Pakistan’s business community gave a cautious response to the Rs 18.7 trillion federal budget for 2026-27. While they welcomed several tax relief measures, they criticised the government’s lack of a clear strategy for manufacturing, exports and long-term economic growth.
Business leaders said the budget provides selective relief. However, they argued that high energy costs and missing industrial reforms will continue hurting businesses.
Business groups welcome tax relief
FPCCI President Atif Ikram Sheikh welcomed several proposals included in the budget. These measures include lower super tax rates, reduced taxes for salaried individuals and relief for exporters.
Additionally, the government abolished Capital Value Tax on foreign assets and removed Federal Excise Duty on international business-class travel. It also extended the 0.25 percent final tax on IT exports until June 2029.
However, Sheikh expressed concern over weak investment and savings. He also questioned the ambitious revenue target and petroleum levy, warning that both could fuel inflation.
Furthermore, he criticised the government’s decision to ignore key FPCCI proposals. These included restoring the Final Tax Regime for exporters and reducing corporate taxes.
Export sector seeks stronger reforms
Meanwhile, OICCI described the budget as a balanced attempt under difficult economic conditions. However, it argued that compliant taxpayers continue carrying most of the tax burden.
The chamber also welcomed plans for a National Faceless Assessment Centre. Nevertheless, it criticised the absence of tax reforms for oil refineries and delayed tax refunds.
Similarly, KCCI Chairman Zubair Motiwala said the budget offers no meaningful incentives for exporters. He criticised the government’s refusal to restore the Final Tax Regime.
Moreover, he said expensive electricity, high industrial costs and unresolved circular debt remain major obstacles. Therefore, business leaders concluded that the budget neither damages nor significantly improves Pakistan’s economic outlook.
