By Commerce Reporter
ISLAMABAD: Senior Vice President of the Lahore Chamber of Commerce and Industry (LCCI) Tanveer Ahmed Sheikh has voiced concern over what he described as the risk of “arbitrary exercise of authority” after the Federal Constitutional Court (FCC) upheld tax officials’ powers to conduct searches without prior notice under Section 175 of the Income Tax Ordinance, 2001.
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In a statement issued on Friday, Sheikh clarified that the business community respects the judiciary and the constitutional framework, but stressed that practical implementation of such powers must not lead to arbitrary or excessive action.
“Our concern is not with the honourable court’s interpretation of the law,” he said. “However, experience shows that discretionary powers, if not accompanied by strict oversight and accountability, can at times be misapplied at the operational level.”
The FCC recently ruled that tax commissioners or authorised officers are empowered to access business premises and records without prior notice for enforcement purposes, even in the absence of pending proceedings.
Sheikh noted that while enforcement of tax laws is essential for national revenue, there have been longstanding complaints from segments of the business community regarding inconsistent practices during inspections and raids.
“Arbitrary actions or the perception of misuse can damage trust between taxpayers and authorities,” he observed. “This ultimately affects documentation efforts, voluntary compliance and investor confidence.”
He urged the Federal Board of Revenue and relevant ministries to introduce clearer procedural safeguards, including written authorisations, digital record of proceedings, and transparent complaint redress mechanisms to prevent potential abuse.
“A structured and accountable enforcement regime will strengthen the credibility of institutions,” he said, adding that responsible businesses have nothing to fear from lawful scrutiny conducted within defined legal boundaries.
Sheikh reiterated that the LCCI supports fair taxation and documentation of the economy but emphasised that enforcement powers must be exercised judiciously, proportionately and in line with principles of natural justice.
He concluded by calling for formal consultations between tax authorities and chambers of commerce to develop mutually agreed protocols that protect both state revenue interests and legitimate business operations.
