Latest news with #ExportFacilitationScheme
Business Recorder
2 days ago
- Business
- Business Recorder
Cotton fiber, yarn, greige cloth: 18% ST imposed on import?
ISLAMABAD: The Federal Government has reportedly imposed an 18 percent sales tax on the import of cotton fibre, yarn, and greige cloth, following nearly a month-long delay, amid sustained pressure from the All Pakistan Textile Mills Association (APTMA). On July 18, 2025, APTMA formally urged Finance Minister Senator Muhammad Aurangzeb to issue a Statutory Regulatory Order (SRO) immediately to implement sales tax on these imports, in line with commitments made in the Federal Budget 2025–26. In a letter to the Finance Minister, APTMA Chairman Kamran Arshad emphasised the budget's announcement that cotton fibre, yarn, and greige cloth imports would be subjected to 18 percent sales tax, while remaining under the Export Facilitation Scheme (EFS). Selective buying on cotton market 'The Federal Cabinet has approved the Finance Ministry's summary through circulation to fulfil the commitment made to APTMA,' the sources confirmed. APTMA had initially sought complete exclusion of these imports from the EFS, arguing that unrestricted imports were harming domestic industry. However, during the budget process, the government instead committed to equalizing the tax treatment of local and imported inputs used for exports, rather than removing them from the scheme altogether. The Association, in its letter, criticized the delay, noting that substantial time had passed since the budget speech and over three weeks since its formal approval. According to a decision by the Deputy Prime Minister's Committee, the tax was originally meant to take effect on July 15. APTMA warned that the delay had coincided with the arrival of Pakistan's new cotton crop, which was facing a lack of buyers due to market uncertainty. The tax disparity, they stated, had eroded demand for locally grown cotton and domestically produced yarn and greige cloth. The Association further argued that, in the absence of a level playing field, both traders and mills were reluctant to purchase the new crop. The textile sector — which accounts for over 50% of Pakistan's total exports — has shown robust growth with a $1.5 billion increase in FY 2024–25. However, the sector also saw a $1.5–$2 billion rise in imports, resulting in a net negative effect on the balance of payments. Copyright Business Recorder, 2025
Business Recorder
3 days ago
- Business
- Business Recorder
Cotton fiber, yarn, greige cloth: 18pc ST imposed on import?
ISLAMABAD: The Federal Government has reportedly imposed an 18 percent sales tax on the import of cotton fiber, yarn, and greige cloth, after nearly a month-long delay sustained pressure from the All Pakistan Textile Mills Association (APTMA). On July 18, 2025, APTMA had formally urged Finance Minister Senator Muhammad Aurangzeb to immediately issue a Statutory Regulatory Order (SRO) to implement the sales tax on these imports, in line with commitments made in the Federal Budget 2025–26. In a letter to the Finance Minister, APTMA Chairman Kamran Arshad emphasised the budget's announcement that cotton fiber, yarn, and greige cloth imports would be subjected to 18 percent sales tax, while remaining under the Export Facilitation Scheme (EFS). Selective buying on cotton market 'The Federal Cabinet has approved the Finance Ministry's summary through circulation to fulfil the commitment made to APTMA,' the sources confirmed. APTMA had initially sought complete exclusion of these imports from the EFS, arguing that unrestricted imports were harming domestic industry. However, during the budget process, the government instead committed to equalizing the tax treatment of local and imported inputs used for exports, rather than removing them from the scheme altogether. The Association, in its letter, criticized the delay, noting that substantial time had passed since the budget speech and over three weeks since its formal approval. According to a decision by the Deputy Prime Minister's Committee, the tax was originally meant to take effect on July 15. APTMA warned that the delay had coincided with the arrival of Pakistan's new cotton crop, which was facing a lack of buyers due to market uncertainty. The tax disparity, they stated, had eroded demand for locally grown cotton and domestically produced yarn and greige cloth. The Association further argued that, in the absence of a level playing field, both traders and mills were reluctant to purchase the new crop. The textile sector — which accounts for over 50% of Pakistan's total exports — had shown robust growth with a $1.5 billion increase in FY 2024–25. However, the sector also saw a $1.5–$2 billion rise in imports, resulting in a net negative effect on the balance of payments. Copyright Business Recorder, 2025
Business Recorder
5 days ago
- Business
- Business Recorder
Tax exemption misuse: Senate panel voices concern over abuse of IT sector
ISLAMABAD: The Senate Standing Committee on Finance, while voicing its reservations over the statistics of the IT export proceeds provided by the State Bank of Pakistan (SBP), expressed apprehensions that other export sectors were using it for tax evasion. In a meeting of the Senate Standing Committee on Finance held under the chairmanship of Senator Saleem Mandviwalla, the SBP official said that the total IT exports from Pakistan was $920 million. He said that this amount was compiled on the basis of data provided by the banks. Senator Anusha Rahman questioned the credibility of the data. She said that in this amount there is no bifurcation that how much amount comes through the software exports or services provided by freelancers. Rahman said because of the non-availability of authentic data of freelancers export proceeds, the government is finding it difficult to convince international payment platforms such as PayPal to start operations in Pakistan because they think that the consumer base for them is very small. Chairman Committee Saleem Mandviwala said that a lot of textile mills have opened software houses and they were remitting a portion of their export proceeds in guise of IT exports. Rahmansaid there is only one percent tax on non-registered freelancers and IT exporters and on registered freelancers the tax rate is mere 0.25percent, whereas, the tax rate on textile and other sectors is 30 percent. She said there is a strong possibility that the exporters from other sectors might be using IT platform for tax evasion. The SBP official said the banks were fully vigilant and responsible to find out that whether any exporter was misusing the IT platform for tax evasion. He said so far, the SBPhad not find out any such dubious activity. He assured the committee that from now onwards the SBP would bifurcate freelancers' exports data on its website. While discussing software exports over the last 15 years, the committee recommended the SBP to submit data with the clear categorisation of freelancers' share in software exports. The committee also recommended the non-inclusion of periodical and journal subscriptions in the IT services list. Furthermore, the committee was briefed on the AI-based customs system introduced within the Export Facilitation Scheme. Officials informed that the AI system has been introduced to upgrade the existing machine learning model in order to bring efficiency to Pakistan Customs. Senator Mandviwalla inquired about the FBR's plan to introduce AI in Pakistan Customs and its expected benefits for the business sector. The committee recommended a detailed briefing on the inclusion of AI in Pakistan Customs, following the models of developed nations, in the upcoming meeting. Copyright Business Recorder, 2025
Express Tribune
7 days ago
- Business
- Express Tribune
Industry awaits SRO on 18% cotton import tax
Listen to article The Pakistan Business Forum (PBF) has called on the Federal Board of Revenue (FBR) to immediately issue a Statutory Regulatory Order (SRO) for imposing 18% general sales tax (GST) on imported cotton, as outlined in the Finance Bill 2025. In a statement, the PBF emphasised that despite clear announcement in the federal budget to tax the imported cotton, its implementation was pending due to the absence of the required SRO. "More than three weeks have passed since approval of the budget, yet the delay continues without any justifiable reason." According to the PBF, credible reports indicate that certain influential interest groups are obstructing the issuance of the SRO. "The government must ensure transparency and move forward in the interest of local cotton growers and the economy," said PBF Chief Organiser Ahmad Jawad. The forum cautioned that cotton imports had exceeded domestic production for the first time in Pakistan's history – a development that poses serious risks to sustainability of textile and agriculture sectors. "The FBR must act urgently, keeping in view the seriousness of the issue and release the SRO without further delay," it said. The forum disclosed that importers had already entered into agreements for 7.5 million bales of cotton from international markets. "After much effort, local cotton farmers finally achieved a level playing field through legislation. The time has come to translate that into action," Jawad said. To reclaim Pakistan's status as a leading cotton-producing nation, he underlined the need for federal and provincial governments to launch a nationwide cotton revival programme. He recommended that the import of raw material, especially those impacting domestic industries, should be entirely excluded from the Export Facilitation Scheme. The forum also expressed concern over the current state of cotton crops. According to the latest figures, Sindh's performance remains particularly troubling, with reported supply of only 152,650 bales so far this year, compared to 327,666 bales in the same period of last year – a decline of 53%. In contrast, Punjab has shown relatively better results, with supply of 145,101 bales, reflecting a 27% rise over last year. Notable growth has been observed in several districts, including Khanewal (28,825 bales), Vehari (33,950 bales), Dera Ghazi Khan (19,397 bales) and Rajanpur (9,200 bales) – all recording improved yields.
Business Recorder
7 days ago
- Business
- Business Recorder
Sections pertaining to arrest, detention be held in abeyance: APTMA says salutes COAS for his support
LAHORE: The All Pakistan Textile Mills Association (APTMA) extends its deepest and most heartfelt gratitude to Field Marshal Syed Asim Munir, NI (M) for graciously meeting with a business delegation led by Dr Gohar Ejaz, HI, SI (Civ). 'We salute the Field Marshall's exemplary commitment to engaging with the business community and industry, demonstrating both patience and concern for economic issues faced by the businesses and people of Pakistan.' During the highly constructive meeting, the delegation commended the government and SIFC's monumental efforts that have brought much-needed economic stability to the country and thanked the Army Chief for his unwavering support and resolve. It presented a comprehensive overview of the challenges faced by the industrial sector, with particular emphasis on the recently enacted expansions of the Federal Board of Revenue's (FBR) powers. Tax laws: PM directs formation of arrest powers review panel We are immensely thankful to Field Marshall Munir for immediately directing that the new provisions, particularly those added under Sections 37A and 37B of the Sales Tax Act, 1990 pertaining to arrest and detention, be held in abeyance, and for instructing the FBR to enter meaningful, solution-oriented dialogue with stakeholders and address their concerns. The GHQ will oversee progress through the Special Investment Facilitation Council (SIFC), fostering an environment of collaboration and trust. The delegation called for interest rates to be brought down in line with inflation to stimulate businesses and economic activity. It also highlighted the significant delay in notification of the Export Facilitation Scheme (EFS) amendments relating to exclusion of cotton, cotton yarn, and fabric from the scheme and imposition of an 18% sales tax on their imports. Field Marshal Munir assured the delegation that these measures, as announced in the Finance Minister's budget speech, will be implemented without delay. APTMA is grateful for the Field Marshall's attention to unsustainable electricity prices that are burdening manufacturers and businesses across the country. We appreciate his ongoing commitment to securing more competitive electricity rates for consumers nationwide, with special emphasis on revitalizing the industrial and export sectors. His unwavering support is a testament to his overarching vision to propel Pakistan's economic landscape to new heights. On behalf of the entire textile sector and business community, APTMA once again extends its profound gratitude to Field Marshal Syed Asim Munir NI (M) for his visionary leadership and steadfast dedication to Pakistan's progress and growth. Copyright Business Recorder, 2025
