LAHORE :S. M. Tanveer, Patron-in-Chief of the United Business Group (UBG), has raised serious concerns over the Punjab government’s decision to impose a 16% sales tax on commercial property rentals, warning that the move could have far-reaching consequences for the business community.
Calling the measure economically flawed and legally questionable, Tanveer cautioned that the added tax burden would significantly increase the cost of doing business in the province and further strain an already fragile investment climate.
“Renting commercial space in Punjab has now become prohibitively expensive,” he said. “Retailers and small entrepreneurs, already under intense financial pressure, will struggle to absorb such a drastic increase in operating costs.”
He warned that punitive measures like this risk pushing tax-compliant businesses into the informal economy, eroding the formal sector’s stability and undermining government revenue in the long run.
Tanveer further criticized the lack of consultation and impact assessment prior to implementing the tax, saying that such unpredictable policy shifts deter both domestic and foreign investors.
“The introduction of this sales tax is more than just a financial blow—it sends a troubling message about the ease of doing business in Punjab,” he said, adding that it may lead to job losses, contraction of the formal retail sector, and declining investor confidence.
He urged the government to immediately reconsider the decision, and instead adopt more inclusive, transparent, and investment-friendly reforms that encourage sustainable economic growth, enhance exports, and genuinely broaden the tax base.
