Latest news with #PakistanHosieryManufacturers&ExportersAssociation
Business Recorder
a day ago
- Business
- Business Recorder
‘ST imposition under EFS will sabotage export industry'
FAISALABAD: Addressing at a press conference, Senior Vice Chairman of the Pakistan Hosiery Manufacturers & Exporters Association (PHMA), Hazar Khan, warned that the imposition of sales tax at the import stage under the Export Facilitation Scheme (EFS) will sabotage the export industry. He cautioned that the government's move to impose sales tax at the import stage within the EFS framework would be another severe blow to apparel and textile exporters, who are already under immense financial pressure. He emphasised that the collection and refund process of sales tax is not only inefficient but also provides opportunities for corruption through fake refunds, while genuine exporters face long delays in getting their refunds. The value-added textile sector strongly believes that the EFS should be continued in its original form as it existed prior to Budget 2024-25, to ensure liquidity and transparency in the value chain. This stance is also supported by the inter-ministerial committee, led by the federal minister for Planning, under the directives of the prime minister. Chaudhry Salamat Ali, Group Leader of PHMA, stated that the EFS was developed through consultation with stakeholders and has streamlined, digitised, and improved the efficiency of the export process. Fully automated under WeBOC and PSW systems, the scheme has provided financial relief to exporters. He highlighted that APTMA is using outdated machinery with poor quality and high costs, while value-added garment production requires yarn that meets international standards. The government allowed yarn imports under EFS, which is a key reason for the increase in exports. Arif Ihsan Malik, former Chairman of APBUMA, mentioned that duty-free yarn imports have long been allowed under various SROs, similar to policies followed by Bangladesh, Vietnam, and other countries. He refuted APTMA's claim that 100 of their mills have shut down, calling it baseless and demanding that they share accurate data with the media. He also advocated for allowing commercial importers to bring in yarn under EFS so that small and medium-sized exporters can benefit as well. Mian Kashif Zia, former chairman of PHMA, said that the apparel industries in Bangladesh and Vietnam also rely on imported raw materials and their governments run similar facilitation schemes. Imposing sales tax under EFS would defeat its core purpose. Mian Farrukh Iqbal, former Chairman of PHMA, stated that the government has set a $60 billion export target under the 'Uraan' programme, which will be at risk if the EFS is withdrawn. He further claimed that APTMA produces substandard yarn which fails to meet international expectations, thus compromising the quality of garments made from it. Copyright Business Recorder, 2025
Business Recorder
24-05-2025
- Business
- Business Recorder
Fair share of taxes: PHMA objects to FBR's claim
KARACHI: The Pakistan Hosiery Manufacturers & Exporters Association (PHMA) Chairman Muhammad Babar Khan has strongly objected to what he calls a misleading impression by the Federal Board of Revenue (FBR) that exporters do not pay their fair share of taxes. This claim, reportedly shared with the IMF and in parliamentary budget sessions, is 'untrue and damaging,' he said. Babar Khan clarified that under the current Normal Tax Regime (NTR), apparel exporters are paying significantly higher taxes—over 45 percent—compared to the previous Final Tax Regime (FTR), where taxes ranged from 25 percent to 33.3 percent based on profit margins. He explained that under FTR, exporters paid a one percent fixed tax plus a 0.25 percent Export Development Surcharge (EDS), deducted automatically. Now under NTR, exporters pay a one percent minimum tax and one percent advance tax, plus the 0.25 percent EDS—totaling 2.25 percent on export proceeds at the time of realization. Additional taxes are levied on profits annually, increasing the total tax burden. He warned that the manual processing in NTR has increased opportunities for corruption, contrasting it with the automated deductions under FTR. Exporters also face super tax and minimum tax even in loss-making years, with refunds delayed for months—causing severe liquidity issues. PHMA raised concerns over government plans to impose Sales Tax at the import stage under the Export Facilitation Scheme (EFS), saying this would worsen exporters' financial strain as sales tax refunds are already delayed. The association urged the government to retain the original EFS provisions, including the zero-rated status for local purchases under SRO 957(I)/2021, to support competitiveness and ensure smoother operations across the textile value chain. Babar Khan warned that current policies would hurt exports, widen the trade deficit, and reduce foreign exchange earnings. He called on the government to focus on bringing non-taxpayers into the tax net rather than penalizing compliant exporters. Copyright Business Recorder, 2025
