Hyderabad Chamber of Small Traders and Small Industries President Muhammad Saleem Memon, Senior Vice President Ahmed Idrees Chohan and Vice President Shan Sehgal have expressed their reaction to the federal budget 2026-27 and said that some positive economic and tax reforms have been included in the budget which are welcomed by the business community, however, more concrete and direct steps are needed to solve the problems of small traders, SMEs and small industries.
President Chamber Muhammad Saleem Memon said that the government’s move to reduce customs duty, additional customs duty and regulatory duty on raw materials and industrial inputs under the National Tariff Policy 2025-30 reflects an industry-friendly policy. This can be expected to reduce production costs and increase the competitiveness of the local industry. He said that the reduction in the tax burden on the export sector, the extension of the 0.25% concessional tax period for IT exports till 2029, the abolition of the super tax for businesses with income up to Rs 500 million, and the reduction in the super tax rate from 10% to 8% for large companies are positive steps. He added that increasing the withholding tax exemption limit for small traders from Rs 100 million to Rs 200 million was a long-standing demand of the business community. Faceless customs assessment, faceless audit, promotion of digital payments, electronic integration and reforms on modern lines of the tax system can bring transparency and ease in the business environment.
He said that the government has not included a clear or specific package in the federal budget for SMEs, especially the cottage industry, which is of utmost concern. A large part of Pakistan’s rural and small-scale economy consists of the cottage industry, which plays a fundamental role in employment, exports, and poverty reduction. We clearly propose that a special “Cottage Industry Development Fund” of at least Rs. 200 billion be established from the funds allocated under BISP, so that direct financial assistance can be provided to small craftsmen, cottage industries and micro enterprises.
Senior Vice President Ahmed Idrees Chohan said that the budget’s lack of a comprehensive national package for SMEs and small industries is a significant shortcoming. A large part of employment, local production, and business activities in Pakistan is associated with SMEs. Still, no effective program has emerged for them for low-interest financing, industrial modernization, technology upgradation, and export support. He said that the export sector had been continuously calling for the restoration of the Final Tax Regime (FTR), but this demand was not included in the budget. Although the reduction of withholding tax on exports from 2% to 1.25% is a positive development, the desired convenience and assured tax system could not be provided to the industry.
Ahmed Idrees Chohan said that small industries in Sindh, especially in Hyderabad, Kotri, Nawabshah, Mirpurkhas, and other industrial areas, are still facing high electricity costs, limited gas availability, high production costs, and financial difficulties. The lack of a significant reduction in industrial energy tariffs or a special industrial relief package in the budget is a cause for concern. He added that business facilitation should be ensured with new digital compliance systems, production monitoring, electronic integration and surveillance systems. Along with this, the government should introduce timely refunds for export-oriented SMEs, low-interest financing, special industrial tariffs, and further simplification of the tax system.
Vice President Shan Sehgal said that the measures included in the budget for the promotion of the digital economy, cashless transactions, IT exports, and the documentation system are in line with the needs of the future. The extension of tax credit on digital integration with the FBR and concessional tax for the IT sector could prove beneficial for young entrepreneurs and start-ups. He said that the proposed fixed tax system is a serious concern for small traders, as it lacks a clear classification based on the volume of business, turnover, and profit. A uniform tax system can impose an unfair burden on small and low-income traders, who are already under pressure from rising costs and low profits. Without proper classification, this system can further complicate matters for small businesses rather than broaden the tax net.
The Hyderabad Chamber office bearers expressed the hope that the government will take more effective measures for SMEs, small traders and small industries during the financial year, taking into account the suggestions of the business community, FPCCI, chambers and trade organizations, so that real growth in investment, industrial development, exports and employment opportunities can be possible.
