In this photograph taken on November 16, 2016, Pakistani workers operate a machine at a textile factory in Faisalabad. As Pakistan slowly emerges from a long-term power crisis, its once booming textile sector is scrambling to find its feet -- but high energy costs and a decade lost to competitors mean recovery is far from assured. Energy production was severely depressed for more than 10 years due to chronic under-investment, inefficiencies in the power network and an inability to collect sufficient revenue to cover costs. / AFP PHOTO / KHALIL UR-REHMAN / TO GO WITH AFP STORY: Pakistan-Energy-Industry-Textiles, FOCUS by Caroline Nelly PERROT
The All Pakistan Textile Mills Association (APTMA) has urged the Federal Board of Revenue (FBR) to adjust Super Tax liabilities against long-pending tax refunds, warning that immediate recovery could severely disrupt industrial operations and exports.
In a statement issued on Monday, APTMA said manufacturers and exporters are facing acute liquidity pressure and are not in a position to make large Super Tax payments in a single tranche.
APTMA Chairman Kamran Arshad said the export-oriented textile sector has been struggling for months due to weak export orders and an overall difficult business environment. He said demanding Super Tax payments upfront would drain working capital and disturb day-to-day business activities.
According to the association, high energy prices, double-digit interest rates, excessive taxation and rising imports of raw material and intermediate goods have already weakened the domestic industry. Immediate recovery of Super Tax running into hundreds of billions of rupees would further upset cash flows and make it difficult for businesses to meet basic obligations such as salaries, utility bills and supplier payments.
APTMA called on FBR to adjust Super Tax dues against pending income tax, sales tax and other refund claims, including TUF and DLTL. Any remaining liability, the association said, should be converted into business-friendly instalments spread over a reasonable period.
The association also raised concerns over the calculation of Super Tax under Section 4C for exporters.
APTMA said exporters remained under the Final Tax Regime until tax year 2024, and Super Tax should therefore be computed on imputable income derived through reverse calculation of tax already paid.
Kamran Arshad said the absence of clear guidelines has created uncertainty and the risk of multiple interpretations. He urged the tax authority to engage with APTMA and other stakeholders to issue a generic clarification to avoid disputes and ensure fair application of the law.
APTMA further demanded that recovery proceedings be suspended until these issues are resolved.
The association warned that failure to provide workable relief could lead to large-scale closure of textile units, including small and medium enterprises. Such an outcome, it said, would reduce exports, shrink the tax base and result in unemployment of hundreds of thousands of workers.