Islamabad, June 16, 2025: Prime Minister Muhammad Shehbaz Sharif on Monday took serious notice of media reports regarding the arrest of tax defaulters and emphasized that no legal provisions should be used to harass taxpayers or the business community. He directed the formation of a special committee to review the matter comprehensively.
Chairing a high-level meeting to review Federal Board of Revenue (FBR) policies, the prime minister made it clear that the dignity and respect of businesspersons and investors must be safeguarded at all costs.
“Unwarranted harassment of genuine taxpayers is unacceptable. The government will not tolerate any misuse of the law against the business community,” PM Shehbaz was quoted as saying in a statement issued by the PM Office Media Wing.
The meeting was attended by federal ministers for Defence, Law, Commerce, Economic Affairs, and Information and Broadcasting, along with the Minister of State for Railways, the FBR Chairman, economic experts, and senior officials.
Officials briefed the prime minister that legal provisions for arresting sales tax defaulters have existed since the 1990s. However, in light of recent judicial interpretations, amendments were being considered to make these laws more coherent and legally sound.
Following a detailed discussion, the prime minister issued the key directives including arrest provisions under tax laws should be limited strictly to extraordinary cases involving significant defaults, an external oversight mechanism should be established to review and regulate any arrest-related actions under tax laws, clear safeguards must be included in the upcoming Finance Act to prevent misuse of such legal powers and all allied parties in the ruling coalition should be consulted in the legislative process concerning tax law amendments.
The newly formed special committee will examine the existing legal framework, suggest reforms, and ensure that taxpayers’ rights are protected while maintaining the integrity of the tax system.
The development comes amid concerns from the business community over the possible misuse of arrest powers by tax authorities under proposed amendments in the Finance Bill 2025–26.
