LCCI presents Shadow Budget 2026–27Indirect taxes unnecessary burden: LCCI President

Says need to expand tax net instead of increasing pressure on existing taxpayers
By Dr Ansab Ali, Lahore Pakistan
LAHORE: Lahore Chamber of Commerce and Industry has presented its Shadow Budget for the fiscal year 2026–27 and urged the government to design a balanced, business-friendly and relief-oriented federal budget. The Chamber said this is necessary to ensure economic stability, support industries, and promote business activity.
LCCI President Faheem Ur Rehman Saigol said that the business community is currently under severe pressure due to high energy costs, high interest rates, heavy taxation, and inflation. He stressed the need for a budget that provides real relief to industry, trade, and the general public.
He was speaking at a press conference held at LCCI. Senior Vice President Tanveer Ahmed Sheikh, Vice President Khurram Lodhi, former FPCCI and LCCI President Mian Anjum Nisar, and several Executive Committee members including Mohsin Bashir, Imran Saleemi, Shouban Akhtar, Karamat Ali Awan, Rana Nisar, Aamir Ali, and Zain Elahi were also present.
The LCCI President said that the total size of the federal budget for 2025–26 was Rs. 17,573 billion, while the budget deficit stood at Rs. 6,501 billion. He suggested that the next budget should remain around the same size to maintain financial discipline and control unnecessary spending.
He further said that the FBR tax target for 2025–26 was Rs. 14,131 billion. LCCI recommended only a 4–5 percent increase in the next budget, setting the target at around Rs. 14,700 to 14,800 billion. He warned that unrealistic tax targets would further hurt industry, trade, and economic activity.
He added that indirect taxes such as customs duty, sales tax, and federal excise duty increase the cost of doing business and contribute to inflation. He suggested setting realistic targets: customs duty at Rs. 1,650–1,660 billion, sales tax at Rs. 4,950–4,980 billion, and federal excise duty at Rs. 920–930 billion, so that neither businesses nor the public face extra burden.
On income tax, he said that instead of increasing pressure on existing taxpayers—especially salaried individuals and industries—the government should bring new sectors into the tax net. Without expanding the tax base, sustainable revenue growth is not possible.
The LCCI President said that, given the regional situation, a reasonable increase in defence spending is necessary. He proposed raising the defence budget by 10–12 percent to around Rs. 2,800–2,860 billion to meet national security needs.
He said that the Public Sector Development Programme (PSDP), currently set at Rs. 1,000 billion, is not sufficient. LCCI recommended increasing it to Rs. 1,200–1,300 billion to speed up development projects, create jobs, and support private sector growth.
He also stressed that interest rates should be further reduced and expensive domestic debt should be refinanced to lower financial pressure and reduce debt servicing costs.
Regarding social welfare, he said that along with the Benazir Income Support Programme, there should be stronger investment in technical and vocational training. He proposed allocating Rs. 100–150 billion for skill development to help young people gain employment opportunities.
On petroleum levy, he said high fuel taxes create difficulties for both industries and the public. He called for reducing the petroleum levy target in the next budget and finding alternative revenue sources to reduce reliance on fuel taxation.
The LCCI also raised concerns over the Punjab Infrastructure Development Cess and demanded its immediate removal, stating that it is increasing the cost of doing business and negatively affecting industry, imports, exports, and supply chains.
The LCCI President expressed hope that the government will seriously consider the business community’s recommendations and present a budget that supports economic stability, industrial growth, investment promotion, and public welfare.