Federal Budget: Nothing for exporters, nothing for Karachi: KCCI

KARACHI: Business leaders at the Karachi Chamber of Commerce and Industry (KCCI) gave a mixed response on the federal budget 2026-27, with the chamber’s top voices united on one point: the budget offers nothing for exporters and nothing for Karachi.

Despite the federal government’s own economic survey claimed about improved economic indicators, Zubair Motiwala, Chairman of BMG Group at a post-budget presser said the proposed budget offered no incentive to the export sector. “If the fiscal space exists as shown in the economic survey, its benefits should be passed on to the public,” he said, adding: “There is nothing in this budget for exporters. If exports don’t grow, where will the dollars come from ”

The government has declined a KCCI proposal to replace the minimum tax on exporters with a fixed tax regime, a long-standing demand of the business community, while, the budget proposed reducing the minimum tax rate from 2 percent to 1.5 percent.

“The measures proposed in this budget are not for broadening the tax base but to squeeze the already registered taxpayers,” Motiwala said.

On energy, he was equally critical of the budget’s ‘complete silence’. No measures were proposed to reduce gas or power tariffs or address circular debt, despite industries operating well below their production capacity, he said.

He argued the omission directly undermines any export competitiveness the government claims to have built through its economic reforms. The government also reneged on an earlier assurance to abolish excise duty, with no such proposal appearing in the budget, he maintained.

The sharpest criticism; however, was reserved for Karachi’s infrastructure allocation.

The budget earmarked only Rs. 10 billion for the K-IV water supply project against a stated requirement of Rs. 40 billion, a shortfall Motiwala said would push the project’s completion back by one to two more years, leaving millions in Pakistan’s largest city without adequate water supply. “This budget has nothing for Karachi,” he lamented.

Motiwala did acknowledge a handful of the positives. He welcomed the retention of 1 percent duty on EV kit imports, a 10 percent increase in the minimum wage, relief measures for salaried persons, and a reduced withholding tax on the construction sector.

He also expressed support for the introduction of a faceless income tax system and electronic returns filing, saying both initiatives would reduce human interaction in tax offices and help curb corruption.

However, acting President KCCI Muhammad Raza offered a broadly similar but a slightly more measured view. He welcomed the abolition of super tax and the removal of tax on real estate as positive steps, but said no concrete measures had been proposed to grow exports.

Former KCCI president Idrees Memon pointed to two specific unmet demands: the business community had called for eliminating the distinction between industrial and commercial imports, and exporters had sought restoration of the fixed tax regime. “Neither was addressed in the budget.”

Former Vice President Ibrahim Qasim urged the business community to withhold final judgment, cautioning that the full picture would only emerge once the Finance Bill is tabled. “The real

budget will be visible when the Finance Bill comes.”

The broader business community collectively flagged that energy cost reduction, which was their primary and most consistent demand, has entirely been ignored in this budget.

A large number of KCCI members attended the post-budget presser.

Copyright Business Recorder, 2026