The All-Pakistan Textile Mills Association (APTMA) has urged Finance Minister Muhammad Aurangzeb to honor the commitments announced in the Federal Budget 2025–26, particularly regarding the taxation of textile imports.
In a letter to the minister, APTMA reminded the government of its budget pledge to impose an 18 percent sales tax on all imports of cotton fiber, yarn, and greige fabric, while retaining these inputs under the Export Facilitation Scheme (EFS).
“Our original demand was for the complete removal of these items from the EFS, as unnecessary imports have damaged the domestic industry. However, the minimum corrective measure—ensuring equal tax treatment for local and imported supplies—was promised during the budget announcement,” the association stated.
According to APTMA, it has been more than six weeks since the budget speech and nearly three weeks since its approval. As per the Deputy Prime Minister’s Committee decision, the tax was to take effect from July 15, but the required Statutory Regulatory Order (SRO) has yet to be issued.
This delay, the association warned, coincides with the arrival of the new cotton crop, leaving growers without buyers. The tax disparity between local and imported cotton and yarn has eroded demand for domestically produced raw materials. Mills and traders remain reluctant to purchase the new crop amid uncertainty over the promised taxation measures.
APTMA highlighted the broader economic stakes, noting that textiles make up over half of Pakistan’s exports, contributing an additional $1.5 billion in FY25. However, textile-related imports rose by $1.5–2 billion, negating the gains in the balance of payments.
The current account, it warned, is artificially stable due to temporarily low global oil and gas prices, a situation that cannot be sustained. APTMA stressed the need for greater domestic value addition in exports, arguing that the current policy environment undermines this objective.
