LAHORE: Syed Nabeel Hashmi, former chairperson of the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), said the federal budget introduced several important reforms, particularly in digital governance and selective tax relief, but fell short of presenting a comprehensive strategy for industrial growth.
He welcomed the reduction in withholding tax on export proceeds and markup income, describing it as a positive step. However, he said banks remained reluctant to facilitate access to these incentives, limiting their benefits for exporters.
“Without alignment from the banking sector, exporters cannot fully benefit from these measures,” he said.Hashmi also welcomed reductions in customs duty and additional customs duty (ACD) on thousands of tariff lines, saying the move would lower input costs and improve industrial competitiveness.
He described the introduction of faceless audits, algorithmic tax settlements, production monitoring and e-invoicing as major governance reforms that would reduce harassment and improve compliance. Support for skills development, IT exports and digital payments was also a positive signal for Pakistan’s young workforce, he added.
However, Hashmi identified several shortcomings in the budget. He noted the absence of dedicated funding for export promotion and international marketing, arguing that Pakistan could not significantly expand exports without greater global visibility.
He said industry continued to face high electricity and gas tariffs, elevated financing costs and heavy taxation on raw materials, all of which undermined competitiveness against regional rivals.
Hashmi also criticised the National Tariff Policy for pursuing broad-based tariff reductions without adequately considering localisation levels, employment generation, sector-specific vulnerabilities, technological depth and foreign exchange exposure.
“This approach risks de-industrialisation, particularly in sectors such as engineering, plastics, chemicals and auto parts,” he said.He noted that industry was still awaiting the Auto Policy 2026-31, which is expected to introduce reforms aimed at supporting local automobile and auto-parts manufacturers through greater localisation, technology transfer and export-oriented incentives.
“As former chairperson of PAAPAM and PPMA, and as a representative of the private sector, I assure that PAAPAM remains committed to working with the government to build a globally competitive, technologically advanced and job-creating industrial economy,” he said.
