HYDERABAD: President Hyderabad Chamber of Small Traders & Small Industry (HCSTSI), Muhammad Saleem Memon, has expressed serious concerns over the sudden and un-consulted changes introduced by the Federal Board of Revenue (FBR) in the Harmonized System (HS) Codes and the newly imposed complexities in sales tax filing procedures.
He stated that these abrupt amendments have severely affected traders, industrialists, exporters, importers, and particularly small businesses across the country.
While appreciating FBR’s efforts towards digitalization and transparency, President emphasized that the manner in which these reforms have been implemented has led to increased difficulties for the business community and cast a negative impact on the national economy. “Business owners are now forced to hire tax consultants even for basic sales tax submissions, increasing their cost of doing business,” he said. The technical complications of HS Code compliance and the H1 annexure have made timely tax filing an overwhelming challenge, resulting in delayed government revenue and widespread confusion among compliant taxpayers.
He further noted that the business community’s trust in FBR, which was already fragile, has now been further shaken. “Traders believe that the taxes they pay are not reinvested in their welfare, infrastructure, or business facilitation,” he added. This has pushed many small and medium traders back into the informal economy, dealing a significant blow to Pakistan’s economic formalization drive. Exporters are also suffering due to port clearance delays, causing disruptions in export schedules and damaging Pakistan’s global market reputation.
Citing Malaysia as a successful example, Chamber president stated that their Royal Customs Department implemented HS Code digitization in a phased manner, supported by proper training and stakeholder consultations. This approach helped build trust while ensuring smoother compliance.
He appealed to the Prime Minister of Pakistan to take immediate notice of the situation and direct FBR to refrain from making such technical amendments without full consultation with relevant stakeholders. He stressed that all policy implementations must be gradual, supported with detailed training programs especially for small and medium-sized enterprises (SMEs) to help them adapt to the new systems.
He also demanded that FBR suspend all penalties and late fees during this transitional phase, and establish help desks in every chamber and trade organization to assist the business community. Most importantly, he emphasized that restoring trust in FBR requires transparent reinvestment of tax revenues into business welfare, infrastructure enhancement, and trader support initiatives.
“Pakistan’s economic revival is impossible without the cooperation of the business community, and that cooperation can only be earned through consultation, transparency, and facilitation,” concluded HCSTSI President Muhammad Saleem Memon.
Copyright Business Recorder, 2025
