Transporters Voice Concerns Over Increased Withholding Tax

Karachi: Prominent transporters have voiced significant apprehension regarding governmental policies, specifically contesting the rise in withholding tax on logistics services from 4% to 6%.

During a press briefing on Monday, representatives emphasized that the most critical challenge is the federal government’s recent budgetary decision for 2025-2026 to elevate the withholding tax on logistics. They cautioned that implementing this measure would severely impair the public service sector, particularly the already strained goods transport industry, which is essential to Pakistan’s economic structure.

According to them, an increase in the withholding tax will intensify difficulties for small to medium-sized transporters, potentially fostering corruption and unlawful practices. This could negatively impact both governmental revenue collection and the established legal framework.

The transporters stated that they promptly communicated their serious objections to the Federal Finance Minister and the Chairman of the FBR immediately after the budget was announced. They also highlighted that the logistics and transport sector contributes approximately 12.5% to Pakistan’s GDP.

They further noted that the industry is consistently burdened by frequent and seemingly arbitrary increases in toll tax rates, along with the abrupt introduction of new toll plazas, many operating without clear justification. These factors further deplete the financial resources available to transporters.

The transporters urged relevant parties to acknowledge the crucial role of an efficient transport sector for all economic activities. Weakening this crucial component of the economy would directly compromise the availability of essential goods nationwide, significantly affecting everyday life for ordinary citizens.

They firmly requested the immediate reversal of the proposed 2% increase in the withholding tax on logistics services. Maintaining the existing 4% tax rate, they argued, is crucial for fostering a fair and sustainable environment for the transport sector.

Key figures who spoke at the press conference included Rana Asim Shakoor from the Fleet Operators Association of Pakistan, Malik Sher Khan Awan from the Karachi Goods Carrier Association, Imdad Hussain Naqvi representing the Pakistan Car Careers Association, Malik Shehzad Awan of Awan Transport Association, Shabbar Malik from the Sindh Goods Truck Trailer Owners Association, Ghulam Yasin Khan from the United Goods Transport Alliance, Muhammad Adeel Abbasi of Pakistan Goods Mazda Owners Association, Nisar Hussain Jafari of Pakistan Goods Transport Alliance, Mohammad Ashraf of Transport Career Association, Roofi Jan of Transporters of Goods Association, Muhammad Ramadan o Local Goods Transport Association, and Javed of All Pakistan Supreme Council of Goods Transport.