FRIA seeks targeted relief for SMEs and industry in upcoming budget
The Ferozepur Road Industrial Association (FRIA) has urged the federal government to provide targeted relief for small and medium-sized enterprises (SMEs) and manufacturing units in the upcoming Federal Budget 2025-26, warning that without immediate reforms, industrial stagnation could deepen further.
FRIA Chairman Shahbaz Aslam stressed the need for an industry-focused budget, proposing key interventions to lower production costs, streamline taxation, and ensure reliable access to energy at affordable rates.
“Pakistan's industrial base, particularly SMEs, is under immense pressure due to inflation, high energy prices, and weak domestic demand. The upcoming budget must be designed to reverse this trend by creating space for businesses to grow,” he stated.
He highlighted that despite SMEs forming over 90% of business entities, contributing around 40% to the GDP, and employing a major share of the urban workforce, they remain underrepresented in fiscal policy planning. “Without targeted incentives for this sector, economic recovery will remain elusive,” he added.
Shahbaz Aslam recommended a reduction in electricity and gas tariffs for industries, especially SMEs, along with immediate automation and clearance of sales tax refunds to ease cash flow issues. He called for a cut in sales tax and corporate tax rates to incentivize compliance and broaden the tax base.
FRIA also proposed a five-year tax exemption and audit-free status for newly registered SME industries, particularly those launched in rural and underdeveloped areas. These measures, he said, would promote formalization, decentralize industrial growth, and generate employment across regions.
The FRIA chairman further advocated for low-interest industrial credit schemes and removal of unnecessary duties on raw materials to support domestic manufacturing. “Tax burdens and financing constraints have slowed down production and pushed many businesses towards closure. We need real solutions, not cosmetic changes,” he said.
He emphasized the importance of engaging industrial associations in transparent budget consultations to ensure that policy reflects the ground realities of Pakistan’s manufacturing sector.
“SMEs and industries are the pillars of any economy. If we want sustainable development, we must support them now,” Shahbaz Aslam concluded.
FRIA will soon submit its formal set of recommendations to the Ministry of Finance ahead of the finalization of the federal budget.