KARACHI: The President of the Korangi Association of Trade and Industry (KATI), Junaid Naqi, criticized the Federal Budget 2025-26, stating it fails to meet both industrial and public needs.

Naqi remarked that the budget heavily relies on indirect taxation, particularly sales tax, which he said elevates business costs and fuels inflation. He highlighted the ambitious revenue targets of Rs14.131 trillion and non-tax revenue of Rs5.167 trillion as being detached from reality.

The government’s GDP growth projection of 4.2% and inflation rate of 7.5% were described by Naqi as unrealistic, with insufficient measures to achieve these targets. He expressed concern over the agricultural sector's continued tax exemption, noting its contribution of 26% to GDP, yet representing less than 1% of tax revenue.

Naqi noted the Rs17.6 trillion budget outlay overlooked balanced policies that could alleviate taxpayers' burdens. He criticized the government for imposing fiscal adjustments on the industrial sector without providing measures to offset production costs.

He pointed out that while Rs2.55 trillion is allocated for defense and Rs1 trillion for the Public Sector Development Programme, the budget lacks initiatives to boost industry, exports, or job creation.

Naqi expressed concern over the proposed 18% sales tax on solar panels and high petroleum levies, warning these would increase business costs. Although acknowledging reductions in super tax rates and income tax slabs, he stated the budget does little to restore investor confidence.

He urged for reforms to reduce reliance on indirect taxes and to broaden the tax base with direct measures. "Without fundamental tax reforms, sustainable economic recovery will remain out of reach," Naqi emphasized.

Concluding, Naqi stated the budget fails to address the aspirations of the industrial sector and citizens, calling for a realistic and growth-oriented fiscal strategy.