Karachi (June 11, 2025): United Business Group (UBG) President Zubair Tufail, Core Committee Members Malik Khuda Bakhsh, Syed Mazhar Ali Nisar, Khalid Tawab, and Hanif Gohar have termed the federal budget 2025–26 as disappointing, stating that the new fiscal year’s budget is not beneficial for the industrial sector, nor does it reflect public expectations. While the budget attempts to strike a balance between national security, internal stability, and fiscal responsibility, it raises concerns among the business community and investors. The targets of 4.2% GDP growth and 7.5% inflation rate are deemed unrealistic.
The UBG leaders pointed out that the agriculture sector, which contributes 26% to national income, remains outside the tax net, with a contribution of less than 1% to the national tax revenue—thereby increasing pressure on other sectors.
They further stated that the federal budget has increased the prices of several items, including beverages, mineral water, pet food, vehicles, petroleum products, coffee, and chocolates. Increases in levies and carbon taxes on petroleum products will impact daily life, especially for the middle and salaried classes, who will face additional financial burdens. No concrete government measures are visible for supporting industry, boosting exports, or creating employment opportunities.
They acknowledged that the slight reduction in the super tax rate is a positive step but emphasized that comprehensive reforms in the tax structure were essential. Without broadening the tax base, achieving revenue targets is not possible, and doing so is vital for sustainable economic stability.
The UBG representatives criticized the government for missing an important opportunity in the new fiscal year’s budget to expand the tax net. Particularly, there is no clear strategy presented to formally document the economy, which includes around PKR 9 trillion in undocumented cash-based transactions—an issue that trade and industrial bodies have been persistently raising.
They added that increasing revenue through tax reforms and the implementation of digital monitoring systems is possible, but it will only be effective if it is accompanied by facilitation for taxpayers.
