PTBP Web Desk
Pakistan’s textile sector has urged the federal government to introduce major tax, energy, and fiscal reforms in the upcoming Budget 2026-27 to restore export competitiveness and support industrial growth.
According to sources, the government assured textile industry representatives that their budget proposals would be shared with the visiting International Monetary Fund (IMF) mission for discussion. However, officials stopped short of giving any firm commitment regarding the acceptance of these recommendations.
A joint delegation representing major textile associations, including All Pakistan Textile Mills Association, Pakistan Textile Exporters Association, and Pakistan Hosiery Manufacturers and Exporters Association, held detailed meetings with the government’s economic team and the Petroleum Minister.
The textile industry warned that Pakistan’s exporters are struggling with one of the highest effective tax burdens in the region, exceeding 68 percent. Industry leaders compared this with competitor economies such as Vietnam and Bangladesh, where exporters face significantly lower taxation.
Stakeholders demanded the restoration of the Final Tax Regime (FTR) at one percent for exporters or the option to choose between FTR and the Normal Tax Regime with lower income tax rates. The sector also called for the abolition of super tax, minimum turnover tax, and advance taxes on exporters to improve liquidity and profitability.
One of the industry’s biggest concerns is the accumulation of more than Rs327 billion in pending refunds. Exporters said delayed sales tax refunds, duty drawbacks, and income tax refunds have locked up nearly 40 percent of their working capital, creating severe cash flow problems.
The textile sector also highlighted Pakistan’s high industrial electricity tariff of around 11.5 cents per kWh, which is considerably higher than regional competitors. Industry bodies proposed a uniform electricity tariff of 8 cents per kWh and demanded reductions in gas prices to improve competitiveness.
In addition, exporters requested the revival of key incentive programs, including the Drawback of Local Taxes and Levies (DLTL), Technology Upgradation Fund (TUF), and Regional Competitive Energy Tariff (RCET).
Industry representatives further stressed that Pakistan must adopt a stable three-to-five-year industrial policy framework to encourage investment, modernize production, and increase exports in international markets.
