Govt plans Export Facilitation Scheme overhaul to curb invoice misuse: report

The federal government is considering amendments to the Export Facilitation Scheme (EFS) 2021 in the fiscal year 2026-27 budget to prevent misuse by commercial importers and introduce a framework for the temporary import, refurbishment and re-export of used vehicles and auto parts, Business Recorder reported, citing official sources.

The Federal Board of Revenue has finalised proposed changes after considering recommendations submitted by stakeholders and is preparing corresponding amendments to the Customs Rules.

One proposed change would replace financial security in the form of bank guarantees with post-dated cheques covering excess duties and taxes deferred or remitted under the scheme.

The government is also considering withdrawing an exemption that allows commercial importers operating under the Export Facilitation Scheme to transfer their sales tax invoices in the domestic market.

Officials said the measure was aimed at curbing the use of flying invoices and other misuse of the scheme in local transactions.

Introduced in 2021, the scheme allows exporters to obtain inputs without paying duties and taxes, subject to their use in the production of export goods.

The number of licences issued under the scheme has increased from about 800 to nearly 2,000.

A special enforcement drive launched in May 2024 resulted in improvements in the scheme’s implementation, particularly in the textile sector, where officials reported higher value addition.

Separately, the government is also considering amendments to the Export Facilitation Scheme and Import Policy Order 2022 to facilitate a proposed pilot project for refurbishing imported used vehicles and auto parts before re-export.