LCCI urges fair tax targets, higher PSDP

The Lahore Chamber of Commerce and Industry (LCCI) has presented its shadow budget for fiscal year 2026?27 and urged the government to design a balanced, business?friendly federal budget, according to a statement issued on Monday.

LCCI President Faheemur Rehman Saigol said the business community is under severe pressure from 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. Saigol said the federal budget size for 2025?26 was Rs17,573 billion, with a deficit of Rs6,501 billion. He suggested the next budget remain around the same size to maintain financial discipline.

The FBR tax target for 2025?26 was Rs14,131 billion. LCCI recommended only a 4?5% increase in the next budget, setting the target at about Rs14,700?14,800 billion. Unrealistic targets would further hurt industry and trade, he warned.

Indirect taxes such as customs duty, sales tax and federal excise duty increase the cost of doing business and fuel inflation. LCCI proposed customs duty at Rs1,650?1,660 billion, sales tax at Rs4,950?4,980 billion, and federal excise duty at Rs920?930 billion.

On income tax, Saigol said the government should bring new sectors into the tax net instead of increasing pressure on existing taxpayers, especially salaried individuals and industries. Without expanding the tax base, sustainable revenue growth is not possible.

Given the regional situation, a reasonable increase in defence spending is necessary. LCCI proposed raising the defence budget by 10?12% to about Rs2,800?2,860 billion. The Public Sector Development Programme (PSDP), currently at Rs1,000 billion, is not sufficient. LCCI recommended increasing it to Rs1,200?1,300 billion to speed up development projects, create jobs and support private sector growth.

Saigol also stressed that interest rates should be further reduced and expensive domestic debt refinanced to lower financial pressure. Along with the Benazir Income Support Programme, he proposed allocating Rs100?150 billion for technical and vocational training to help young people gain employment.

On petroleum levy, he said high fuel taxes create difficulties for industries and the public. He called for reducing the petroleum levy target and finding alternative revenue sources. LCCI also demanded the immediate removal of the Punjab Infrastructure Development Cess, stating it increases the cost of doing business and negatively affects industry, imports, exports and supply chains.

Saigol expressed hope that the government will seriously consider the business community's recommendations. Senior Vice President Tanveer Ahmed Sheikh, Vice President Khurram Lodhi and former FPCCI and LCCI President Mian Anjum Nisar also attended the press conference.