Islamabad, May 7, 2026: The Senate Standing Committee on Finance and Revenue on Thursday held the second consecutive session of its pre-budget consultations for the Annual Budget 2026-27 at Parliament House under the chairmanship of Saleem Mandiwalla.
The consultative session was part of the committee’s ongoing engagement with stakeholders aimed at incorporating recommendations and addressing concerns related to taxation, trade, industry, exports and consumer protection before finalisation of the Finance Bill 2026-27.
Speaking during the meeting, Senator Mandiwalla said the objective of the exercise was to bridge the gap between policymakers, regulators and the business community while ensuring smooth business operations, removal of anomalies, trade facilitation and reduction in unnecessary taxation burdens.
The meeting was attended by Senators Talha Mahmood, Dilawar Khan and Abdul Qadir, while MNA Ali Musa Gilani and senior officials from the Ministry of Finance also participated.
Representatives of trade bodies, industrial associations and sectoral organisations presented detailed budget proposals concerning tax reforms, tariffs, duties, industrial growth and export enhancement.
The Pakistan Poultry Association recommended rationalisation of the sales tax regime and proposed incentives to encourage women’s participation in the corporate workforce.
The Pakistan Pharmaceutical Manufacturers Association urged the government to increase the foreign exchange retention rate to 35 per cent, introduce performance-based incentives and review hidden taxation measures. Association representatives stated that such reforms could significantly boost industrial activity and revenue generation.
The Pakistan Association of Large Steel Producers proposed reforms in the tax collection mechanism. Senator Mandiwalla observed that if all steel mills jointly supported a proposal, it should be seriously considered and could even be tested on a trial basis.
The Islamabad Chamber of Commerce and Industry recommended reducing withholding tax, revising penalty rates and improving transaction traceability systems.
Representatives of the Exchange Companies Association of Pakistan informed the committee that the official dollar exchange rate stood at Rs279 while the black market rate was approximately Rs286. The association recommended increasing the permissible exchange rate margin to better compete with the illegal market.
Senator Mandiwalla remarked that the proposal sought “the best of both worlds” and noted that the matter did not directly fall under the budget domain, though it could be reviewed separately.
The Pakistan Automotive Manufacturers Association sought removal of surcharge-related levies, prompting the chairman to state that the committee had received several complaints on the matter and would write to the prime minister for its resolution.
The Consumer Association of Pakistan raised concerns over sharp increases in formula milk prices, claiming that prices were rising weekly by amounts ranging from Rs400 to Rs1,500.
Senator Mandiwalla sought a detailed list of products lacking printed prices, noting that the absence of price labels had become a major issue for consumers.
Representatives of the fruit juice industry informed the committee that the sector had experienced a 45 per cent decline in sales and recommended reducing the Federal Excise Duty (FED) on fruit juices from 20 per cent to 10 per cent.
The committee was informed that the Ministry of Finance considered natural and added sugars to have similar health effects under internationally accepted practices. However, the committee directed the industry to submit scientific evidence differentiating natural and added sugars for further consideration.
Officials stated that the purpose of imposing FED on sugary products was not only revenue generation but also promotion of healthier consumption habits.
Representatives of the dairy sector argued that the existing 18 per cent tax rate was among the highest globally and claimed that it had reduced the formal dairy sector to only two per cent of the market. They proposed reducing the tax rate to 10 per cent, arguing it would ultimately increase revenue collection. Senator Mandiwalla termed the demand reasonable.
The telecom sector recommended reducing withholding tax from six per cent to four per cent and sought exemption from advance tax, which also received support from the committee chairman.
The committee further directed stakeholders to consult the Engineering Development Board and the Pakistan Telecommunication Authority regarding equipment specifications, duties and tariff structures related to fibre optic infrastructure.
The Construction Association of Pakistan recommended bringing the construction sector under the minimum tax regime and allowing up to 40 per cent cash transactions while acting as withholding agents.
The All Pakistan Textile Mills Association recommended abolition of super tax and rationalisation of withholding tax on exporters, while the Towel Manufacturers Association of Pakistan sought restoration of zero-rating status and revisions in duties and taxes for small and medium enterprises.
Finance Ministry officials acknowledged that export-oriented industries had raised serious concerns regarding the current taxation regime’s impact on exports.
The Rice Exporters Association of Pakistan stressed the need for incentives aimed at value addition to help Pakistan compete with India in international markets.
Representatives from the Pakistan Gems and Jewellery Traders and Exporters Association, Pakistan Ready-Made Garments Manufacturers and Exporters Association and All Pakistan Motor Dealers Association also presented recommendations related to taxation, audits and industry facilitation.
The Society for the Protection of the Rights of the Child recommended increasing taxes on economy-brand cigarettes by Rs35 as part of tobacco control measures.
Trader representatives informed the committee that businesses were facing a 45 per cent decline in sales due to prevailing economic conditions and reduced market activity.
Following detailed discussions, the committee compiled recommendations submitted by participating associations and stakeholders for onward consideration by the Ministry of Finance and relevant authorities during the preparation of the Federal Budget 2026-27.
