Finance Minister Muhammad Aurangzeb and FPCCI President Atif Ikram Sheikh have finalized a comprehensive package of tax and energy incentives under Pakistan’s new industrial policy. Developed in consultation with Special Assistant to the Prime Minister Haroon Akhtar Khan and the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on August 28, 2025, these incentives aim to boost industrial growth.
Aurangzeb expressed confidence, stating, “These measures will fuel industrial growth and job creation.”
Tax Incentives for Growth
The policy framework introduces strategic financial incentives to stimulate industrial activity and economic growth. Major incentives include:
- A 15% tax break for small and medium enterprises (SMEs)
- Reduced power tariffs for export-oriented manufacturing units
- Creation of 300,000 new jobs by 2028
- Formation of eight specialized sub-committees for policy implementation
The FPCCI will provide ongoing feedback to ensure reforms align with business needs and meet market conditions effectively.
Energy Solutions for Competitiveness
High energy costs have hindered industrial competitiveness in Pakistan. The new policy addresses this by lowering operational expenses through innovative solutions.
A pilot program for solar-powered industrial zones is planned for Punjab by 2026. This initiative aims to reduce costs and improve export competitiveness in regional markets. Reduced power tariffs for export-oriented units are expected to strengthen Pakistan’s global trade position.
Impact and Execution
FPCCI President Sheikh emphasized the importance of rapid execution to improve Pakistan’s competitive edge globally and regionally. “This is a win for the economy,” Sheikh remarked, predicting that the policy will drive revenue growth and attract investment, bolstering the manufacturing sector.
The policy combines tax relief, energy reforms, and job creation targets to position Pakistan as a competitive manufacturing hub. Implementation will commence immediately, overseen by the FPCCI and government committees.
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