Textile Exporters Raise Tax Concerns in Meeting With Minister

Major exporters from Pakistan’s textile and apparel sector have expressed serious reservations regarding the prevailing tax and regulatory environment, stating that the current framework places export-focused businesses at a competitive disadvantage compared with companies operating in the domestic market. The matter was raised during a meeting with Muhammad Aurangzeb, where exporters highlighted that the existing system obliges them to pay a two percent advance tax on each transaction, whereas domestic enterprises typically settle their tax liabilities on a quarterly basis.

Exporters further pointed out that a substantial portion of their working capital remains tied up in unresolved refund claims, which creates liquidity pressures for companies engaged in international trade.

Industry stakeholders informed the finance minister that despite maintaining full compliance with tax regulations, the sector continues to encounter elevated operational expenses and persistent regulatory hurdles.

They called on the government to streamline the tax regime, ensure a level playing field between export-oriented and domestic businesses, and resolve delays associated with tax refund processing.

During the discussion, exporters also briefed the government that value-added textile exports are projected to reach approximately $15.6 billion in the 2025–26 fiscal year. According to industry estimates, the value-added segment is expected to contribute between 80% and 85% of total textile exports and nearly 51% of Pakistan’s overall exports.

The finance minister acknowledged the concerns presented by exporters and noted that the government would evaluate potential reforms within the limits of available fiscal space.

Both parties agreed to maintain dialogue and resume consultations following the Eid holidays to deliberate on possible policy adjustments.

Officials emphasized that strengthening export-oriented industries remains a central element of Pakistan’s broader economic strategy.

Aurangzeb stated that enhancing productivity, fostering innovation, and improving the global competitiveness of key industries are essential for expanding export volumes and supporting employment and economic growth.

He further added that the government will continue engaging with industry representatives while refining policy frameworks aimed at promoting investment, eliminating procedural bottlenecks, and preserving macroeconomic stability.