By SKM
March 6, 2026
ISLAMABAD: A newly proposed amendment to the Punjab Infrastructure Development Cess has triggered strong concern across Pakistan’s industrial and export sectors, with business leaders warning that the measure could significantly increase the cost of doing business and undermine export competitiveness.
In a formal letter addressed to Punjab Chief Minister Maryam Nawaz Sharif All Pakistan Textile Mills Association (APTMA) urged the provincial government to reconsider the Punjab Infrastructure Development Cess (Amendment) Bill 2026. The association argued that the proposed 0.90% cess on goods manufactured, produced, consumed, imported into, or exported out of Punjab would impose a substantial additional financial burden on industry, particularly export-oriented sectors.
The letter, signed by APTMA Chairman Kamran Arshad, warned that exporters operate in intensely competitive global markets where prices are largely dictated by international buyers. As a result, manufacturers would be unable to pass the additional cost on to customers, forcing them instead to absorb the impact through reduced profit margins.
Industry representatives emphasized that export-oriented manufacturers already face a heavy tax burden. Exporters are currently subject to more than 18 federal and provincial taxes and levies, placing significant pressure on margins and investment decisions.
Business leaders say the proposed cess contradicts ongoing efforts by the federal government to rationalize and reduce taxes in order to boost exports and industrial activity.
Copies of the letter were also sent to federal and provincial policymakers, including Commerce Minister Jam Kamal Khan, Industries and Production Minister Haroon Akhtar Khan, and the National Coordinator of the Special Investment Facilitation Council, Lt. Gen. Sarfaraz Ahmad, highlighting the broader economic implications of the proposed measure.
Industry groups argue that Punjab, Pakistan’s largest industrial hub, has already experienced signs of deindustrialization in recent years, largely driven by high energy prices and rising operational costs.
The introduction of a new cess, they say, could discourage further investment and expansion in the province.
“Adding another levy at this stage risks pushing industries toward relocation or discouraging new investment,” the letter noted, warning that export-oriented sectors—particularly textiles—could be disproportionately affected.
Another major concern raised by the industry relates to the bill’s definitions of goods “imported into” and “exported out of Punjab.” According to APTMA, the wording is broad enough to potentially include goods merely passing through the province even if customs clearance occurs elsewhere in Pakistan.
The association also expressed apprehension about the extensive enforcement powers proposed in the bill. These include physical inspections, check posts, pickets, and monitoring stations, which industry representatives fear could disrupt the smooth movement of goods.
Manufacturers warn that such measures could create logistical bottlenecks and open the door to harassment or misuse of authority by enforcement officials.
At a time when Pakistan is seeking to expand exports and revive industrial growth, the industry body urged policymakers to prioritize measures that reduce production costs, remove trade barriers, and improve competitiveness.
PHMA has requested that the Punjab government withdraw the proposed amendment bill and initiate consultations with industry stakeholders before moving forward.
The letter was also shared with key provincial officials, including Senior Punjab Minister Marriyum Aurangzeb, Punjab Industries Minister Chaudhry Shafay Hussain, and Punjab Chief Secretary Zahid Akhtar Zaman.
Industry leaders say a collaborative approach between government and stakeholders will be crucial to ensure that revenue-generation policies do not inadvertently damage Pakistan’s export performance or industrial base.
“As Pakistan urgently seeks to expand exports,” the letter concluded, “policy measures should focus on lowering production costs and removing bottlenecks rather than introducing additional levies that could hinder trade and investment.” End
