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Business Recorder
3 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
4 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
Axios
6 days ago
- Business
- Axios
Social Security recipients set to face an $18,000 benefit cut in just seven years
Retirees are facing the prospect of substantial Social Security cuts in just seven years, sooner than projected, due to the "big, beautiful bill," per an analysis out Thursday from the Committee for a Responsible Federal Budget. Why it matters: If policymakers don't stop this from happening, it would at least double the poverty rate of America's seniors, per several estimates. By the numbers: The new analysis projects a 24% cut to benefits by late 2032. That's equal to an $18,000 annual benefit cut for a dual-earning couple who both retire in 2033. They also might experience reduced healthcare access, per the analysis, due to an 11% cut in Medicare hospital payments. The percentages would grow over time, as the population ages and fewer young Americans are paying into the system. How it works: The trust fund is effectively the money the federal government takes in from Social Security taxes. For decades, the system took in more in taxes than it paid out, the Treasury department then invested the surplus. In 2021, it started tapping reserves to keep paying benefits. Once the reserves are depleted, benefits would be "pay-as-you-go," paying out money as taxes come in. That the trust fund would be depleted in the 2030s has long been known. Zoom in: The tax cuts in the big bill and the increase in the deduction for seniors, specifically, would reduce Social Security's incoming tax revenue — and speed up depletion by about a year, per the CRFB. The big picture: Social Security is arguably the most popular government benefit — most Americans either receive benefits or know someone who does — the vast majority of Americans believe in its importance, according to recent polling. The bottom line: Most policy wonks and Social Security advocates believe that it's highly unlikely that Congress would sit back and watch benefits get cut like this.
West Australian
19-07-2025
- Business
- West Australian
Editorial: As momentum finally builds, Treasurer Jim Chalmers must act on the tax reform
If one of life's few certainties is tax (alongside death, depressingly) then one of economics' certainties is the constant call for tax reform. For once, there could be some momentum behind those calls, with Treasurer Jim Chalmers sounding a positive tone and saying the right things ahead of a highly-promoted economic reform roundtable, for which there are high hopes. 'Of course we are interested in ways to simplify the tax system.,' he said during the week. 'Ideally, people will come with views about how we simplify the tax system and where that fits more broadly into our efforts on productivity.' The Productivity Commission has also published submissions to its inquiry into economic dynamism and resilience, including from the nation's biggest company, the Commonwealth Bank, which is urging a greater clampdown on multinational tax avoidance. 'It will be critical that we find mechanisms to ensure that multinationals do not profit-shift offshore, but instead contribute to Australia and pay their fair share of tax,' the CBA said. 'This is particularly true for software-based businesses, which continue to grow significantly faster than the economy.' Australia's tax take — the way government funds its spending on services the nation enjoys and needs — has been for too long now too reliant on personal income taxes compared to other forms of revenue. In the 2023-24 financial year, income tax was $331.5 billion, with the strong labour market pushing that figure 11.7 per cent higher compared to the year before. Productivity Commissioner Danielle Wood, in her former capacity as head of the Grattan Institute think tank, previously explained various taxes cost the economy in different ways — that some come at the cost of economic activity and some cost the system more than they actually collect. Stamp duty on property purchases remains the bugbear of many academics, but few State governments will willingly accept reform in that area given how much revenue it yields. With a projected decline in the number of workers, Australia needs to reform its tax system to ensure it's effective beyond relying on income tax. This concern is even more acute when considering the big expenses facing the country: Medicare, the NDIS, aged care and defence, and when considering the Federal Budget is in structural deficit. To this end, a raft of options should be on the table, with big business, key lobby groups and research institutes attending the reform roundtable next month. Though tempting to just write it off as another gabfest (and the Treasurer, should this eventuate, will rightly be condemned) the potential is too great given how genuine tax reform has not been implemented for decades. While a sugar tax may be controversial, it's an idea worth considering, as are broader changes to cut tax concessions that don't add to the economy. The Treasurer must seriously commit to action following the talks, and ensure the tax system is fair and equitable for coming generations. The worst outcome from yet another political talkfest would be maintaining the status quo. Responsibility for editorial comment is taken by Editor-in-Chief Christopher Dore.
Business Recorder
19-07-2025
- Business
- Business Recorder
APTMA approaches Aurangzeb: Call to issue SRO issuance to impose 18pc sales tax on cotton fibre, yarn, & greige cloth imports
ISLAMABAD: All Pakistan Textile Mills Association (APTMA) has approached Finance Minister, Senator Muhammad Aurangzeb to issue an SRO (Statuary Regulatory Order) for the imposition of 18% sales tax on cotton fiber, yarn, and greige cloth imports without further delay. In a letter to Finance Minister, Chairman APTMA, Kamran Arshad has drawn his attention to the commitment made in the Federal Budget 2025–26 to impose 18% sales tax on all imports of cotton fiber, yarn of all kinds, and greige fabric, while retaining these items under the Export Facilitation Scheme (EFS). 'Our original request was for their complete exclusion from the EFS considering the damage caused by unnecessary imports to the domestic industry. Nevertheless, the important correction of equalizing the tax treatment of local and imported supplies for exports was pledged during announcement and presentation of the budget,' Chairman APTMA said adding that it has now been a month and a half since the Budget speech and almost three weeks since the Budget was passed; in accordance with the Deputy Prime Minister's Committee's decision, sales tax was to be imposed from July 15, onwards and this date has also passed. Yet the requisite SRO has not been issued. The Association further stated that delay coincides with the arrival of the new cotton crop, for which there are no buyers in the market. The tax disparity has eroded demand for locally grown cotton and domestically manufactured yarn and greige cloth. Given the continued uncertainty regarding the imposition of equivalent sales tax on imports, traders and mills are unwilling to off-take the new crop. Textiles account for over half of Pakistan's exports and represent one of the few sectors showing robust growth-exports increased by $1.5 billion in FY 2024–25. However, during the same period, textile sector imports rose by approximately US$1.5-2 billion, yielding a net loss for the balance of payments. The current account remains precariously balanced due to temporarily low international oil and gas prices. This situation cannot be sustained in the medium or long term. Pakistan must increase the share for domestic value addition in its exports, yet current policy incentives run counter to that objective. 'We submit that any further delay in issuing the promised SRO will exacerbate mill closures, businessmen migrating abroad, and the loss of hundreds of thousands of jobs. To safeguard the livelihood of our growers, spinners, and exporters-and to uphold the Federal Government's own fiscal and export targets we request that the SRO for imposition of 18% sales tax on cotton fibre, yarn, and greige cloth imports be issued without further delay,' he maintained. Copyright Business Recorder, 2025
