LAHORE – Pakistan’s leading textile exporters have urged the government to adopt key industry proposals through the Federal Board of Revenue’s (FBR) budget anomaly committee to safeguard export growth and jobs.
In a joint post-budget meeting, the Pakistan Hosiery Manufacturers and Exporters Association (PHMA) and the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) raised strong concerns over recent tax changes. Industry leaders said the textile sector, which generates over $11 billion in exports and supports millions of jobs, is under severe financial stress.
PHMA Chairman Abdul Hameed criticized the shift from the Final Tax Regime (FTR) to the Normal Tax Regime. He said this move now forces exporters to pay a 1% minimum and 1% advance tax on export income, regardless of profits, which is unfair and damaging to businesses.
Former PHMA chairman Naseer Butt warned that the new tax policy could force many small and medium textile units to shut down. He called on the government to reverse the changes and support SMEs struggling with inflation and low profit margins.
PRGMEA Chairman Dr Ayyazuddin expressed concern over the altered Export Facilitation Scheme. He said removing zero-rating on local purchases and applying sales tax on imported cotton yarn adds to the industry’s cash flow problems, defeating the scheme’s original purpose of easing liquidity.
Exporters also demanded quick tax refunds and stable energy prices. Former PRGMEA chairman Ijaz Khokhar pointed out that regional competitors like Bangladesh and Vietnam enjoy tax-free access to raw materials. He urged the government to restore the Export Facilitation Scheme under SRO 957(I)/2021 to keep Pakistani exports competitive.