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FAISALABAD, Jul 07 (APP):Pakistan stands at a crossroads and with right policy support exporters can generate growth, employment and economic stability, said Chairman Pakistan Textile Exporters Association Sohail Pasha.
During a meeting, he expressed some apprehensions on budget proposals and appealed the government to immediately address budget anomalies as continued inaction could disrupt exports and weaken exporters’ confidence.
He said that Pakistan’s value-added textile sector contributes over $9 billion to national exports annually, supports millions of livelihoods, and remains a key pillar of the country’s economic stability. Yet, this sector is currently facing severe setbacks due to taxation measures introduced in the Finance Act 2024, which replaced the simplified Final Tax Regime (FTR) with the more burdensome Normal Tax Regime (NTR).
He said that export proceeds are subjected to deduction of 1% Advance tax under section 154 as minimum tax. Simultaneously an advance tax @1% has been levied through insertion of sub-section (6C) in section 147; however contrary to these local supplies are liable to payment of 1% advance tax. The treatment meted out to the exporters is discriminatory and against the principles of equity and natural justice, he lamented.
He said that the Export Facilitation Scheme (EFS) was introduced to simplify export procedures, reduce liquidity pressure, and promote digital traceability.
He demanded restoration of the original EFS framework which allowed zero-rated invoicing on local purchases and exempted key raw materials such as cotton yarn from sales tax at the import stage.
He said that Pakistan’s regional competitors like Bangladesh and Vietnam continue to provide tax-free access to raw materials for their export industries, giving them a clear advantage in global markets.
He said that around Rs.36 billion are pending for payment under textile policy incentives and if these amounts are released, the exporters can deploy the capital towards expanding their businesses, which in turn will help Pakistan’s export earnings grow.
The government should reconsider the budgetary measures and restore the confidence of exporters by addressing the anomalies to achieve the desired targets, he demanded.