Industrialists demands review of taxes on FMCG, food industries

HYDERABAD, (APP - UrduPoint / Pakistan Point News - 17th May, 2026) Hyderabad SITE Association of Trade and Industry (HSATI) has complained that the system of withholding and advance taxes imposed by the Federal board of Revenue (FBR), especially on the food industry, is causing severe difficulties and administrative complications for the business community. 

The association's Chairman Zubair Ghangra in a statement issued on Sunday said the system was practically creating unnecessary pressure on various stages of the supply chain, which was affecting the pace of industrial activities.

He added that a large part of the retail market in Pakistan still consisted of unregistered shopkeepers, due to which the tax burden was mainly shifted to manufacturers, wholesalers and distributors. "As a result of this imbalance, not only the cost of doing business is increasing but also disproportionate pressure is increasing on the organized and registered sector," he pointed out.

Ghangra said that the situation had affected the cash flow of the Fast Moving Consumer Goods (FMCG) and food industries, while the documentary compliance requirements had also increased to an unnecessary extent. "As a result, the ease of doing business is being affected and additional pressure is being created on low-margin items, which ultimately affects both the consumers and the economy," he underscored.

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The association's chairman observed that the system was rather indirectly strengthening the informal economy, as unregistered market players remain outside the ambit of that tax net while the burden fell on the registered entities. 

"It is not possible to establish an effective and fair tax system without removing this imbalance," he emphasized.Ghangra urged the government to urgently and comprehensively review the withholding tax imposed on FMCG and basic food items under sections 236G and 236H and to reform the same in a manner that made the system business-friendly, simple and practically enforceable. 

He underlined that the tax policy needed to be structured in such a way that it not only enhanced revenue but also ensured industrial development and business stability. 

He told that the HSATI was in constant touch with the government and relevant institutions on that important issue so that a balanced, transparent and sustainable tax system can be created for  the benefit of both the country's economy and industry.