ISLAMABAD: The American Business Council (ABC) of Pakistan on Wednesday voiced strong concerns over new tax measures and expanded arrest powers for tax officers included in the Finance Bill 2025-26, warning that the changes could undermine investor confidence and disrupt business operations.

The council, which represents US investors and multinational companies, urged the government to reconsider the Federal Board of Revenue’s (FBR) authority to arrest and prosecute chief executive officers and chief financial officers without due process, as well as the introduction of new digital tax measures.

According to a statement, “The ABC has serious concerns over the FBR officers’ extraordinary powers to arrest and prosecute CEOs and CFOs without due process. This step bypasses established legal safeguards, risks misuse of authority and may lead to potential harassment of senior executives.”

The bill also introduces a Digital Presence Proceeds Tax, imposing a five per cent tax on payments to foreign digital service providers without a physical presence in Pakistan.

The ABC cautioned that costs for vital digital services like cloud computing, digital ads, and SaaS platforms would significantly increase, impacting startups, SMEs, tech firms and freelancers.

Published in Dawn, June 19th, 2025