Lahore Chamber of Commerce and Industry (LCCI) Monday 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 to ensure economic stability, support industries, and promote business activity.
Addressing a press conference in this regard here, the 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.
LCCI Senior Vice President Tanveer Ahmed Sheikh, Vice President Khurram Lodhi, former LCCI president Mian Anjum Nisar, and several Executive Committee members were also present.
The LCCI President said, 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 cautioned 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 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.