The federal government will not amend the Finance Act 2025 to revise the expanded definition of tax fraud or the arrest procedure, Minister of State for Finance Bilal Azhar Kayani told the Senate Finance Committee.
The Federal Board of Revenue (FBR) will issue a detailed sales tax circular to address concerns raised by the business community.
He said the arrest provision is not a new law and assured that safeguards have been added to prevent misuse. Arrests will now require approval from a high-level FBR committee, replacing earlier powers held by Additional Commissioners.
He added that a committee has been formed to resolve business concerns within 30 days, and monthly meetings will be held with traders to review implementation.
KCCI President Muhammad Jawed Bilwani urged the removal of Section 37A(9), which allows arrest on suspicion. Committee members insisted that arrests must now be based on concrete evidence.
FBR Member (Inland Revenue – Operations) Dr. Hamid Ateeq Sarwar said amending the law at this stage would undermine Parliament. He said the upcoming circular will clarify that no arrest will be made without clear evidence and that erring tax officers will be penalized. A Grievance Redressal Committee has also been set up.
The committee chair said the law should remain in force if the FBR’s clarifications satisfy stakeholders. A representative from the Faisalabad chamber said their concern was misuse by field officers, not the arrest provision itself.