The Senate Standing Committee on Finance and Revenue, under the chairmanship of Senator Saleem Mandviwalla, held a crucial meeting to engage with industry stakeholders ahead of the upcoming federal budget.

Representatives from key sectors-textiles, poultry, dairy, steel, real estate, consumer goods, and more-voiced pressing concerns and proposed fiscal reforms to support struggling industries, according to a statement issued by the Senate Secretariat here on Tuesday.

One of the major highlights came from the towel manufacturing sector, which reported export figures nearing $2 billion, contributing 18% to Pakistan’s total towel exports.

Sector representatives raised alarm over prolonged delays-up to six months-in sales tax refunds and called for the revival of SRO 112. They also criticized the misuse of the Export Facilitation Scheme (EFS) and demanded electricity subsidies for SMEs, alongside the removal of the 2% normal tax.

The textile sector painted a grim picture, with All Pakistan Textile Mills Association (APTMA) Chairman Kamran Arshad revealing that textile exports have stagnated at 16.5% and 16.7% over the last two years. He blamed the EFS for exacerbating the crisis and highlighted that 120 spinning mills and 800 ginning factories had already shut down.

The APTMA demanded that yarn and fabric be placed on the negative list, the sales tax on local cotton be abolished, electricity be fixed at 9 cents per unit, and advance tax be reduced to 1%.

From the poultry industry, representatives criticized the imposition of sales tax on branded chicken products while other meats remain tax-free. They also highlighted the burden of over ten different taxes on poultry feed, rendering the sector financially unviable.

The Dairy Association urged the government to cut sales tax on milk from 18% to 5%, citing international norms where milk is largely tax-exempt. In response, the Federal Board of Revenue (FBR) Chairman requested detailed proposals to address the potential revenue shortfall.

The Fruit Juices Council echoed similar concerns, seeking a reduction in the Federal Excise Duty (FED) from 20% to 15% after experiencing a 40% drop in sales over two years due to high taxation.

In the real estate sector, the Pakistan Builders and Developers Association (ABAD) pushed for the removal of advance income tax on property transactions and the restoration of a simplified tax regime based on covered area. They also called for the repeal of Section 7E, asserting that land is a basic necessity.

Meanwhile, the Constructors Association of Pakistan requested the reduction of the withholding tax rate from 8% to 1.5-2% and demanded an end to the designation of contractors as withholding agents, arguing that the sector’s mobility makes compliance challenging.

The Steel Melters Association raised alarm over an estimated Rs70-80 billion in annual tax evasion due to smuggling and unregistered steel scrap, particularly in Karachi. They criticized the FBR’s price-fixing practices, calling them detrimental to fair market competition.

The Gem and Jewelry Association urged for exemptions on technology imports and suggested asset declarations be made in gold rather than cash for gem and jewelry businesses.

Senator Mandviwalla thanked the associations for their comprehensive input and assured that their recommendations would be seriously considered during budget deliberations. He reiterated the committee’s dedication to promoting a business-friendly environment that ensures both economic stability and transparency.

The meeting was also attended by Senators Anusha Rahman Ahmad Khan, Syed Faisal Ali Subzwari, Mohammad Abdul Qadir, and representatives from numerous industry bodies, including the Denim Manufacturers and the All Pakistan Steel Mills Association.