PCMA urges policy overhaul to support $16bn chemical sector

LAHORE: The Pakistan Chemical Manufacturers Association (PCMA) has expressed serious concerns over the Federal Budget 2025-26, calling for structural reforms and a forward-looking policy to support the $16 billion chemical sector -- a vital contributor to manufacturing industries including textiles, leather, plastics, pharmaceuticals, agriculture and packaging.

In an official statement, PCMA Chairperson Haroon Ali Khan welcomed positive budgetary steps such as the intent to revive large-scale manufacturing, addressing the misuse of tax incentives in Fata/Pata, and the elimination of additional customs duties (ACDs).

However, he criticised the absence of a coherent policy framework for the chemical industry.He noted that high energy costs, delayed GST refunds, excessive tax burdens on compliant businesses, unpredictable policy changes, and the misuse of export facilitation schemes continue to hinder the growth of domestic industries supplying raw materials to key export sectors such as textile and leather chemicals.

Haroon warned that the planned elimination of the 5th Schedule by 2030 could severely damage the local chemical industry.The association also voiced concern over the expanded discretionary powers granted to the Federal Board of Revenue (FBR). Khan stressed the need for digital reforms and taxpayer facilitation before implementing coercive measures that may erode business confidence.

The PCMA further demanded the government declare the chemical sector ‘strategic’, granting it priority access to land and utilities, streamlining environmental and licensing approvals through a one-window operation, and supporting the sector through national R&D programmes.