HCSTSI appreciates business, industry friendly features of budget 2026-27

HYDERABAD, (APP - UrduPoint / Pakistan Point News - 13th Jun, 2026) The Hyderabad Chamber of Small Traders and Small Industries (HCSTSI) has welcomed what it described as some positive economic and tax reforms in the Federal budget 2026-27.

However, in a statement issued here on Saturday, the chamber's President Muhammad Saleem Memon, Senior Vice President Ahmed Idrees Chohan and Vice President Shan Sehgal emphasized that more measures are needed to address problems of small traders, SMEs and small industries.

Memon said 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 is expected to reduce production costs and increase the competitiveness of the local industry," he noted.

He said reduction in tax burden on the export sector; extension of 0.25 percent concessional tax period for IT exports till 2029; abolition of super tax for businesses with income of up to Rs 500 million and reduction in super tax rate from 10% to 8% for large companies were also welcome steps.

He added that increasing the withholding tax exemption limit for small traders from Rs100 million to Rs200 million was a long-standing demand of the business community which had been accepted by the government.

"Faceless customs assessment, faceless audit, promotion of digital payments, electronic integration and reforms on modern lines of tax system can bring transparency and ease in the business environment," he observed.

He, however, pointed out that no clear or specific package had been included by the government in the federal budget for SMEs and especially the cottage industry, which was of utmost concern.

"A large part of Pakistan’s rural and small economy consists of cottage industry which plays a fundamental role in employment, exports and poverty reduction," the chamber's president underlined.

Memon recommended that a special 'Cottage Industry Development Fund' of at least Rs200 billion should be established from the funds allocated under BISP so that direct financial assistance could be provided to small craftsmen, cottage industries and micro enterprises.

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Chohan said a lack of a comprehensive national package for SMEs and small industries in the budget was a significant shortcoming.

He added that a large part of employment, local production and business activities in Pakistan were associated with SMEs but no effective program had emerged for them in terms of financing at low interest rates, industrial modernization, technology upgrade and export support.

He recalled that the demand for restoration of the Final Tax Regime (FTR) was being continuously made by the export sector, but that 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, he said.

He identified expensive electricity, limited availability of gas, high production costs and financial difficulties as serious bottlenecks hampering growth of the small industries in Sindh's cities including Hyderabad, Kotri, Nawabshah and Mirpurkhas.

He proposed that business facilitation should be ensured with new digital compliance systems, production monitoring, electronic integration and surveillance systems.

Chohan also called for timely payment of refunds to export-oriented SMEs, financing at low interest rates, special industrial tariffs and more simplification in the tax system.

Vice President Sehgal said the measures included in the budget for the promotion of digital economy, cashless transactions, IT exports and documentation system were 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 believed.

He, however, observed that a uniform tax system that lacks classification could put an unfair burden on small and low-income traders.

The Hyderabad Chamber office bearers expressed hope that the government would take more effective measures for SMEs, small traders and small industries during the upcoming financial year.