PTC warns FBR's new amendments will cripple Pakistan's textile exports
In a press statement released on Saturday, PTC said that the amendments notified by the FBR through SRO 1359(I)/2025, which, if implemented in their current form, 'will critically damage Pakistan's textile and apparel exports at a time when the sector is already under immense external pressure'.
'PTC strongly urges the Government of Pakistan to intervene and suspend the enforcement of these amendments until a consensus-based revision is undertaken in line with the recommendations of the PM-mandated committee,' it said.
As per the statement, PTC noted that despite the formation of a high-level committee, chaired by Planning Minister Ahsan Iqbal, to review and rationalise the EFS in consultation with the private sector, the recommendations of the committee 'have been completely disregarded'.
'The newly notified amendments have bulldozed recommendations of the committee without addressing the industry's core concerns. The most damaging provision is the exclusion of essential raw materials, including cotton, cotton yarn, and grey cloth, from the scope of EFS,' PTC said.
The council elaborated that these materials form the backbone of Pakistan's textile value chain and their exclusion will mean exporters must now pay import duties and sales tax upfront—despite being export-oriented entities that generate vital foreign exchange for the country.
'This is effectively a tax on exports,' said Fawad Anwar, Chairman of PTC. 'It is unfathomable that at a time when Pakistan is struggling to stabilise its economy and secure foreign exchange, the government would take steps that make it harder—not easier—for exporters to survive.'
Pakistan Textile Council voices concerns over proposed amendments to EFS
The PTC shared that it has submitted detailed objections and policy recommendations to Chairman FBR, Rashid Langrial, and has formally escalated the issue to the Prime Minister's Office, Minister for Planning, Minister for Commerce, and Minister for Finance.
The council urged the government to immediately withdraw the exclusion clause and reconsider other restrictive provisions that will paralyse the EFS regime.
Key objections raised by PTC include:
• The input utilisation period should remain at least 18 months for all EFS users, with reconciliation statements submitted as per rules.
• Permitting provisional authorisation for new EFS users based on declared capacity.
• Replacing bank guarantees with insurance guarantees to reduce cost of compliance.
• Relaxing toll manufacturing restrictions, including impractical 60-day limits and vendor detail requirements.
• Reversing the proposed drawl of intrusive physical sampling rules.
• Maintaining EFS coverage for cotton, yarn, and grey cloth, which was never agreed to be excluded from EFS.
'These changes are being introduced when Pakistan's textile and apparel exports are already threatened by rising global protectionism, including recent reciprocal duties imposed by the United States on Pakistani goods, which is expected to further erode export competitiveness,' it warned.
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'The Prime Minister has ordered that all hurdles to Federal Board of Revenue reforms be removed.' 'He can order all he wants, but…' 'Hey, if you are referring to his powers as enshrined in the constitution then stop right there.' 'No, no and again no. Why do you always take what I say in a way that reflects negatively on our system.' 'Referring to the powers of a PM as enshrined in the constitution reflects negatively on our system!?' 'I know well what you meant, so just stop it. A system that works is worth two in the bush that never worked, is what I say.' 'That makes sense in a way — the expression is a bird in hand is worth two in the bush. I am just curious: did you mean two birds, and if so which birds?' 'No I did not mean birds, I meant a system in place is worth an ideal system that remains in the bush and if with your limited IQ you must understand that…' 'Yes I do anyway going back to PM's order to remove hurdles to FBR's reforms, I reckon that unless the FBR is willing to undertake massive reforms, structural reforms, nothing will change – and by structural reforms I am referring to substantive changes or more precisely a shift from the 75 to 80 percent reliance on indirect taxes as remains evident today, whose incidence on the poor is greater than on the rich, to taxing the influential and the…' 'The FBR is going after sales tax evasion by large companies and…' 'Sales tax is also an indirect tax and it's paid for by the end consumer, so if the FBR succeeds in ensuring that all due sales tax is collected as imposed by the FBR then two negative elements need to be highlighted. First that this would fuel inflation considerably which would further raise the poverty levels that today stand at 44.2 percent and second and equally importantly this indicates that income tax collections from those who are not salaried as their tax is cut at source…' 'Yeah, yeah, yeah.' 'And that means?' 'That means move on, the FBR under its chairman continues to focus on total collections as opposed to actual reforms and…' 'That's against the PM's directive, isn't it? Off with the Chairman I say and…' 'Nah.' 'Nah what: that the PM's directive has not been flouted because he too is focused on total collections or that the Chairman is not likely to be removed because…' 'Eureka — I begin to see some glimmer of hope in your ability to understand the ground realities.' Copyright Business Recorder, 2025
