LAHORE, Jun 12 (APP): Federation of Pakistan Chambers of Commerce & Industry (FPCCI) Friday acknowledged the presentation of Rs. 18.7 trillion Federal Budget 2026-27, commending the government’s efforts toward macroeconomic stabilization – while urging a stronger transition toward sustained economic and industrial growth.
FPCCI President Atif Ikram Sheikh, while addressing the business community and media in a post-budget session, he congratulated Prime Minister Muhammad Shehbaz Sharif and the government’s economic team on their third consecutive federal budget, noting that it reflects a vital continuity of economic policy.
He said, Pakistan’s economy has shown encouraging signs of stability; with GDP growth improving to 3.7 percent, the fiscal deficit reducing to 0.7 percent of GDP, and public debt servicing costs declining by 23 percentp – the economy has undeniably moved toward fiscal discipline. However, the Federal Budget is not merely a statement of revenue and expenditure; it is a critical policy document that must dictate our transition from sheer stabilization to robust economic growth, he added.
Appreciating relief and accepted proposals, he
said that several key recommendations of the FPCCI were incorporated into the budget, signaling a shift toward a “Growth-Driven Model.” The key budget measures welcomed by the business community included
Tax Relief: the abolishment of the Capital Value Tax (CVT) on foreign assets and the elimination of the Federal Excise Duty (FED) on international business class travel.
Super Tax Reforms: The abolishment of the Super Tax on six slabs up to Rs. 500 million, a reduction from 10 percent to 8 percent for incomes exceeding Rs. 500 million, and a complete waiver for exporters.
Salaried Class Support: The elimination of the surcharge on salaried individuals and considerable reductions in tax rates across all slabs.
Sector-Specific Incentives: The extension of the 0.25 percent final tax exemption on IT exports until June 2029, and the reduction of Withholding Tax (WHT) for filers in the construction sector by 50 percent (from 2.5 percent to 1.25 on purchase, and 5.5 percent to 2.75 percenton sale).
Retail Digitalization: A new one percent fixed sales tax scheme for retailers with annual sales under Rs. 200 million, exempting them from POS machines and routine audits via a green QR code system.
Exporter Relief: A revised 1.25 percent Minimum Tax for exporters, replacing the previous one percent Minimum and one percent Advance Tax structure.
Core Economic Concerns and Unaddressed Proposals
The FPCCI President, however, expressed concerns that Investment-to-GDP ratio remains stagnant at 14.38 percent, and the savings rate has declined to 14.13 percent, while urban poverty has surged from 11 percent to 17 percent, reflecting a significant downturn in core business activities.
Atif Ikram Shikh also objected the Federal Board of Revenue’s (FBR) aggressive tax collection target of Rs. 15.2 trillion (a 17 percent increase) and the petroleum levy target of Rs. 1.7 trillion (an 18 percent increase).
Furthermore, he said, the budget did not contain several critical FPCCI proposals designed to spur industrialization and export competitiveness such as restoration of the Final Tax Regime (FTR) for exporters; reductions in the corporate tax rate and turnover tax under Section 113; elimination of the Minimum Tax Regime and Further Tax; withdrawal of the repeal of Section 8B of the Sales Tax Act and broader systemic digitalization of the economy.
Atif Ikram Sheikh highlighted that the proposed measures give mixed signals regarding the support for sustained industrialization, job creation, and higher economic growth, asserting that the next phase of reforms must hyper-focus on productivity enhancement, export diversification, and lowering the cost of doing business.