Finance Minister Muhammad Aurangzeb on Tuesday met with representatives of the business community, chambers of commerce, and trade organizations to address concerns over the inclusion of Section 37A in the Finance Act, 2025 and related tax matters.
The contentious clauses had prompted the Karachi Chamber of Commerce to announce a nationwide strike on July 19, warning it would persist until the matter was resolved. The positive momentum of the talks, read a statement issued by the Finance Ministry, had led to the planned strike being postponed until a committee completes its examination of the relevant clause.
During the meeting, Aurangzeb assured participants of the government’s full cooperation and transparency, emphasizing that the sole objective of the new law was to prevent large-scale tax evasion, not target or harass legitimate, honest businesses.
Nonetheless, to address the business community’s concerns, the meeting’s participants decided to form a special committee under the leadership of Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan. The committee would also include Minister of State for Finance Bilal Azhar Kayani, Prime Minister’s Coordinator for Trade Rana Ehsan Afzal Khan, the chairman of the Federal Board of Revenue, and nominated representatives from the business community and chambers of commerce.
This committee would engage in detailed consultations over the next 30 days to develop a mutually agreeable and practical solution, which would be reviewed by Prime Minister Shehbaz Sharif and the federal cabinet.
During the meeting, the business community openly shared its concerns and forwarded suggestions. The government committed to seriously considering their input and pledged to move forward with consensus and trust. It was agreed that every effort would be made to resolve transaction-related concerns and to avoid creating any undue difficulties for businesses.
Section 37A, inserted into the Sales Tax Act, 1990, empowers the FBR to constitute a three-member committee that can authorize the commissioner to issue an arrest warrant against individuals involved in tax fraud, provided the loss exceeds Rs. 50 million.