HYDERABAD: The business community, particularly small traders and industrialists, has expressed deep concern over recent unannounced changes made by the Federal Board of Revenue (FBR) regarding Harmonized System (HS) Codes and sales tax filing procedures. Muhammad Saleem Memon, President of the Hyderabad Chamber of Small Traders & Small Industry (HCSTSI), highlighted the negative impact of these abrupt reforms on businesses across the country
Addressing the issue, the HCSTSI President acknowledged FBR’s stated goals of digitalization and transparency but strongly criticized the implementation method. According to Memon, the sudden nature of these changes has created significant difficulties for businesses, forcing many to hire tax consultants even for routine sales tax submissions, thereby increasing operational costs. The technical complexities introduced by the new HS Code compliance requirements and the H1 annexure have reportedly made timely tax filing a major challenge, leading to confusion among compliant taxpayers and delays in government revenue collection.
Memon further noted that the already fragile trust between the business community and the FBR has been further eroded. He stated that traders feel their tax contributions are not being reinvested into their welfare, infrastructure development, or initiatives aimed at facilitating business growth. This sentiment, he warned, is driving many small and medium-sized enterprises (SMEs) back into the informal economy, hindering Pakistan’s efforts towards economic formalization. Exporters are also facing challenges, including delays in port clearance, which disrupt schedules and could damage Pakistan’s reputation in the global market.
Drawing a parallel with Malaysia, the Chamber president pointed out that their Royal Customs Department adopted a phased approach to HS Code digitization. This included providing proper training and engaging in consultations with stakeholders, which helped build trust and ensured smoother compliance transitions.
In response to the prevailing situation, the HCSTSI President appealed to the Prime Minister of Pakistan to take immediate notice. He urged the Prime Minister to direct the FBR to cease implementing such technical amendments without thorough consultation with relevant stakeholders. Memon emphasized the need for a gradual implementation of all policy changes, supported by detailed training programs, especially tailored for SMEs, to help them adapt to new systems effectively.
Furthermore, he demanded that the FBR suspend all penalties and late fees during this transitional period. He also called for the establishment of dedicated help desks within every chamber and trade organization to assist the business community in navigating the new procedures. Most importantly, Memon stressed that restoring trust in the FBR is contingent upon the transparent reinvestment of tax revenues into initiatives that directly benefit businesses, enhance infrastructure, and support traders.
Concluding his remarks, President Muhammad Saleem Memon asserted that Pakistan’s economic revival is unattainable without the active cooperation of the business community. He maintained that such cooperation can only be fostered through a commitment to consultation, transparency, and facilitation from the relevant authorities.
