Expressing reservations over the federal government’s excessively optimistic revenue target, the Pakistan Industrial and Traders Associations Front (PIAF) has delivered a cautiously hopeful response to the Federal Budget 2025–26, acknowledging some promising initiatives while raising serious concerns over their practical implementation in the current economic climate.
PIAF Chairman Faheemur Rehman Saigol along with senior vice chairman Nasrullah Mughal and vice chairman Tahir Manzoor Chaudhry, stated that while the government has taken steps in the right direction—such as efforts to reduce taxpayer harassment, simplify returns for salaried individuals and SMEs, and promote digitalisation—these positives are overshadowed by the sheer scale of the Rs2,500 billion tax collection target, which he termed largely unfeasible without parallel reforms and enforcement capacity.
Faheemur Rehman Saigol welcomed the increase in the tax exemption threshold for salaried individuals to Rs1.2 million and the reduction in their tax rate from 5% to 1%, calling it a timely relief for the middle class already struggling with inflation. He also lauded the reduction in super tax and removal of duties on property transfers, describing them as “encouraging steps to promote formal investment and business confidence.
PIAF Chairman appreciated the budget’s emphasis on digital infrastructure and the broader rollout of e-invoicing and POS systems, noting that such initiatives have long been demanded by the documented business community. “These moves can help expand the tax net, but without strong implementation and safeguards, they may increase compliance burdens rather than ease them,” Saigol noted.
Nasrullah Mughal supported the government’s proposed measures to curb non-compliance—such as penalising tax defaulters and integrating digital monitoring systems—but stressed that aggressive enforcement should not discourage legitimate business operations. “Reforms must strike a balance between compliance and facilitation,” he added.
On development expenditure, he noted that the Rs1,000 billion Public Sector Development Programme (PSDP) allocation is inadequate to meet the country’s pressing infrastructure and industrial needs, especially without strong project prioritisation and transparent spending. He urged the government to not only allocate funds efficiently but also accelerate long-stalled infrastructure projects critical to trade and mobility.
“The biggest missing piece is the high cost of doing business. No relief has been offered to reduce crippling electricity tariffs or interest rates, which are the core issues stifling industrial growth and exports,” he remarked. Without addressing these cost factors, neither job creation nor sustainable growth is achievable.”
Tahir Manzoor Chaudhry criticised the continued neglect of industrial zones’ development needs and infrastructure funding, urging the federal government to ensure equitable allocation of resources in recognition of the industry’s contribution to the national economy. While supporting the government’s plan to phase out tax exemptions in FATA and PATA and expand the documented economy, he warned that overreliance on remittances and IMF-led adjustments is unsustainable in the long run.
Saigol stressed the importance of structural reforms to reduce the economy’s reliance on indirect taxation and external financing. He urged the government to work closely with stakeholders to shape policies that are inclusive, predictable, and aligned with ground realities.
He concluded that while the budget includes several positive signals, it lacks a grounded strategy to deal with the economic realities, businesses face on a daily basis. “We are ready to collaborate with policymakers to ensure that this budget becomes a practical tool for economic revival—not just an accounting exercise,” Saigol said.