Federal Budget termed detrimental to industry
KARACHI: Former Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and former Senior Vice President of the Karachi Chamber of Commerce and Industry (KCCI), Muhammad Hanif Lakhani has opposed the taxation of petroleum products, arguing that it would adversely affect the general public.
Lakhani also expressed disappointment over the State Bank of Pakistan's decision to maintain the policy rate at a high 11%, calling it overly cautious and a negative move that is inappropriate given the declining inflation and weakening industrial competitiveness.
He termed the Federal Budget 2025-26 as detrimental to the industry. He criticized the government for granting Federal Board of Revenue (FBR) officers the powers equivalent to a Station House Officer (SHO), essentially allowing them unchecked authority. Additionally, he said the imposition of an 18% tax on the IT sector is an ill-advised decision.
Lakhani pointed out that the federal budget contains numerous anomalies that the Ministry of Finance must rectify. He urged the government to withdraw harsh and anti-business tax measures before the Finance Bill is passed in Parliament. He warned that granting such strict powers to the FBR in the name of increasing tax collection will make it extremely difficult to achieve the set tax targets.
He also criticized the government for not reducing the interest rate, which he believes should have been brought down to 7%, especially when inflation has declined. He stated that decisions are not being made based on ground realities.
Lakhani also highlighted the absence of a policy for alternative energy sources. Instead, the government imposed an 18% sales tax on solar panels, which will increase their prices.
Furthermore, he opposed the imposition of taxes on e-commerce transactions, noting that unemployed youth were earning through e-commerce, and the government should either provide jobs or not take away their means of livelihood.
He did, however, support the move to bring non-filers into the tax net and stated that the imposition of a 10% sales tax in FATA and PATA is a positive step that will benefit the government and curb smuggling.
Copyright Business Recorder, 2025
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