The Pakistan Steel Melters Association (PSMA) has shared its recommendations for the Federal Budget 2025-26 (starting in July 2025), aiming to support the local steel industry and help the economy grow, notes Kallanish.

One of the main suggestions is to bring back the ‘Special Procedure’ for calculating sales tax based on how much electricity a unit uses. This method could increase tax collection and stop tax evasion, especially by small furnaces and rolling mills.

“Using electricity units to calculate sales tax is a smart way to stop tax evasion. It shows how much steel is really being made and helps make sure all producers, especially smaller ones, pay their fair share”, a Karachi-based industry analyst tells Kallanish.

The PSMA also wants scrap dealers to be registered with tax authorities and is asking for an exemption from withholding tax on local scrap purchases.

To reduce costs and improve local steel production, the PSMA suggests cutting electricity prices for steel melters. It also recommends increasing regulatory duties on steel billet imports and closely checking steel imports at seaports to stop smuggling and fake invoices.

“Cheaper electricity will help steel makers lower their costs and produce better-quality steel. Raising import duties and checking steel at ports can stop smuggling and unfair pricing, giving local steel companies a fair chance to grow”, remarks another expert based in Lahore.

The group further proposes gradually ending tax exemptions in Federally Administered Tribal Areas and Provincially Administered Tribal Areas to ensure fair competition for all businesses across Pakistan.

PSMA says these changes will make the steel sector stronger and more competitive. It has urged the government to include these points in the upcoming budget to create a better business environment for the steel industry.