Textile industry: PHMA, PRGMEA for implementation of budget proposals through FBR's body
The demand came during a post-budget joint meeting of both associations, which was attended by PHMA Chairman Abdul Hameed, PHMA former chairmen Naseer Butt and Shehzad Azam Khan, PRGMEA Chairman Dr Ayyazuddin, and PRGMEA former chairmen Ijaz Khokhar and Sohail Afzal Sheikh.
It was clarified that these are proposals from the textile export sector currently being submitted to the committee for review. The participants stressed that the government must not only examine these industry recommendations through the Anomaly Committee process but also implement the committee's final report once compiled.
While addressing the meeting, PHMA Chairman Abdul Hameed pointed out that Pakistan's value-added textile, apparel, bedwear, home textile, and towel sectors contribute over $11 billion in annual exports and provide livelihoods to millions.
He expressed concern over the replacement of the simplified Final Tax Regime (FTR) with the more complex Normal Tax Regime (NTR), which now subjects exporters to both a 1% minimum tax and a 1% advance tax on export proceeds —regardless of actual profit.
PHMA former chairman Naseer Butt, while speaking at the meeting, said that this dual taxation is counterproductive for an already distressed export sector. He warned that many SMEs are operating on thin margins and may be forced to close down if this policy is not reversed immediately.
PHMA former chairman Shehzad Azam Khan highlighted the issues of refund delays, rising production costs, and inflation. He stressed that exporters are burdened with more taxes than their earnings, and demanded that the government urgently facilitate timely refunds and provide stable energy pricing.
PRGMEA Chairman Dr Ayyazuddin, in his address, raised concerns over changes to the Export Facilitation Scheme (EFS), particularly the removal of zero-rating on local purchases and the imposition of sales tax on imported cotton yarn. He emphasised that these changes undermine the very objective of the EFS, which was introduced to reduce liquidity pressure and digitize export procedures.
PRGMEA former chairman Ijaz Khokhar said that Pakistan's regional competitors like Bangladesh and Vietnam provide tax-free access to raw materials for exporters, giving them an edge in international markets. He called for restoring the original EFS framework under SRO 957(I)/2021, which allowed zero-rated invoicing on local inputs and exempted key materials from sales tax at the import stage.
PRGMEA former chairman Sohail Afzal Sheikh demanded the immediate restoration of Regionally Competitive Energy Tariffs (RCET), which were earlier suspended. He noted that the discontinuation of RCET has led to high manufacturing costs and forced many SME exporters to scale down or shut operations.
He also called for the revival of Duty Drawback on Local Taxes and Levies (DLTL) under the Textile & Apparel Policy 2025–30 and the release of long-pending DLTL and Technology Upgradation Fund (TUF) claims stuck with the State Bank of Pakistan.
All participants in the meeting stressed that further burdening exporters with complex taxation, refund issues, and high input costs will shrink the country's export base and push more businesses out of the formal economy. They emphasized that the textile sector is the backbone of Pakistan's economy and requires urgent policy support.
PHMA Chairman Abdul Hameed urged Prime Minister Shehbaz Sharif, Finance Minister Muhammad Aurangzeb, and Commerce Minister Jam Kamal to intervene personally and ensure the textile sector's proposals are properly addressed. He said the industry remains committed to cooperation, but warned that failure to implement the Anomaly Committee's recommendations could lead to irreversible losses in exports, jobs, and global market share.
Copyright Business Recorder, 2025
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