KATI REJECTS SECTION 37A & 37B: TAX EVADERS ROAM FREE HONEST TAXPAYERS FACE ARRESTS

President of the Korangi Association of Trade and Industry (KATI), Junaid Naqi, has strongly criticized the imposition of Section 37A of the Sales Tax Act, describing it as an unjust and counterproductive measure that targets compliant taxpayers instead of going after actual tax evaders.

He highlighted that although the government missed its massive tax collection target of Rs. 12.5 trillion, it was the business community that contributed more than Rs. 11 trillion. Now, with a new target of Rs. 14 trillion, Junaid Naqi said the government should have engaged stakeholders to craft a realistic and targeted approach against evasion, rather than introducing broad, coercive laws like Section 37A.

“Those who evade taxes—the real thieves and dacoits in the system—continue to enjoy complete freedom. These non-filers are free to travel, shop, and operate openly without any fear or accountability,” he remarked. “Meanwhile, honest and registered taxpayers are being unfairly subjected to harassment.”

He stressed that while the Federal Board of Revenue (FBR) must achieve its revenue targets, doing so at the expense of law-abiding taxpayers is unacceptable. “To address misconduct by just 2% of the tax base, the remaining 98%—who consistently fulfill their obligations—are now vulnerable to arrest, based on the judgment of just three officials with powers even greater than the police. This is deeply unjust.”

Calling Sections 37A and 37B “black laws,” Junaid Naqi stated:
“We categorically reject these oppressive provisions. All seven industrial town associations of Karachi stand firmly united under the umbrella of the Karachi Chamber of Commerce & Industry (KCCI). From Gilgit-Baltistan to Gwadar, the business community across Pakistan is speaking with one voice—we are united in our demand for the immediate repeal of these draconian laws.”


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