SAI calls for further measures to support manufacturing sector

KARACHI, (APP - UrduPoint / Pakistan Point News - 12th Jun, 2026) President of the S.I.T.E. Association of Industry (SAI), Abdul Rehman Fudda, has termed the reduction in export withholding tax from 2 percent to 1.25 percent in the Federal Budget 2026-27 as a modest relief for exporters, while expressing concern that several key demands of the manufacturing sector remain unaddressed.

In a statement commenting on the federal budget, Fudda said the association had reviewed the budget with cautious appreciation for certain measures but believed it fell short of addressing the pressing needs of the manufacturing industry.

He noted that export-oriented sectors, including textiles, light engineering, chemicals and processed goods, had expected more comprehensive support. According to him, the long-standing demand for restoration of the Final Tax Regime was not accommodated in the budget.

Fudda said exporters were also concerned over the absence of a mechanism for clearing outstanding sales tax and income tax refunds, amounting to billions of rupees, which remain pending with the Federal board of Revenue (FBR).

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He added that delayed refunds continue to affect manufacturers' liquidity and competitiveness in international markets.

The SAI president further highlighted what he described as three major unresolved issues facing industry: industrial electricity tariffs that remain higher than those of regional competitors, the expansion of the Third schedule of Sales Tax that increases working capital requirements for manufacturers, and a stricter penalty regime that, he said, places additional burdens on compliant businesses.

He maintained that the formal industrial sector continues to face challenges, including higher taxes, expensive energy and delayed refunds while competing in global markets.

Fudda urged the government to address these concerns through amendments to the Finance Bill before its approval by the National Assembly and the start of the new fiscal year.