APTMA urges FBR to offset super tax against pending refunds to protect textile sector

The All Pakistan Textile Mills Association (APTMA) on Monday called on the Federal Board of Revenue (FBR) to allow adjustment of super tax liabilities against pending sales tax, income tax, and other refund claims, warning that immediate collection could destabilise an already cash-strapped textile sector.

APTMA Chairman Arshad said the industry faces a weak business environment, high energy costs, double-digit interest rates, excessive taxation, and rising imports of raw materials and intermediate inputs, which are displacing domestic upstream production. “Immediate recovery of super tax amounting to hundreds of billions of rupees would drain working capital, disrupt cash flows, and make it difficult for businesses to meet routine obligations such as salaries, utility bills, and other financial commitments,” he added.

He urged that any remaining super tax liability, after offsetting pending claims, be converted into “easy, business-friendly instalments” to ease pressure on manufacturers.

Arshad highlighted technical concerns over Section 4C of the Income Tax Ordinance, noting that exporters under the Final Tax Regime (FTR) up to tax year 2024 should have their super tax computed based on imputable income. He recommended reverse computation of income already taxed under FTR to determine an equivalent liability under the Normal Tax Regime.

He further stressed the need for the FBR to engage with APTMA and other stakeholders to issue a generic clarification on Section 4C, to avoid inconsistent interpretations that could disrupt the export-oriented textile sector.

The chairman called for immediate suspension of recovery proceedings until these issues are resolved, warning that failure to provide relief could lead to large-scale closures of textile units, including SMEs, resulting in job losses and reduced foreign exchange earnings. “Such an outcome would shrink the tax base instead of expanding it and further weaken the economy,” Arshad cautioned.