Page 9 - CMA Journal (May-June 2025)

Exclusive Interview

ICMA: What incentives does the budget offer to
The government has rolled attract foreign direct investment, particularly in
manufacturing, technology, and renewable energy?
out a landmark PKR 1.275 Khurram Schehzad: Budget FY26 aligns with the
National Tariff Policy (2025–30) to deliver a
trillion circular debt resolution comprehensive investment incentive package. Tariff
rationalization has cut Customs Duties, Additional
plan with no additional burden Customs Duties, and Regulatory Duties - especially on
raw materials and intermediate goods—lowering costs
on consumers for manufacturers. Over 900 tariff lines now fall under the
0% slab, and the maximum RD has been halved from
90% to 50%. Renewable energy equipment enjoys full
ICMA: Broadening the tax base is important, but how exemptions to attract clean-tech FDI. These reforms are
can it be done without adding more burden on existing backed by one-window facilitation, regulatory clarity,
taxpayers, especially those in the formal sector? and circular debt resolution. Foreign investment flows
exceeded $1.2 billion, and interest in EVs, agriculture,
Khurram Schehzad: FY26 marks a paradigm shift -
food, technology, defense, mining & minerals, and solar
toward fairness through technology. The FBR is expanding
manufacturing, is rising - demonstrating growing
the net via data analytics, digital audits, real-time tracking,
investor confidence in country’s economic outlook.
and automated compliance. Instead of raising taxes, the
focus is on expanding coverage - targeting high-
net-worth individuals, retailers, and undocumented
incomes. Reforms like faceless assessment, simplified Privatization momentum has
returns, and sector-specific audits are making compliance
easier and less adversarial. This approach preserves accelerated since April 2025.
incentives for compliant taxpayers while driving equity
and broadening the base sustainably.
EOIs for PIA have been
ICMA: Given persistent federal deficits and provincial
surpluses, do you believe the NFC Award needs to be renewed with strong
revised? If so, what changes do you propose?
investor response
Khurram Schehzad: There are both schools of thought,
in favor and against. However, more voices are emerging
toward recalibration of the NFC Award. It is learnt that
the current formula is overly reliant on population. A ICMA: Privatization is back on the agenda. Which
revised framework may be more tilted toward rewarding sectors are prioritized, and how will the process
provincial performance - especially in revenue ensure transparency and investor confidence?
generation, social services, and development outcomes.
Khurram Schehzad: Privatization momentum has
Pakistan needs to also move toward harmonized
accelerated since April 2025. EOIs for PIA have been
taxation, integrated databases, and coordinated subsidy
renewed with strong investor response. The Roosevelt
reforms. A dynamic, performance-linked NFC will
Hotel JV has been approved, and marked progress has
enhance federal cohesion, fiscal sustainability, and
been made on HBFC and ZTBL. Three DISCOs are being
service delivery across provinces.
fast-tracked, with transaction advisors onboard. The
Cabinet Committee on Privatization ensures
transparency, supported by IFC-aligned protocols and
digital bidding platforms. So far, 24 SOEs have been
Pakistan needs to also move added to the privatization list. The objective is clear:
reduce fiscal burden, improve efficiency, and unlock
toward harmonized taxation, private capital for public assets in a transparent,
competitive manner.
integrated databases, and
The Editorial Board thanks Mr. Khurram Schehzad, Advisor to
coordinated subsidy reforms Finance Minister, Government of Pakistan for sparing his
precious time to give an exclusive interview for Chartered
Management Accountant Journal.

ICMA’s Chartered Management Accountant, May-June 2025 7