Latest news with #Aptma
Business Recorder
3 days ago
- Business
- Business Recorder
June 2015 to June 2022: Aptma urges Ogra to defer RLNG bills' payment
ISLAMABAD: The All Pakistan Textile Mills Association (Aptma) has urged the Oil and Gas Regulatory Authority (Ogra) to defer the payment of RLNG bills covering the period from June 2015 to June 2022, citing the need for clarity and reconciliation. In a letter addressed to the Ogra chairman, Aptma Secretary General Shahid Sattar stated that member mills have received RLNG bills amounting to hundreds of millions of rupees. These bills reflect the actualization of provisional charges over a span of seven years and have been issued with a payment deadline of just two working days—by Tuesday, August 12, 2025. 'We strongly protest this action, as no prior explanation, detailed calculations, or breakdowns of these substantial bills have been provided. No reconciliation of the amounts has been carried out,' Sattar wrote. The Aptma emphasised that consumers must be afforded a fair and reasonable period to review such significant charges, in line with relevant laws and regulations. Sattar highlighted that between 2015 and 2022, RLNG rates for the industry were fixed or capped—at $6.5/MMBtu for some periods and $9/MMBtu for others. 'There is no explanation of how these capped rates were treated in the calculation of arrears. It is inconceivable that bills of this magnitude have been issued without transparent justification or supporting data,' he noted. He warned that in the current economic climate, the sudden imposition of these massive bills could lead to the collapse of the manufacturing sector due to a lack of liquidity. The Aptma has requested the Ogra to grant at least 20 days for the textile industry to reconcile its actual RLNG consumption against the amounts billed. 'We also request that detailed bills be issued to all consumers, clearly indicating their monthly RLNG consumption, the additional charges levied month by month, and the applicable provisional and actualized RLNG rates,' Sattar concluded. Copyright Business Recorder, 2025
Express Tribune
07-08-2025
- Business
- Express Tribune
Mills asked to comply with global conventions
Asian Development Bank (ADB) Country Director Emma Fan met with Pakistan's textile millers and discussed in detail the industry's performance, outlook for exports and ways and means for further increasing the volume and value of textile shipments. An ADB delegation, headed by Emma Fan and comprising Asad Aleem, Deputy Country Director, Khayyam Abbasi, Programmes Officer and Shaheryar Choudhry, Senior Investment Officer, held an intensive brainstorming session with the All Pakistan Textile Mills Association (Aptma) management. The delegation asked the business community in general and textile exporters in particular to take immediate measures for compliance with all international conventions, especially with reference to sustainability, labour and human rights. It gave insightful information on the ADB's new Country Partnership Strategy for Pakistan as well as highlighted the key opportunities in different realms of economy and the challenges facing the region. Emma Fan pointed out that the ADB strategy outlines four priority areas, which include energising the private sector, optimising the public sector, enabling human resources, expanding connectivity and access and fostering resilience aimed at long-term economic growth. In the consultative session, the critical role of consistent business-friendly policies and broadening the export base to higher value-added textile exports were particularly highlighted. The ADB expressed strong interest in deepening collaboration with Aptma as part of its strategic road map for Pakistan's sustainable growth. Speaking on the occasion, Aptma Chairman Kamran Arshad gave an overview of Pakistan's textile industry, the major issues faced by it and the way forward in enhancing coordination with the ADB. He also discussed the $50 billion textile export vision over a period of five years through setting up 1,000 garment plants with plug-and-play facilities in the dedicated apparel parks. He sought the bank's assistance for developing the proposed parks, which would not only boost exports, but also generate employment opportunities for millions of workers, reduce poverty and boost foreign exchange reserves. Highlighting the export potential, Kamran Arshad said that Pakistan had registered an impressive growth in value-added textile sectors. More than 70% of Pakistan's exports consist of knitwear, garments, bed wear and towels. Value-added exports have risen sharply in the last decade, especially after the European Union's GSP Plus status.
Business Recorder
28-06-2025
- Business
- Business Recorder
Letters sent to ministers: APTMA for revising grid connection charges, suspending FO levies
ISLAMABAD: All Pakistan Textile Mills Association (Aptma) has sought rationalization of grid connection charges, reduction in grid connection time and suspension of petroleum and carbon levies on Furnace Oil (FO). In letters to Power Minister Sardar Awais Leghari, Petroleum Minister Ali Pervaiz Malik and Director General Textile (Commerce Ministry), Chairman APTMA, Kamran Arshad stated that the government has adopted policies to transition industrial captive generation loads to grid electricity. However, the punitive levies imposed have rendered industrial operations financially unviable without offering a viable transition pathway to grid-based power. Ready to help build robust framework: APTMA questions Nepra's tariff-setting capacity Aptma maintains that the imposition of a Rs. 791/Mmbtu levy on gas used for captive power generation has made it entirely cost-prohibitive. While intended to encourage migration to the electricity grid, the reality on ground is that many industrial units still lack grid connections and, in response, have been compelled to switch to furnace oil (FO)-based captive generation. The Association stated that the imposition of a petroleum levy of Rs. 82,000/ton on FO-on top of the base price of approximately Rs. 130,000/ton—has now left these industries with no economically viable power source. Aptma has cited the example of Soorty Enterprises, a major textile and apparel manufacturer with $400 million in annual exports, employing 35,000 people across different divisions. Soorty has two mills, one in Landhi under KE and another on the Super Highway under HESCO, with a total power requirement of 35MW. Following the grid transition levy on gas, both shifted from gas to FO-fired captive generation that costs around Rs. 33/kWh, compared to around Rs. 29-30/kWh on the grid and will shoot up to Rs. 51/kWh following the levies on FO. The company prefers to run its operations on the electricity grid under KE and HESCO, as it is cheaper than FO-fired captive generation even before the levy. However, KE and HESCO have quoted a cost of Rs 8 billion each to provide grid connections to these units, totalling Rs 16 billion to be paid up front. Additionally, they have been told that it would take about 3 years to connect them to the grid, with no guarantee of timely completion or energisation. On top of this, the company would be responsible for getting approvals from several government departments (like FWO, railways, local authorities, etc.), which adds further costs and difficulties. This situation is wholly untenable. The company cannot rely on gas or FO-fired generation for 3 years with the punitive levies as it will go out of business. However, paying Rs. 16 billion upfront for a grid connection with no guarantee of timely access will also push the company towards bankruptcy. It is at a dead end, with no viable options. 'While we have highlighted the example of only one company, and that too one of the biggest exporters of Pakistan, the same issues are being faced by several of our members, particularly in urban hubs like Lahore and Karachi where issues related to right of way and land availability are prevalent,' Aptma Chief said adding that no company can afford to pay billions of rupees for a grid connection, especially without any guarantee of timely completion. On the one hand, the industry is being penalized for using alternate fuels such as gas and FO and on the other hand, it is effectively barred from accessing the grid due to prohibitively high connection charges, excessive lead times, and bureaucratic delays. It is neither reasonable nor practical for the Government to mandate grid transition while the distribution companies impose insurmountable barriers to achieving it. Considering the foregoing, Aptma recommended the following: (i) Grid connection charges for export-oriented industrial units be rationalized and brought within a financially viable range;(ii) Grid connections be completed and fully energized within a maximum period of six months from fulfillment of demand notes; and (iii) all levies on industrial captive generation -including petroleum and carbon levies on FO-be suspended until all industrial units relying on gas/FO as primary sources of energy are provided affordable and operational grid connections. Copyright Business Recorder, 2025
Business Recorder
17-05-2025
- Business
- Business Recorder
Ready to help build robust framework: APTMA questions Nepra's tariff-setting capacity
ISLAMABAD: The All Pakistan Textile Mills Association (APTMA) has questioned the capacity of National Electric Power Regulatory Authority (Nepra) to formulate power tariffs and offered to assist in developing a framework that is technically robust, economically just, and strategically aligned with Pakistan's development objectives. The intervention comes at a time when Nepra is reviewing the assumptions submitted by the Power Division and the Central Power Purchasing Agency-Guaranteed (CPPA-G) for finalizing the Power Purchase Price (PPP) for FY 2025–26. Aptma's letter to Nepra was issued amid widespread criticism from the business community, which contends that the assumptions behind the proposed tariffs are disconnected from economic realities. The letter highlights several overlooked market dynamics that directly affect the credibility and sustainability of the proposed PPP forecasts. Peak-hour power tariff: APTMA urges govt to share constraint details Key issues raised include the shift from captive power to the national grid, a significant reduction in grid demand due to the rise in behind-the-meter and rooftop solar photovoltaic (PV) systems, unrealistic international fuel price projections, and systemic inefficiencies. Aptma specifically criticized CPPA-G's projected electricity demand growth of 2.8% to 5% for FY 2025–26, calling it disconnected from sectoral realities. According to Aptma, the rapid uptake of solar PV—driven by high grid tariffs, load shedding, declining installation costs, and the competitive Levelized Cost of Energy (LCoE)—has fundamentally altered demand patterns. In 2024 alone, over 17 GW of solar PV modules were imported, with approximately 15 GW now operational and generating an estimated 21.9 TWh annually—equivalent to 14% of national electricity consumption. Despite this major development, CPPA-G's model makes no reference to solar net metering or the impact of rooftop PV generation. 'Load dips during peak solar hours and reverse power flows have become common across DISCOs, yet the PPP model remains static and fails to reflect this systemic disruption,' Aptma stated. The association warned that ignoring BTM generation could lead to miscalculating idle capacity costs and accelerating grid defection. Aptma also flagged concerns over the inequitable industrial tariff structure. It argued that high-voltage consumers—who maintain their own infrastructure and cause minimal technical losses—are charged higher per-unit rates than lower-voltage users (B2 category), in violation of cost-of-service principles under Section 31(2)(f) of the NEPRA Act. This pricing mismatch, Aptma noted, is incentivizing industries to split their loads into multiple low-voltage connections to escape punitive tariffs. The result is distorted demand patterns, inflated low-tension (LT) losses, and poor forecasting accuracy—contrary to Competitive Trading Bilateral Contract Market (CTBCM) principles. APTMA criticized the application of fixed charges based on 25% of sanctioned load or actual Maximum Demand Indicator (MDI), whichever is higher. This approach can inflate effective tariffs by Rs. 5–13/kWh for underutilized industries. It recommended aligning fixed charges with actual recorded demand and called on NEPRA to standardize the treatment of MDI-based charges to enhance transparency and competitiveness. Fuel price assumptions were also deemed outdated. CPPA-G based its model on a Brent crude price of $72–74 per barrel. In contrast, Goldman Sachs and JPMorgan have projected price of $56–$66 per barrel for 2025–26, citing weaker global demand and increased OPEC+ supply. Aptma recommended using $60 as a central assumption, with a downside scenario of $56, aligned with data from Platts and Argus. The letter further criticized the lack of transparency in the modeling of the Capacity Purchase Price (CPP), which forms the bulk of the PPP—ranging from Rs. 16.04 to Rs. 16.80/kWh. CPPA-G's reporting aggregates CPP data, without providing plant-wise or technology-specific utilization rates. Aptma emphasized the need for generator-wise CPP disclosures and the implementation of performance benchmarks to ensure value-based payments. Another significant omission highlighted was the role of captive power generation. Due to high tariffs and the imposition of a Grid Transition Levy, captive users now face an effective gas price of $15.38/MMBTU, despite indigenous wellhead gas being priced at $4/MMBTU. This pricing regime has rendered captive plants economically unviable, leading to a 225 MMCFD drop in captive gas offtake and an RLNG surplus of 450 MMCFD—equivalent to 54 LNG cargoes annually. APTMA stated that 92,594 BBTU of high-cost RLNG (about 31 cargoes) has been diverted to residential users, incurring a cost of Rs. 299.9 billion at an average cross-subsidy rate of Rs. 3,239/MMBTU. This diversion significantly contributed to the increase in SNGPL's Estimated Revenue Requirement (ERR), which jumped by Rs. 707.37/MMBTU for FY 2025–26. The Association lamented the absence of integrated energy planning, which has led to structural inefficiencies across the energy value chain. Key decisions in the power and gas sectors are being made in silos, resulting in mismatches between RLNG procurement and actual demand, underutilized thermal capacity, and unsustainable cross-subsidies. APTMA stressed that the existing approach is financially unsustainable and could trigger a broader liquidity crisis in both public and private energy institutions. It urged NEPRA to require CPPA-G to adopt an integrated, unified energy planning framework that aligns demand forecasts, capacity procurement, and fuel supply strategies with real-world consumption and policy realities. Wrapping up the letter, Aptma called on Nepra to adopt a forward-looking, data-driven approach that reflects Pakistan's evolving energy landscape. The current CPPA-G models, while procedurally compliant, fail to account for major behavioral, technological, and structural shifts affecting electricity demand, fuel economics, and cost recovery. Addressing these gaps through integrated planning, transparent cost disclosures, and realistic demand forecasting is critical to ensuring industrial competitiveness, equitable tariff allocation, and the financial viability of Pakistan's energy sector. Aptma reaffirmed its readiness to collaborate with Nepra to develop a tariff framework that is both technically sound and aligned with the nation's broader economic goals. Copyright Business Recorder, 2025
Express Tribune
27-04-2025
- Business
- Express Tribune
Reforming taxation for salaried class
Talking to members of the All Pakistan Textile Mills Association (Aptma) on Monday, the ombudsman said that tax revenue collection could be increased 'only through a fair, just, easy and efficient tax system'. PHOTO: FILE Listen to article The tax system in Pakistan is constitutionally required to be fair, just and equitable. However, a review of the current system reveals a concerning trend: those who are tax compliant are increasingly burdened, while those who avoid the tax net, often by conducting transactions outside the banking system, face little to no consequences. The salaried class exemplifies this disparity. Despite being among the most tax-compliant segments, regularly filing returns and having taxes withheld at source by employers, they frequently face increased tax rates and the erosion or elimination of available tax benefits. This unjust treatment is often justified by the government's inability to collect adequate revenue from other sectors due to weak enforcement or political constraints. As a result, the salaried class becomes the default target for higher taxation. While this may offer short-term relief in revenue collection, it undermines long-term objectives and fuels a culture that incentivises staying outside the tax net. With the federal budget due within a month, this is an opportune moment to advocate for reforms that support the salaried class, drawing inspiration from international best practices. It's worth noting that the government has projected a 55% increase in revenue collection from the salaried class for the current fiscal year compared to the previous year's collection of Rs368 billion. This increased reliance on the salaried segment will make it more challenging to introduce equitable and supportive tax measures. However, these challenges can be overcome with political will, sound policy design and robust enforcement. It is concerning that tax laws are often amended under pressure from external lenders, yet domestic reforms that promote fairness across all income groups are rarely prioritised. First and foremost, the tax rates applicable to the salaried class must be revisited. The current tax-free threshold should be raised from Rs0.6 million to Rs1.2 million per annum. Moreover, Pakistan rarely indexes its tax brackets to inflation, a globally accepted practice that prevents fiscal drag or bracket creep. Indexing ensures that rising nominal incomes due to inflation do not result in higher effective tax burdens, especially for low and middle-income earners. Far too often, modest salary increments are negated by disproportionate increases in tax liabilities. Another issue that lies with tax rates of salaried class includes that if a person's annual salary exceeds Rs4.1 million, a flat 35% tax rate applies, down from a previous threshold of Rs6 million, creating a steep cliff effect. There is a clear need to introduce additional tax slabs to avoid such abrupt increases. Additionally, inconsistencies between income slabs also merit attention. A salary increase from Rs2.2 million to Rs3.2 million results in a marginal tax rate hike of 5.26%, whereas an increase from Rs3.2 million to Rs4.1 million leads to a lesser rise of 3.64%. Such disparities disproportionately impact middle-income earners and highlight the need for comprehensive slab rationalisation. Unfortunately, Pakistan tends to emulate other countries' tax rate structures without adopting the corresponding tax benefits those countries offer. A recent example is the additional surcharge introduced via the Finance Act 2024, under Section 4AB of the Income Tax Ordinance 2001 (the Ordinance), applicable where the taxable income exceeds Rs10 million. This surcharge is levied even on individuals, including salaried persons and associations of persons (AOPs), and must be reconsidered or withdrawn. A holistic view reveals that the effective tax rate on salaried individuals often exceeds that paid by small business owners, especially those operating informally or under the minimum tax regime based on turnover. Salaried taxpayers are not allowed to deduct any personal expenses from their income. A standard deduction, offered in many countries, including India, should be introduced. India currently allows a standard deduction of INR 50,000 under the old tax regime and INR 75,000 under the new regime. Pakistan could implement a similar deduction without requiring any supporting evidence to cover the basic costs of employment, such as transportation and meals. This deduction could vary depending on the taxpayer's circumstances, with higher deductions for senior citizens, disabled persons, teachers, etc. Lawmakers in Pakistan could also consider introducing dual tax regimes for salaried individuals. One regime could offer lower tax rates but limit deductions to a standard deduction and a few basic tax credits. The other could allow a broader range of deductions and credits in exchange for slightly higher rates. Taxpayers should be given the option to choose the regime that suits them best. Other commonly available deductions internationally for salaried class include those for house rent, mortgage interest, life and health insurance premiums and expenses related to supporting dependents with disabilities or chronic illnesses. These costs significantly reduce their disposable income and should be deductible under a fair tax system. Pakistan currently allows a limited deduction for children's education expenses, but thresholds are too low to be meaningful. These limits should be substantially increased and eligibility should be extended to include the taxpayer's own education and that of other dependents. Additional incentives could include offering tax credits or benefits to salaried individuals who consistently file their returns on time. The ordinance contains multiple penalties for non-compliance, but very few rewards for voluntary and timely compliance. A simple tax credit could be granted in the next fiscal year for taxpayers who filed on time during the preceding year. Since most salaried tax is collected through withholding, this measure would not significantly impact revenue but would encourage compliance. Furthermore, the government could exempt compliant salaried individuals from audits and assessments, except in high-net-worth cases or where specific risk factors are identified. The language of Section 149 of the ordinance should be clarified to clearly outline which claims are permissible when tax is withheld by an employer. In cases where a salaried person receives refund in a prior year, the refund should either be allowed under Section 149 of the ordinance or processed automatically through a streamlined verification mechanism. Many additional reforms could help make the taxation of salaried individuals more just, efficient and supportive of broader economic goals. This segment is among the most documented and compliant in the country, yet it continues to bear a disproportionate tax burden due to weak enforcement in other parts of the economy. It is time to prioritise fairness and equity in tax system not just in principle, but in practice. The writer is a member of the Institute of Chartered Accountants of Pakistan
