Karachi: Sheikh Umer Rehan, Chairman of the Pakistan Vanaspati Manufacturers Association (PVMA), has voiced concerns over the Federal Budget 2025-26, labeling it as disappointing for the food sector, specifically the ghee and cooking oil industry. He criticized the budgetary measures for increasing production costs, which he argues will inevitably lead to higher food inflation.

While he appreciated the government's decision to abolish the 'non-filer' category and expand the tax base, Sheikh Umer Rehan noted that the budget failed to address critical issues facing the edible oil industry. He pointed out that long-standing sales tax refunds remain unresolved, causing severe liquidity challenges.

Rehan urged the government to abolish Section 8B of the Sales Tax Act, which imposes additional financial burdens on manufacturers. He also welcomed the removal of Additional Customs Duty (ACD) on imports but emphasized that these benefits should extend to the ghee and cooking oil sector to alleviate consumer prices.

He highlighted the pressures faced by the industry due to high import taxes, duties on raw materials, and the Pakistani Rupee's devaluation. Additional levies, such as the petroleum levy and carbon tax, are expected to further escalate production costs, complicating the industry's sustainability.

Criticizing the absence of a comprehensive policy, Rehan argued that the government overlooked practical measures to boost domestic edible oil production and reduce import reliance. He pointed out a structural flaw in economic planning, where taxation disproportionately affects formal sectors like manufacturing, while agriculture remains largely untaxed.

Rehan also noted the reduction, but not elimination, of tax exemptions for the former FATA/PATA regions, which continues to disadvantage local manufacturers.

In light of these issues, the PVMA Chairman urged for reduced indirect taxes and levies on essential food items, relief on raw material imports, and the inclusion of agriculture in the tax net to ensure a more equitable tax regime. Without these measures, he warned, controlling food inflation will be an unattainable goal.