raised by stakeholders.
In conclusion, the powers of arrest for FBR officials have been significantly curtailed and are now subjected to additional checks and balances following consultations initiated by the OICCI and other opposed parties, ensuring that arrests are made only after proper inquiry and authorization by senior officials.
So, keep an eye on this evolving story as Pakistan strives to create a business-friendly environment that welcomes both local and foreign investors!
[Extra Info: The OICCI's concerns over the Finance Bill coincide with growing criticism of Pakistan's tax collection methods. In the past, these methods have been accused of disproportionately targeting the middle class and small businesses. However, recent changes aim to modernize Pakistan's tax system and make it more efficient, but critics argue that over-expansive powers could lead to abuses.]
The OICCI's concerns over the Finance Bill, which include the expansion of arrest powers for FBR officials, are rooted in the potential for misuse and harassment of businesses, as argued by Abdul Aleem, Chief Executive and Secretary General of the OICCI. This controversial move has caused a decrease in confidence among foreign investors, not just members of the OICCI, due to the perceived disregard for checks and balances in the business sector.
