April 13, 2025 Karachi, April 13, 2025 – The Karachi Chamber of Commerce and Industry (KCCI) has strongly urged the federal government to eliminate the Value Added Tax (VAT) for commercial importers in the forthcoming federal budget for the fiscal year 2025-26. In a detailed set of tax proposals, the KCCI called for setting the VAT rate at 0% for commercial importers, emphasizing the need for uniformity in tax treatment and addressing long-standing disparities in the current taxation framework. According to the KCCI, while maintaining the standard Sales Tax rate at 18%, reducing the VAT on commercial importers from 3% to 0% will create a level playing field across all sectors. The chamber highlighted that, at present, only 90% of Sales Tax is adjustable at the point of sale, resulting in a cash flow crunch and financial burden for manufacturers and downstream industries. The KCCI also criticized the inconsistency in VAT application. While industrial importers remain exempt from the 3% VAT, commercial importers are forced to bear this additional cost, leading to distortions in trade practices and opportunities for exploitation under non-uniform tax laws. The chamber listed a wide range of HS codes covering textile and synthetic fiber products to underscore the impact on critical imports. The economic implications of retaining the 3% VAT were laid out by KCCI as follows: • Increased Tax…