KATI concerned at imposition of 18pc GST on imported solar panels

KARACHI: The President of the Korangi Association of Trade and Industry (KATI), Junaid Naqi, has termed the Federal Budget 2025-26 disappointing, stating that it neither meets the requirements of the industrial sector nor fulfils the expectations of the general public.

Junaid Naqi said that the budget remains heavily reliant on indirect taxation, particularly sales tax, which continues to increase the cost of doing business and contributes to inflation. He pointed out that the government has set an ambitious revenue collection target of Rs14.131 trillion and a non-tax revenue target of Rs5.167 trillion, both of which, he claimed, are disconnected from ground realities.

Naqi further highlighted that while the government has projected GDP growth at 4.2% and inflation at 7.5%, the proposed measures to achieve these goals are inadequate and unrealistic.

Expressing serious concern over the persistent exemption of the agricultural sector from the tax net, Naqi emphasized that despite contributing 26% to the national GDP, agriculture accounts for less than 1% of the total tax revenue, exposing a glaring imbalance in the fiscal framework.

He noted that while the overall budget outlay stands at Rs17.6 trillion, the business community had hoped for balanced and fair policies that would ease the burden on existing taxpayers. Instead, he said, the government has once again placed the weight of fiscal adjustments on the industrial sector without offering sufficient relief to offset rising costs of production.

While allocations include Rs2.55 trillion for defense and Rs1 trillion for the Public Sector Development Programme (PSDP), Naqi lamented the absence of tangible initiatives to promote industry, exports, or employment generation.

The KATI President also raised concerns over the proposed 18% sales tax on solar panels and the imposition of heavy petroleum levies and a carbon tax, warning that these steps will further inflate prices and escalate the cost of doing business.

While acknowledging minor adjustments such as the reduction in super tax rates and changes in income tax slabs, Naqi asserted that the overall budget fails to restore investor confidence or provide meaningful support to the business community. Calling for urgent reforms, he urged the government to reduce its dependence on indirect taxes and focus on broadening the tax base through direct measures. “Without fundamental tax reforms, sustainable economic recovery will remain out of reach,” he said.

Naqi concluded that the current budget falls short of addressing the aspirations of both Pakistan’s industrial sector and its citizens. He urged the government to adopt a realistic, inclusive, and growth-oriented fiscal strategy moving forward.

Copyright Business Recorder, 2025