Industry lauds tax relief but flags energy, SME neglect

HYDERABAD: Trade and industry bodies in Hyderabad have welcomed some tax measures in the federal budget for 2026-27, while saying the package does not adequately address energy costs, financing pressures, infrastructure deficiencies and the needs of smaller businesses.

In a joint statement issued on Saturday, Hyderabad SITE Association of Trade and Industry (HSATI) Chairman Zubair Ghangra, Senior Vice President Aamir Shahab and Vice President Esar Kumar said the budget contained some positive steps, but argued that additional measures were needed to meet the country’s economic requirements, support industrial growth, create jobs and expand exports.

Ghangra said the reduction in customs duty, additional customs duty and regulatory duty on industrial raw materials and machinery under the National Tariff Policy 2025-30 would lower input costs for industry. He also described relief for agricultural machinery, a cut in withholding tax on exports, continuation of incentives for IT exports and a partial reduction in super tax as measures that could help improve the investment climate.

At the same time, he said these steps were not enough to bring about a meaningful industrial recovery. He maintained that the budget had extended relief to high-income groups, but added that the broader economic effect of that move would remain limited.

Referring to the pressures faced by businesses, Ghangra said industry remained most exposed to elevated energy prices, costly borrowing and fluctuating production expenses. He said the budget did not present a comprehensive plan to tackle those core issues.

He said lower electricity tariffs and an uninterrupted gas supply were urgently needed, but added that the government had fallen short of expectations on both counts. He also said industrial zones in Sindh, including those in Hyderabad division, continued to face basic infrastructure problems, and that successive budgets had not removed obstacles affecting industrial productivity.

HSATI Senior Vice President Aamir Shahab said the economy was already burdened by debt repayments and that the new budget, carrying a large fiscal deficit, pointed to continued dependence on borrowing. Vice President Asar Kumar said industrial expansion was essential because employment generation and export growth could not be achieved without it.

Separately, the Hyderabad Chamber of Small Traders and Small Industries welcomed the budget’s economic and tax reforms, but said small and medium enterprises as well as small industries had been overlooked.