Business groups urge tariff reforms, lower energy costs ahead of budget, propose District Economy Model

Business groups and industrial representatives have urged the government to adopt gradual and growth-oriented economic reforms in the upcoming federal budget, warning against abrupt tariff cuts and calling for measures to reduce energy costs, rationalise taxes and improve the investment climate.

Ahead of the budget announcement, a delegation of Pakistan Business Council (PBC) and industrial stakeholders met Commerce Minister Jam Kamal Khan to discuss tariff rationalisation, industrial competitiveness, export sustainability and challenges facing the manufacturing sector.

The delegation included leading industrial representatives, including Gatron Industries Limited and Novatex Limited Chief Executive Officer Taimur Dawood.

According to officials, participants discussed the impact of tariff reforms, anti-dumping duties and rising production costs on industries including petrochemicals, plastics, polyester and small and medium enterprises.

Industrial representatives informed the minister that while trade liberalisation and tariff rationalisation remained important objectives, abrupt across-the-board reductions in duties could adversely affect domestic manufacturing, industrial investment and government revenues.

The delegation also stressed the need to differentiate between export-oriented manufacturers and trading businesses dependent on imports with limited local value addition.

Last year, the government announced a five-year tariff reform plan aimed at gradually reducing customs duties, additional customs duties and regulatory duties, while allowing exemptions on raw materials over the period.

Commerce Minister Jam Kamal Khan said policy decisions should support long-term industrial growth and sustainable manufacturing while remaining responsive to changing economic conditions.

PIBF proposes seven-point revival plan

Separately, Pak International Business Forum (PIBF) proposed a seven-point economic revival agenda for the federal budget and urged the government to introduce business-friendly reforms to support industrial growth, exports and investment.

PIBF President Dr Mushtaq Mangat said Pakistan required stable and long-term economic policies instead of temporary fiscal measures, adding that businesses were facing pressure from high interest rates, rising fuel costs, expensive energy and complex taxation procedures.

The forum called for rationalisation of interest rates and revival of Development Finance Institutions to improve financing access for export-oriented sectors and small and medium enterprises.

PIBF also proposed broadening the tax base while reducing tax rates and simplifying compliance procedures through a digitised single-window tax system.

The forum urged the government to provide regionally competitive electricity and gas tariffs for industries, particularly exporters, and called for reforms aimed at reducing transmission losses and improving governance of distribution companies.

Officials of the forum also expressed concern over rising petroleum prices, stating that higher fuel costs were increasing inflationary pressure across transport, agriculture and manufacturing sectors.

PIBF proposed creation of a fuel price stabilisation mechanism and rationalisation of petroleum levies to provide relief to businesses and consumers.

On ease of doing business, the forum recommended establishment of a fully digital one-window operational framework to simplify approvals, registrations and regulatory compliance procedures.

The business group also called for policy continuity, reduction in unnecessary regulations and introduction of fast-track commercial dispute resolution mechanisms to improve investor confidence.

PIBF further proposed expansion of vocational training, apprenticeship programmes and digital skills development aligned with industry requirements, particularly in information technology, freelancing and remote work sectors.

The forum also recommended introducing a “District Economy Model” aimed at promoting decentralised economic growth based on local resources and the economic strengths of individual districts.