TMA advocates critical budgetary reforms at Senate body moot
KARACHI: Towel Manufacturers Association of Pakistan (TMA) played an active role in the Standing Committee of the Senate on Budget Consultation 2025-26, where Aamir Hassan Lari and Muhammad Haroon attended on behalf of the association and brought forward a detailed budget proposal that focuses on empowering Pakistan's export industry, industrial development, and financial stability.
At the meeting, TMA highlighted the imperative to implement policy reforms aimed at increasing transparency, simplifying tax processes, and bringing relief to exporters much-needed. The association identified some of the key steps that would increase exports, lower financial costs, and increase industrial competitiveness.
Major budgetary recommendations submitted by TMA
Revival of SRO 1125(I)/2011
TMA vehemently supported the revival of SRO 1125(I)/2011, a policy that had earlier allowed zero-rating for the textile industry.
Revival of this rule would:
Increase exports and industrialization by lowering the cost of doing business.
Reduce corruption by removing unnecessary tax complexities.
Simplify tax procedures, making it easier for businesses to comply.
Increase transparency and regain confidence in the economic system, promoting both local and foreign investments.
Reinstatement of the Export Facilitation Scheme (EFS) on Local Purchases
TMA requested the government to reinstate the EFS in its original manner, enabling exporters to procure raw materials locally under the scheme. This measure would:
Encourage domestic production, cutting dependence on imported raw materials.
Sustain the development of local industries, providing employment.
Strengthen Pakistan's industrial base, enabling it to become more competitive in the international market.
Transition to Final Tax Regime (FTR) for Exporters from NTR
The association recommended that exporters and indirect exporters switch from the Normal Tax Regime (NTR) to the Final Tax Regime (FTR) with a final tax of 1%. This policy is designed to:
Lower the tax burden of exporters so that they can expand business.
Simplify taxation processes, removing unnecessary bureaucratic roadblocks.
Promote entry of new exporters into the market by offering a more stable tax regime.
Accelerated Refunds to Exporters
TMA mentioned the pending refunds for Duty Drawback, DLTL (Drawback of Local Taxes and Levies), R&D, Income Tax, and Sales Tax and asked the government to settle them at the earliest to avoid export financing burden.
The association suggested:
Instant payment of outstanding refunds to keep exporters liquid.
Redeployment of the Export Development Surcharge fund to settle outstanding DLTL and R&D claims in case of unavailability of government funds.
A system of structured refunds to avoid future delays and enable timely payment.
Reduction in Exporters' Electricity Rates
To ease cost burdens on exporters, TMA suggested a cost-sharing arrangement where the government would bear 50% of the cost of electricity and the Export Development Fund (EDF) would bear the remaining 50%, reducing the rate of electricity to Rs 5/KWH.
This step would:
Lower the cost of production, making Pakistani exports competitive in the international market.
Promote industrial development, resulting in more employment opportunities.
Support small and medium-sized enterprises (SMEs) in the textile industry by reducing operational costs.
Reform in Export Development Fund (EDF) Allocation
TMA recommended halting EDS collection from exports until funds currently available are utilized to the maximum. Moreover, when EDS collection is resumed, sector-wise allocation of funds should be made so that every sector has its own Research & Development (R&D) initiatives.
This reform would:
Ensure equitable distribution of funds, enabling each sector to invest in innovation.
Encourage industry-focused R&D, with a view to developing technologies.
Make Pakistani textile and towel production industries more globally competitive.
Commitment to Economic Growth and Industrial Development
The suggestions made by TMA mirror the imperative to make policy interventions for the support of Pakistan's export industry, improvement in industrial competitiveness, and facilitation of a more business-friendly economic environment. The association continues to be willing to work together with policymakers for the effective implementation of these recommendations for the welfare of the textile sector and the national economy.
TMA calls upon the government to include these proposals in the next budget to facilitate sustainable growth in exports, industrialization, and economic stability. The association is optimistic that these steps will be included in the national budget, leading to a robust, resilient economy.
Copyright Business Recorder, 2025
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