KARACHI: Fleet operators, goods transporters, advertisers and yarn merchants on Monday strongly criticised the federal government’s decision to increase the withholding tax (WHT) on specified services from 4pc to 6pc, warning that the move would cripple struggling sectors, discourage formalisation, and further strain Pakistan’s fragile economy.

At a press conference held at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), representatives of the Fleet Operators Association of Pakistan (FOAP) and allied transport bodies said the hike in WHT — effective from July 1 — would be disastrous for small and medium-sized logistics businesses.

They argued the increase would push many operators out of the formal tax net in a desperate bid to stay afloat, inevitably fuelling corruption and weakening regulatory enforcement.

The logistics and transport sector contributes around 12.5pc to Pakistan’s GDP. “We have always paid our fair share of taxes, but such punitive measures are unsustainable,” said FOAP leaders. They also complained of rising toll taxes and the imposition of new, often unjustified, toll plazas that are further squeezing the industry’s margins.

They demanded the government withdraw the proposed 2pc WHT hike and retain the current 4pc rate to ensure sustainability for the sector. Among those addressing the press conference were Rana Asim Shakoor (FOAP), Malik Sher Khan Awan (Karachi Goods Carrier Association), Imdad Hussain Naqvi (Pakistan Car Carriers Association), Malik Shehzad Awan (Awan Transport Association), and other representatives from various goods transport alliances.

The Pakistan Advertisers Association (PAA) also voiced strong objections to the 6pc WHT on advertising and other specified services.

Pakistan Yarn Merchants Association Chairman Muhammad Saqib Goodluck criticised the FY26 budget for failing to differentiate between commercial and industrial imports clearly.

Published in Dawn, June 24th, 2025