RCCI Expresses Concerns Over 16% GST On Rent, Arrest Powers

RCCI expresses concerns over 16% GST on rent, arrest powers

RAWALPINDI, (UrduPoint / Pakistan Point News - 20th Jul, 2025) The Rawalpindi Chamber of Commerce and Industry (RCCI) has expressed strong reservations over recent policy measures announced by the Punjab government, including the imposition of a 16% sales tax on commercial property rent and the introduction of arrest powers for non-compliance with the newly mandated minimum wage.

RCCI President Usman Shaukat, in an official statement issued on Sunday, criticized the recent decisions of Punjab Revenue Authority (PRA) “This new tax regime will significantly raise the cost of doing business for tenants, particularly retailers, across Punjab,” he said and added that the decision will discourage investment, push legitimate businesses into the informal sector, and further strain an already struggling retail and real estate market.

Shaukat further said that the new tax would exacerbate the ongoing slowdown in the property and retail sectors, both of which are still reeling from post-pandemic economic challenges.

“Such measures are counterproductive and will undermine business confidence in the province", he said.

In addition, the RCCI president voiced strong opposition to a clause in the recently passed Punjab budget that allows for the arrest of business owners failing to implement the new minimum wage of Rs. 40,000.

“This coercive approach is deeply concerning and must be withdrawn immediately,” he said. He observed that thos would open the door to potential misuse by enforcement authorities and would only lead to harassment of legitimate businesses.

While acknowledging the importance of fair wages, Shaukat emphasized the need for economic policymaking to be grounded in current market realities.

“With national inflation now at a historic low of 6%, the rationale behind such a steep wage hike is questionable. A more balanced and consultative approach is needed to ensure economic growth, job creation, and industrial sustainability", the RCCI president.

The RCCI called on the Punjab government to review both measures and engage in meaningful dialogue with the business community to ensure that policies promote, rather than hinder the economic development.