BMP voices its concerns over delay in budget presentation
LAHORE: The Federation of Pakistan Chambers of Commerce and Industry's Businessmen Panel (BMP) has expressed serious concern over the government's decision to delay the presentation of the federal budget for the fiscal year 2025-26 and the possible imposition of additional levies, including a sharp hike in the petroleum levy.
The BMP Chairman and FPCCI former president Mian Anjum Nisar termed these developments deeply troubling for the already struggling business community and warned that such decisions would further strain the economy and damage investor confidence.
He said that the federal government recently shelved its plan to present the budget on June 2 and is now expected to unveil the fiscal plan on June 10. The delay has been attributed to Prime Minister Shehbaz Sharif's foreign tour as well as internal disagreements over the finalisation of expenditures. He said that this postponement creates unnecessary uncertainty at a time when the business environment is already fragile due to inflation, high energy costs, and sluggish growth.
Mian Anjum Nisar stated that the delay in the budget presentation sends a negative signal to the market, businesses, and foreign investors who are waiting for policy clarity. He said that businesses plan their fiscal year strategies based on expected policy announcements, and any delay hampers their ability to make timely decisions regarding investment, procurement, and employment. He added that the lack of transparency around budget planning is further eroding trust between the business community and the government.
The BMP is particularly concerned about the government's reported move to increase the petroleum levy, which currently stands at Rs78 per litre. The government is reportedly considering raising this levy further in order to finance a larger Public Sector Development Programme (PSDP) of Rs1 trillion for the next fiscal year. Mian Anjum Nisar warned that any additional levy on petroleum products would result in a significant increase in the cost of doing business, leading to a rise in inflation and further weakening the purchasing power of consumers.
He noted that fuel is a key input for industries, transportation, and agriculture, and any increase in its price has a ripple effect across the entire economy. Instead of increasing indirect taxes like the petroleum levy, Nisar urged the government to focus on broadening the tax base, curbing unnecessary expenditures, and implementing structural reforms to improve revenue collection without burdening businesses and the general public.
He also criticised the lack of stakeholder consultation in budget-making, especially when businesses are the biggest contributors to taxes and employment. Nisar said that the upcoming budget appears to be driven largely by the International Monetary Fund's directives, with little attention paid to the domestic realities faced by industrialists and exporters. He stressed that the government must engage with business leaders to frame policies that are sustainable and practical, rather than relying solely on external advice.
The BMP also raised concerns about possible cuts to subsidies and increased energy costs in the upcoming budget. Nisar warned that the business community will not be able to absorb any further increases in electricity and gas prices, as production costs have already reached unaffordable levels. He said that many industrial units, especially small and medium enterprises, are on the verge of closure due to high input costs and lack of support from the government.
The panel also criticised the government's handling of the circular debt issue in the petroleum sector. The plan to use inflated dividends from state-owned enterprises to clear circular debt lacks transparency and may lead to market distortions. Nisar said that instead of adopting temporary fixes, the government should address the structural flaws in the energy sector, including mismanagement, inefficiencies, and losses in transmission and distribution.
Nisar further said that the recent abnormal increase in the share price of Pakistan State Oil (PSO), despite its poor financial condition, raises serious questions. He supported the IMF's decision to seek more clarity before approving the government's plan and expressed concern over the exclusion of PSO from the debt retirement scheme.
Copyright Business Recorder, 2025
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