LAHORE: The Pakistan Hosiery Manufacturers and Exporters Association (PHMA) and the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) have jointly urged the government to adopt the textile sector’s key budget proposals through the Federal Board of Revenue’s budget anomaly committee.
The demand was made during a post-budget meeting attended by PHMA Chairman Abdul Hameed, former PHMA chairmen Naseer Butt and Shehzad Azam Khan, PRGMEA Chairman Dr Ayyazuddin, and former PRGMEA chairmen Ijaz Khokhar and Sohail Afzal Sheikh.
Participants said the government should not only review the proposals through the anomaly committee but must also implement the committee’s final recommendations. Abdul Hameed said the value-added textile sector, including apparel, bed wear, home textiles, and towels, contributes over $11 billion in annual exports and provides jobs to millions.
He raised concerns over the replacement of the Final Tax Regime with the Normal Tax Regime, which subjects exporters to both a 1 percent minimum tax and a 1 percent advance tax on export proceeds, regardless of profits.
Naseer Butt said the dual taxation system is harmful for exporters and warned that small and medium enterprises, already operating on narrow margins, may shut down if the policy is not reversed.
Shehzad Azam Khan said the industry is facing delays in tax refunds, high production costs, and inflation. He said exporters are paying more in taxes than they are earning and called for urgent action to speed up refunds and ensure stable energy prices.
Dr Ayyazuddin expressed concern over changes in the Export Facilitation Scheme, especially the end of zero-rating on local purchases and the application of sales tax on imported cotton yarn. He said these changes go against the scheme’s original aim to reduce liquidity pressure and digitise export procedures.
Ijaz Khokhar said that exporters in countries like Bangladesh and Vietnam receive tax-free access to raw materials, giving them an advantage. He called for restoring the original Export Facilitation Scheme under SRO 957(I)/2021.
