Leather sector seeks lower taxes, simplified compliance in FY27 budget

Pakistan’s value-added leather sector has urged the government to reduce taxation, simplify compliance procedures and lower production costs in the upcoming FY2026-27 budget to improve export competitiveness.

The proposals were presented during a meeting between representatives of the leather industry and Commerce Minister Jam Kamal Khan on Thursday.

According to an official statement, discussions focused on export performance, taxation pressures, market access challenges and reforms required to strengthen industrial growth.

Industry representatives said Pakistan’s leather sector continued to face structural constraints despite the country’s large livestock base and established manufacturing capacity in leather garments, gloves, footwear, handbags and other value-added products.

The delegation highlighted concerns over multiple inspections, approvals, certifications and taxes imposed by federal, provincial and municipal authorities.

Participants proposed a harmonised compliance framework and a one-window taxation mechanism to improve ease of doing business and reduce operational inefficiencies.

Industry representatives also pointed to rising business costs, high duties on industrial raw materials and difficulties in import financing, which they said were affecting exports and limiting expansion in international markets.

The sector shared preliminary budget proposals including tariff rationalisation, duty adjustments on raw materials and tax relief measures for export-oriented industries.

Participants stressed the need for affordable access to inputs, financing facilities, improved market access and greater regulatory efficiency to support exporters.

The leather industry also highlighted export growth opportunities linked to Pakistan’s livestock resources and expansion of the value-added manufacturing chain.