By SKM
July 18, 2025
ISLAMABAD: All Pakistan Textile Mills Association here on Friday asked Federal Finance Minister Mr Aurangzeb Khan to fulfill the budgetary commitment made in the budget speech and impose 18% sales tax on all imports of cotton fiber, yarn of all kinds, and greige fabric, while retaining these items under the Export Facilitation Scheme (EFS).
In a letter written on July 18, 2025 (Friday) to Finance Minister Aurganzeb Khan, Chairman APTMA, Mr Kamran Arshad reminded the Finance Minister that the original request was for their complete exclusion from the EFS considering the damage caused by unnecessary imports to the domestic industry. Nevertheless, the important correction of equalizing the tax treatment of local and imported supplies for exports was pledged during the announcement and presentation of the budget.
As per the copy of the letter of which copy is available with Exclusivewaves.com.pk, it has now been a month and a half since the Budget speech and almost three weeks since the Budget was passed and as per the Deputy Prime Minister’s Committee’s decision, sales tax was to be imposed from 15th July onwards and this date has also passed.
The letter mentions that the requisite SRO has not yet been issued. The delay coincides with the arrival of the new cotton crop, for which there are no buyers in the market. The tax disparity has eroded demand for locally grown cotton and domestically manufactured yarn and greige cloth.
Given the continued uncertainty regarding the imposition of equivalent sales tax on imports, traders and mills are unwilling to off-take the new crop.
Textiles account for over half of Pakistan’s exports and represent one of the few sectors showing robust growth —- exports increased by $1.5 billion in FY 2024-25. However, during the same period, textile sector imports rose by approximately US$1.5-2 billion, yielding a net loss for the balance of payments.
The current account remains precariously balanced only due to temporarily low international oil and gas prices. This situation cannot be sustained in the medium or long term. Pakistan must increase the share of domestic value addition in its exports, yet current policy incentives run counter to that objective.
Any further delay in issuing the promised SRO will exacerbate mill closures, businessmen migrating abroad, and the loss of hundreds of thousands of jobs. To safeguard the livelihood of our growers, spinners, and exporters-and to uphold the Federal Government’s own fiscal and export targets-
APTMA requests that the SRO for imposition of 18% sales tax on cotton fiber, yarn, and greige cloth imports be issued without further delay. Ends
