By SKM
May 12, 2026
ISLAMABAD: Pakistan’s largest textile representative body, the All Pakistan Textile Mills Association (APTMA), has strongly opposed the Punjab Infrastructure Development Cess (Amendment) Bill, 2026, warning that the newly imposed levy could trigger industrial decline, damage exports, and accelerate deindustrialization in the country’s largest industrial province.
In a strongly worded letter addressed to Punjab Chief Minister Maryam Nawaz Sharif, APTMA Chairman Kamran Arshad termed the legislation — passed by the Punjab Assembly on May 6, 2026 — a deeply disturbing development that has sent “a wave of shock, dismay and distress” across Punjab’s business community.
At the heart of the controversy is the Bill’s provision imposing a 0.90 percent cess on the total value of all goods manufactured, produced, consumed, imported into Punjab, or exported out of Punjab.
According to APTMA, the levy will sharply increase operational costs for industries already burdened by soaring energy tariffs, inflationary pressures, shrinking global demand, and a deteriorating business environment.
The textile sector — Pakistan’s largest export industry and a major source of employment — is expected to be among the hardest hit. APTMA warned that textile exporters operate in fiercely competitive international markets where prices are dictated by global buyers and profit margins remain razor-thin, leaving little room to absorb additional taxation.
“The levy of a 0.90 percent cess at multiple stages of import, manufacturing, consumption and export will completely erode competitiveness,” the association said, warning that Punjab-based exporters could effectively be pushed out of international markets.
Industry leaders fear the cess could function as a cascading tax, increasing production costs throughout the supply chain. According to APTMA, the cumulative burden could weaken exports, discourage investment, and eventually force industrial units to shut down.
The association also expressed alarm over what it called “unbridled enforcement powers” granted to Cess Officers under the amended law.
The Bill authorizes the establishment of pickets, check posts, monitoring stations, electronic surveillance systems, and deployment of enforcement personnel empowered to inspect and monitor movement of goods.
APTMA warned that such measures could create an atmosphere of fear and uncertainty within the business community while exposing industrialists, transporters, and traders to harassment, intimidation, and bureaucratic overreach.
Particular concern was raised over provisions allowing penalties of up to ten times the amount of cess, which industry representatives fear could become a tool for coercive enforcement and operational disruption.
Business leaders further argued that the legislation places Punjab-based industries at a structural disadvantage compared to industries operating in Sindh.
Since the bulk of Pakistan’s imports and exports move through Karachi ports, industries in Punjab would effectively face a dual burden — paying both Punjab cess and existing levies in Sindh. In contrast, Sindh-based industries would generally pay the cess only once, creating what APTMA described as an “unequal cost structure” that unfairly penalizes manufacturers operating in Punjab.
The development comes at a time when Punjab’s industrial sector is already grappling with soaring electricity and gas tariffs, high financing costs, currency instability, and declining manufacturing activity.
Over recent years, numerous textile units have either scaled down operations, shifted production elsewhere, or shut down entirely due to mounting financial pressures.
APTMA warned that instead of promoting industrialization and export growth, the new cess could discourage both local and foreign investment in Punjab.
The association argued that the province urgently needs policies aimed at reducing production costs and expanding exports rather than introducing additional fiscal burdens on manufacturing.
The business body urged the Punjab government to immediately withdraw the “impugned Bill” and reconsider the entire framework for infrastructure cess in consultation with industrial stakeholders.
It stressed that any future taxation mechanism should avoid undermining industrial growth, exports, employment generation, and investor confidence.
The letter reflects growing anxiety within Pakistan’s business circles over rising taxation and regulatory pressures at a time when the national economy remains heavily dependent on export earnings and industrial recovery.
As debate intensifies over the Punjab Infrastructure Development Cess, industry leaders are expected to push for urgent dialogue with the provincial government in an effort to avert what many fear could become another major setback for Pakistan’s already struggling manufacturing sector. Ends
