APTMA seeks tax cuts, tariff reforms in FY2026–27 budget proposals

The All Pakistan Textile Mills Association (APTMA) has submitted budget proposals for FY2026–27, seeking tax relief, tariff changes and structural reforms to improve export competitiveness.

The APTMA has proposed abolition of the super tax, stating it affects profitability of large taxpayers. It also called for reducing the minimum turnover tax from 1.25% to 0.5%, citing pressure on margins ranging between 1% and 2%.

The association recommended a phased annual cut of 1% in corporate income tax to align Pakistan’s rates with regional competitors. It also sought removal of advance income tax, saying quarterly payments create cash flow constraints.

APTMA urged restoration of a fixed tax regime for exporters, stating that multiple taxes, including fixed export tax, corporate tax, advance tax, turnover tax and super tax, reduce liquidity and competitiveness.

The proposals also include rationalisation or removal of various federal and provincial levies, including WWF, WPPF and infrastructure cess, noting that exporters face more than 18 taxes amounting to 7% to 11% of turnover.

On sales tax, APTMA suggested a gradual reduction from 18% to 15% and restoration of zero-rating across the textile value chain. It also proposed a tiered tax structure with lower rates on raw materials and intermediate goods.

The association called for excluding man-made fibre yarns and fabrics from the Export Facilitation Scheme, citing increased imports of 42 million kg during July–December 2025 and a decline in local production. It also proposed removing partially processed fabric from the scheme.

APTMA recommended reducing duties on pure terephthalic acid to lower polyester production costs and removing anti-dumping duties on polyester staple fibre, which currently include customs duty and additional levies on imports from several countries.

The association also sought zero-rating of customs duty on industrial spare parts and power plant components, while proposing regulatory and anti-dumping duties on imported yarn and fabric to protect domestic industry.

APTMA said more than 40% of spinning and weaving units have shut down, while remaining units face financial pressure due to rising input costs and import competition.