The group issues a warning, claiming that new tax laws are driving job losses and plant closures while endangering Pakistan’s economic stability.
ISLAMABAD: The government has been urged to immediately change what the All Pakistan Textile Mills Association (APTMA) refers to as “regressive taxation policies,” which are negatively affecting the textile industry. The group issues a warning, claiming that these measures are forcing factories to close permanently and creating a large amount of unemployment.
APTMA expressed grave worry in a statement on Friday on the detrimental impacts of SRO350(1)/2024 and the recent elimination of the sales tax exemption on local materials meant for export manufacture. APTMA claims that these regulatory changes are severely harming the industry and will have a significant impact on employment, the stability of the external sector, and the overall economy.
“The industry is suffering greatly from these regressive policies, which could have disastrous effects on jobs, the economy, and the prosperity of the country as a whole,” the statement said.
The Federal Board of Revenue (FBR) has come under fire from APTMA for persisting in enforcing what it considers to be a “dysfunctional policy” in spite of many requests from industry participants and guarantees from high-ranking authorities. The group pointed out that the operational issues brought about by SRO350 had exacerbated the problems already facing the industry.
Many APTMA members and other businesses are unable to meet filing deadlines because sales tax returns must be filed by linking the complete supply chain. The FBR removed the ability to delink invoices from the return, and this problem results from their upstream suppliers not filing their returns.
In collaboration with the industrial stakeholders most impacted by SRO350(1)/2024, APTMA asked the government to fulfill its commitment and act quickly to reform it.
APTMA stressed that the textile industry could not bear any more delays in finding a solution to this problem, which has already resulted in serious and long-lasting harm.
Furthermore, the group demanded that the Finance Act 2024’s removal of the sales tax exemption on local supplies for export manufacturing be reinstated. According to APTMA, the elimination of zero-rating was prompted by FBR audits that revealed abuse by a tiny percentage of the roughly 1,900 recipients, not as a means of generating income.
“The Export Facilitation Scheme (EFS) heavily encourages the government to reinstate zero-rating for domestic materials utilized in export manufacturing,” says the APIA. The statement added, “The government should implement stricter checks and balances to prevent misuse, rather than penalizing the entire industry.”
APTMA issued a warning, stating that the swift reversal of these harmful policies is necessary to ensure the survival of Pakistan’s textile sector, the livelihoods of millions of people, and the future economic stability of the country.
