A leading economic think tank has called on the government to immediately withdraw the Tax Laws (Amendment) Ordinance 2025, warning it threatens Pakistan’s business climate and judicial independence.
The Economic Policy and Business Development (EPBD) group said the ordinance, signed by the President on May 2, grants tax authorities sweeping powers that could disrupt cash flows, undermine legal safeguards, and damage investor confidence.
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The group highlighted three key changes that raised serious concerns:
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Immediate Tax Recovery: Amendments to the Income Tax Ordinance now allow authorities to demand immediate payment once courts decide cases—removing established legal buffers and stay provisions.
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On-site Monitoring: A new section permits tax officials to be physically present at business premises for ongoing monitoring, raising fears of operational disruption and privacy invasion.
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Broader Seizure Powers: Changes to the Federal Excise Act allow any government officer—not just tax officials—to confiscate goods over technical violations, increasing business uncertainty.
EPBD said these measures were unjustified, especially as tax compliance had improved despite economic challenges. It warned the ordinance could deter both domestic and foreign investment, reduce economic productivity, and burden businesses with intrusive oversight.
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The group also raised constitutional concerns, saying the ordinance weakens judicial authority and sets a troubling precedent for governance in Pakistan.
EPBD urged the government to withdraw the ordinance, allow parliamentary debate, and engage stakeholders. It also recommended restoring legal safeguards, avoiding blanket monitoring, and focusing on expenditure reforms rather than harsh tax measures.