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Business Recorder
13 hours ago
- Business
- Business Recorder
Textile bodies demand continuation of original EFS
KARACHI: The Value-Added Textile Associations Forum, representing various apparel and textile bodies, jointly held a press conference on Wednesday, demanding the continuation of the Export Facilitation Scheme (EFS) in its original form as introduced in 2021, without any amendments made in the Federal Budget 2024-2025. The presser held at PHMA House with leaders of different textile associations strongly opposing the imposition of Sales Tax at the import stage under the scheme, warning it would undermine the purpose of facilitating exporters. The forum called on the Government of Pakistan to continue the scheme under section 880(1)(b) of SRO 957(I)/2021, which allows local input goods liable to sales tax to be supplied against zero-rated invoices. This provision, they said, ensures liquidity, competitiveness, and formalization across the export-oriented industry value chain. 'EFS is inevitable and a lifeline for enhancing national exports,' the associations declared in a unified voice. They urged the reinstatement of local procurement under the scheme to support the entire textile value chain, enabling a level playing field and a win-win for all stakeholders. Export Facilitation Scheme be retained in FY26 budget They explained that the scheme was launched in 2021 after wide consultation with stakeholders to simplify and streamline export procedures. EFS merged all previous schemes into one, reduced documentation requirements, and introduced a single-window digital system through WeBOC and Pakistan Single Window (PSW). The fully automated system includes real-time audits and helps regulate compliance costs. According to the forum, since its inception, the EFS has played a crucial role in easing liquidity pressures and supporting exporters' competitiveness. The press conference was addressed by leaders including Jawed Bilwani (Chief Coordinator, Value-Added Apparel & Textile Associations Forum), Muhammad Babar Khan (Central Chairman, Pakistan Hosiery Manufacturers & Exporters Association), Ijaz Khokhar (Former Chairman, Pakistan Readymade Garments Manufacturers & Exporters Association), Rafiq Godil (Former Chairman, Pakistan Knitwear & Sweater Exporters Association), Farooq Rahman Dittu (Pakistan Cotton Fashion Apparel Exporters Association), Ather Bari (Chairman, Towel Manufacturers Association), Irfan Merchant (Chairman, Denim Manufacturers & Exporters Association), Khurram Mukhtar (Former Chairman, Pakistan Textile Exporters Association), Hamid Arshad Zahur (Chairman, Pakistan Tanners Association), and other representatives from major exporting cities including Karachi, Lahore, Faisalabad, and Sialkot. Jawed Bilwani stressed that EFS has been critical in supporting not only textiles but other export sectors as well. He pointed out that all associations, including APTMA, initially welcomed EFS. In an Inter-Ministerial Committee chaired by Planning Minister Ahsan Iqbal, APTMA representatives agreed that the scheme should continue in its original form. However, APTMA later parted ways and demanded the imposition of Sales Tax at the import stage under EFS—a move that Value-Added Associations rejected strongly. He warned that imposing Sales Tax at the import stage would defeat the very objective of EFS, causing severe liquidity issues and harming exporters' competitiveness. Bilwani also revealed that APTMA, in the same committee meeting, admitted their yarn quality—produced from contaminated local cotton—is not on par with imported yarn. He stated that even the top 100 textile exporters, including composite units under APTMA, support the continuation of EFS in its original form with local procurement allowed on zero-rated invoices. He added that the upcoming federal budget should also include the reinstatement of Regionally Competitive Energy Tariffs and Final Tax Regime (FTR) to ensure financial viability and export growth. Speaking at the press conference, PHMA Central Chairman Muhammad Babar Khan rejected APTMA's 'misleading' demand to impose Sales Tax at the import stage under EFS. He said that spinning is only a sub-sector of the textile industry, while the value-added sector remains committed to supporting the entire value chain. He urged the Government to create policies that benefit all textile sub-sectors equally, from garments to spinning and ginning. Babar Khan highlighted that rising manufacturing costs have hurt all textile sectors. The apparel and garment sector contributes the highest value addition, up to 70 percent, and needs EFS to remain unchanged to stay competitive. He questioned why APTMA, after supporting EFS from 2021 to February 2025, has suddenly changed its stance. He urged APTMA to drop their unjustified demand for Sales Tax at import-stage and return to supporting the reinstatement of local procurement in the scheme. Babar Khan recalled the key strengths of EFS: a strategic and fully automated system built with input from all textile associations to reduce compliance burdens and simplify export operations. The scheme offers end-to-end traceability and operates in a fully digital environment through WeBOC and PSW. The association leaders agreed that countries like Bangladesh and Vietnam also rely heavily on imported raw materials to manufacture export garments. Their governments offer facilitation schemes similar to EFS, making it crucial for Pakistan to maintain parity. They stated that collecting Sales Tax from exports only to refund it later serves no real purpose and often leads to long refund delays, further straining exporters' liquidity. They emphasized that EFS should remain unchanged and that the FBR should focus on expanding the tax base instead of burdening existing exporters. Exporters' Sales Tax refunds have already been delayed for months, and adding more taxes will only increase their hardships. The associations repeated their firm demand to continue EFS in its original form as of 2021—before the 2024-2025 Federal Budget—with local procurement allowed under section 880(1)(b) of SRO 957(I)/2021, which permits local input goods subject to Sales Tax to be supplied against zero-rated invoices. This, they said, is necessary to ensure liquidity, competitiveness, and formalization of the export value chain. The continuation of EFS in its original form has also been recommended by the Inter-Ministerial Committee chaired by the Federal Planning Minister, under the Prime Minister's direction. Other PHMA representatives present at the event included Former Chairmen Chaudhry Salamat Ali, Farrukh Iqbal, Kashif Zia, Sr. Vice Chairman Hazir Khan (Faisalabad), Former Chairman Shahzad Azam Khan and Zonal Chairman Abdul Hameed (Lahore), Tariq Bhatti and Khawaja Musharraf (Sialkot), PRGMEA Northern Zone Representatives Sohail Afzal and Ayazuddin, and numerous top exporters from Karachi, Lahore, Faisalabad, and Sialkot. Copyright Business Recorder, 2025
Business Recorder
13 hours 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
22-05-2025
- Business
- Business Recorder
Pakistan Customs detects import fraud at AHICT, KICT
KARACHI: Pakistan Customs has detected tax fraud involving mis-declaration of high-value electronic goods and machinery in two separate cases at Al-Hamd International Container Terminal (AHICT) and Karachi International Container Terminal (KICT). According to the details, the Collectorate of Customs, Appraisement, West has registered two separate FIRs for high-value import frauds through mis-declaration of goods. The first fraud was reported at Al-Hamd International Container Terminal, where customs officials discovered severe discrepancies between the declared items and actual contents during examination. 'The accused attempted to evade approximately Rs. 74 million in taxes and duties through falsified documentation,' the documents said. 'The mis-declared goods, valued at Rs. 213 million, included concealed high-value electronics and switched items.' The investigation revealed the importer had submitted manipulated invoices and bills of lading through the WeBOC system. In another case, the accused company allegedly attempted to pass off advanced computerized injection moulding machines as older, less valuable equipment by affixing fake identification plates. Customs officials conducting a re-examination at Karachi International Container Terminal discovered undeclared equipment, including vertical colour mixers and hoppers. The scheme attempted to evade Rs. 2 million in duties on goods valued at Rs. 15.23 million. Multiple individuals have been implicated, including company directors, clearing agents, KICT, and AHICT staff. The investigation remains ongoing with further arrests expected as authorities work to identify all involved parties. Copyright Business Recorder, 2025
Business Recorder
22-05-2025
- Business
- Business Recorder
‘EFS scheme a must for export-led growth, trade balance improvement'
KARACHI: President Karachi Chamber of Commerce & Industry (KCCI) Jawed Bilwani, while highlighting the crucial role played by the Export Finance Scheme (EFS) in sustaining Pakistan's exports said the EFS scheme is imperative to ensure continued export-led growth and trade balance improvement. He emphasised that the said scheme must continue in its original status and position prior to Federal Budget 2025-26 with reinstatement of local purchases under Section 880 (1)(b) of SRO 957(I)/2021 for acquisition of input goods (to allow local input goods liable to sales tax shall be supplied against zero-rated invoices) to ensure liquidity, competitiveness, and formalisation across the entire value chain as already recommended by the inter-ministerial committee headed by the federal minister for planning constituted by the prime minister. 'Despite contending with the highest regional costs of electricity, gas, water, and interest rates, Pakistan's exports have shown remarkable resilience, a feat largely attributable to the support provided by the EFS. Preserving and enhancing this scheme is essential for maintaining our export competitiveness,' he added. He highlighted the EFS was strategically developed through broad-based consultation with stakeholders to simplify and streamline export procedures, enabling a more progressive and accessible export environment. It consolidated all previous schemes under one umbrella, minimized documentation requirements, and facilitated ease of doing business through a fully automated system integrated with WeBOC and Pakistan Single Window (PSW). The scheme included real-time audits and end-to-end traceability to regulate compliance costs and ensure transparency. Bilwani added the EFS has played a crucial role in easing liquidity pressures for exporters, particularly in the value-added textile and apparel sector, where access to input goods is vital for sustaining production and delivery timelines. The import of specialized yarns and fabrics under EFS has been particularly instrumental in enabling exporters to meet international quality standards. 'Much of the quality yarn and fabric used by Pakistan's apparel exporters is not produced domestically, and the local alternatives, where available, are often of lower quality and higher cost,' Bilwani explained. 'The garments manufacturers using imported yarn are of superior quality, giving our exporters a competitive edge in global markets.' The value-added apparel sector, he noted, achieves up to 70 percent value addition on export goods and requires uninterrupted access to high-quality raw materials. 'Countries like Bangladesh and Vietnam are completely reliant on imported raw materials for their export-oriented textile sectors, and their success is proof of the effectiveness of such models when supported by robust facilitation mechanisms,' he added. President Bilwani warned, however, that policy changes announced in the last federal budget, particularly the removal of zero-rating for local supplies, have disrupted the balance between imported and local raw materials. 'Currently, while imported raw materials are tax-exempt, local inputs are subject to an 18% sales tax with delayed and costly refunds,' he said. 'This creates a structural imbalance, discouraging local sourcing and impacting domestic SMEs across the value chain.' In view of the IMF's reservations about restoring full zero-rating, Bilwani proposed a pragmatic middle path, such as adopting a negative list to restrict high-risk imports under EFS, while preserving the broader scheme's facilitative framework. To further strengthen EFS, Bilwani reiterated the proposal for real-time audits and digital monitoring to reduce processing delays, enhance transparency, and ensure the scheme's credibility. 'If implemented effectively, the EFS has the potential to become a strategic pillar in eliminating Pakistan's trade deficit and ensuring long-term export sustainability,' he concluded. Copyright Business Recorder, 2025
Express Tribune
22-05-2025
- Business
- Express Tribune
Businessmen demand EFS restoration in original form
Listen to article Karachi Chamber of Commerce and Industry (KCCI) President Jawed Bilwani, while highlighting the crucial role played by the Export Finance Scheme (EFS) in sustaining Pakistan's exports, emphasised that the scheme must continue in its original status and position, which was before the presentation of federal budget for fiscal year 2024-25. In a statement, he called for allowing local purchases under Section 880 (1)(b) of SRO 957(I)/2021 (local input goods liable to sales tax to be supplied against zero-rated invoices) to ensure liquidity, competitiveness and formalisation across the entire value chain, as recommended by the Inter-Ministerial Committee. "The EFS is critical to ensuring continued export-led growth and trade balance improvement," he said. "Despite facing the highest regional costs of electricity, gas, water and interest rates, Pakistan's exports have shown remarkable resilience, a feat largely attributable to the support provided by the EFS. Preserving and expanding this scheme is essential for maintaining export competitiveness." Bilwani highlighted that the EFS was strategically developed by consolidating all previous schemes under one umbrella, which minimised documentation requirements and facilitated ease of doing business through a fully automated system integrated with Web-based One Customs (WeBOC) and the Pakistan Single Window (PSW). "Much of the quality yarn and fabric used by Pakistan's apparel exporters is not produced domestically and the local alternatives, where available, are often of lower quality and higher cost," he pointed out. "The imported yarn used by garment manufacturers is of superior quality, giving exporters a competitive edge in global markets." The value-added apparel sector makes up to 70% value addition to export goods and requires uninterrupted access to high-quality raw material. "Countries like Bangladesh and Vietnam are completely reliant on imported raw material for their export-oriented textile sectors and their success is a proof of effectiveness of such models when supported by robust facilitation mechanisms," he said. Bilwani warned that policy changes announced in the last federal budget, particularly the removal of zero-rating for local supplies, disrupted the balance between imported and local raw material. "Currently, while the imported raw material is exempt from taxes, local inputs are subject to 18% sales tax with delayed and costly refunds," he said. "This creates a structural imbalance, discouraging local sourcing and impacting SMEs across the value chain." In view of the IMF's reservations about fully restoring the zero-rating facility, he proposed a pragmatic middle path such as adopting a negative list to restrict high-risk imports under the EFS while preserving the broader scheme's facilitative framework.
