Federation of Pakistan Chambers of Commerce & Industry (FPCCI) President Atif Ikram has urged the federal government to immediately provide level playing field in Export Finance Scheme (EFS) to its pre-Finance Act 2024 form.
He said that the Act’s amendments, which withdrew sales tax exemptions and zero-rating on local supplies used for export manufacturing, have adversely impacted the textile industry and related sectors.
Ikram expressed grave concerns over the widespread closure of spinning mills and the significant losses being faced by the industry. He noted that the misuse of EFS—through the diversion of imported cotton and blended yarns exempted from sales tax and duties into the domestic market—has resulted in substantial losses to the national exchequer and undermined the competitiveness of local manufacturers.
“Our appeals have remained unaddressed,” he stated, highlighting the dire consequences of inaction. “The domestic industry is on the brink of collapse, with over 40 spinning mills already forced to shut down, 60 more on the verge of collapse.” He warned that the ripple effects could devastate upstream sectors such as weaving and processing.
The FPCCI President emphasized that the withdrawal of zero-rating for local supplies used in export manufacturing was intended as a revenue-enhancing measure but has backfired. It has led to a reduction in business activity, further shrinking the government’s revenue base. He called for a balanced and judicious approach to policymaking that protects both the industry and the national exchequer.
“Pakistan’s textile sector once held a unique position globally, rivaling major exporters like India and China,” Ikram said. “However, it is unfortunate that today, these strengths are being undermined by ill-conceived policies.”
Ikram concluded with a strong appeal to the government to take urgent and decisive action. “We must protect Pakistan’s domestic industries and restore the level playing field needed for sustainable growth and employment creation,” he urged.