ISLAMABAD – The business community observed a partial strike on Saturday in response to the tax measures and expanded arrest powers granted to the Federal Board of Revenue (FBR) under the Finance Act FY26.
The Pakistan Hosiery Manufacturers and Exporters Association (PHMA) joined hands with chambers and trade bodies across the country on Saturday in a partial industrial shutdown to protest against the controversial arrest powers granted to the FBR under Section 37AA of the Income Tax Ordinance.
The strike was held on the joint call of the Lahore Chamber of Commerce and Industry and other business groups demanding immediate withdrawal of anti-industry laws introduced through the federal budget.
Zonal Chairman of PHMA Abdul Hameed, along with former chairmen Shafiq Butt and Naseer Butt, announced the closure of hosiery units as part of the countrywide strike, warning that such legislation would only deepen the crisis facing Pakistan’s export-oriented sectors. The PHMA leadership said the business community could no longer stay silent while draconian laws continued to erode the confidence of investors and exporters. They said the participation of PHMA in this strike was not symbolic but a complete operational shutdown in protest against what they termed economic strangulation by the government’s policies.
Abdul Hameed expressed grave concern over Section 37AA, which gives FBR officers the authority to arrest businesspersons without due process or prior investigation, merely on suspicion of tax evasion. He said this law is a clear violation of constitutional rights and a serious blow to the already fragile industrial environment of Pakistan. Abdul Hameed termed it a “black law” that legitimizes harassment of genuine taxpayers and exporters, adding that the textile and hosiery sector is already grappling with liquidity shortages, inflated utility tariffs, and a shrinking export order pipeline.
PHMA former chairman Shehzad Azam Khan said their protest goes beyond just one law. He reiterated key demands of the value-added textile sector, including restoration of the normal tax regime, a reduction in the discretionary powers of FBR officials, and immediate reinstatement of the original structure of the Export Facilitation Scheme (EFS). He criticized the sudden and unexplained changes made in EFS parameters, which he said had undermined the very foundation of a system meant to support exports. By altering the EFS framework without consultation, the government has left exporters with unmanageable procedural burdens and operational uncertainty, they added.
The strike call had received overwhelming support from nearly all chambers of commerce and industrial associations across the country, including Karachi, Faisalabad and Sialkot. Thousands of industrial units, large and small, remained closed for the day as a mark of protest. PHMA leaders warned that if the government failed to meet the business community’s demands, the protest could enter the next phase, including indefinite closures and international complaint filings by exporters who fear losing credibility among global buyers due to erratic policymaking at home.
Shafiq Butt also demanded the withdrawal of unreasonable taxes imposed on cash withdrawals and raised serious objections to the e-invoicing system that has made compliance nearly impossible for small and medium-sized enterprises.
Former chairman Shafiq Butt said the government’s attempt to boost revenue by criminalizing business activity is short-sighted and self-destructive. He warned that such coercive measures would push more businesses into the undocumented sector rather than increase tax compliance. Naseer Butt echoed these concerns, saying industrial output is already below 60 percent capacity in several textile zones, and any further disruptions would be disastrous for exports and employment. PHMA leaders also urged Prime Minister Shehbaz Sharif and Finance Minister Muhammad Aurangzeb to hold urgent consultations with business stakeholders instead of relying solely on bureaucratic advice. They said restoring business confidence through fair taxation, regulatory stability, and policy consultation is the only path forward. They reminded the government that Pakistan’s economic recovery depends heavily on exports, and any attack on the export base is equivalent to sabotaging the country’s future.
