The All Pakistan Textile Mills Association has urged the government to reconsider and abolish what it terms as ‘regressive taxation policies’ impacting the textile industry.
The association, which represents the country’s textile sector, warned that these policies are leading to the permanent closure of factories and significant job losses.
In a statement issued on Friday, APTMA expressed deep concern over the effects of SRO350(1)/2024 and the recent removal of sales tax exemptions on local supplies for export manufacturing. The association claims these measures are crippling the industry, causing severe repercussions for employment, external sector stability, and the broader economy.
APTMA noted that despite repeated appeals from industry stakeholders and promises from high-level officials, the Federal Board of Revenue (FBR) continues to enforce what it describes as a dysfunctional policy. This policy is reportedly exacerbating operational challenges, particularly those associated with the requirements of SRO350.
The requirement to link the entire supply chain to file sales tax returns has made it difficult for many firms to comply with deadlines, as upstream suppliers have also not filed their returns.
Furthermore, the FBR has removed the option to delink invoices from returns.
The association has called for an immediate amendment to SRO350(1)/2024, urging the government to involve industrial stakeholders in the decision-making process to address the issues at hand.
It also demands the restoration of the sales tax exemption on local supplies for export manufacturing, criticizing the withdrawal of zero-rating as a misguided response to FBR audits that identified misuse by a minority of firms.
APTMA emphasized that restoring zero-rating under the Export Facilitation Scheme (EFS) and implementing more robust checks to prevent misuse are crucial. The association warns that the current policies are accelerating deindustrialization and harming Pakistan’s economic stability.
It stresses that the survival of the textile industry and the livelihoods dependent on it are at stake, calling for urgent action to reverse these detrimental measures.
