HYDERABAD: Leaders of business community have criticised federal and provincial government budgets 2025-26 saying that although some reforms are to be introduced, tax policies appeared shortsighted.

In their separate statements, the leaders welcomed developmental goals and said that still there remained a glaring lack of practical relief and structural support for small traders, manufacturers and broader business community.

Coordinator Businessmen Panel Progressive of FPCCI (Federation of Pakistan Chambers of Commerce and Industry) Adeel Siddiqui has criticised what he described as shortsighted tax policies reflected in the federal budget, and underscored the need for long-term industrial strategy.

He said if Pakistan has to compete globally, it must reduce corporate tax burdens incentivise renewable energy and provide a stable economic vision.

Siddiqui said that the budget introduced some positive points for salaried class that were much awaited. However, he expressed his concern over missed opportunities to strengthen industry competitiveness and renewable energy adoption.

He was highly critical of the levy of 18pc sales tax on solar plates at a time when Pakistan faces energy crisis. He said that solar energy has become viable and was a cost-effective alternative for businesses and households.

Referring to the corporate tax burden to the extent of 45pc, he argued that while salaried individuals benefit from progressive tax reforms, the country’s industrial landscape would continue to face one of the highest corporate tax rates in the region.

Hyderabad Chamber of Small Traders & Small Industry (HCSTSI) President Mohammad Saleem Memon, senior VP Ahmed Idrees Chohan and VP Shan Sehgal also stated that the federal and Sindh governments mentioned developmental objectives, digital reforms and increased social sector allocations but there was a lack of practical relief and structural support for small traders, manufacturers and broader business community.

Memon said that initiatives like SME Policy 2024–27, digital reforms in FBR, introduction of an automated refund system and faceless audits were commendable steps. However, without timely and effective implementation, these initiatives may remain merely on paper. He cautioned imposition of new taxes on cash on delivery (COD), digital services and digital presence could impact small and emerging online businesses that were still in their nascent stages.

About Sindh budget, Memon welcomed increased allocations in education, health and infrastructure development, and abolition of several local levies including professional tax, entertainment duty and drainage cess, which may provide financial breathing space to public.

He regretted absence of direct financial packages, subsidy schemes, or ease-of-doing-business initiatives for SMEs, markets and industrial zones within provincial budget.

Chamber leadership condemned insertion of Section 37AA into Sales Tax Act, calling it unconstitutional, undemocratic and anti-business. It asserted that granting FBR power to arrest trader without warrant, merely based on suspicion and detain them for 14 days was abuse of authority and a violation of human rights. The leaders demanded withdrawal of this provision.

They condemned federal allocation of a Rs15 billion in 2025–26 for Sukkur-Hyderabad Motorway and noted project may not be completed even in next decade at this pace.

The business community demanded immediate and substantial funding to expedite the project.

Published in Dawn, June 16th, 2025