Exporters Demand Single Window Authority and Tax Reforms

Leading value-added textile and apparel exporters have formally proposed that export-related matters be designated as an exclusive federal subject, accompanied by the establishment of a centralized “one-window” authority to administer trade policy. This recommendation was presented during a consultative meeting with Minister of State for Finance Bilal Azhar Kiani at the Karachi Chamber of Commerce and Industry, as part of pre-budget deliberations for FY2026–27.

The proposal received collective endorsement from key export bodies representing textiles, apparel, rice, and food sectors, including the Pakistan Hosiery Manufacturers and Exporters Association, the Pakistan Readymade Garments Manufacturers and Exporters Association, the Pakistan Textile Exporters Association, and the Rice Exporters Association of Pakistan.

Stakeholders emphasized that taxation, regulatory frameworks, and incentive structures governing exports should be administered solely at the federal level, with uniform applicability across all provinces. They highlighted that the current fragmented approach results in regulatory overlaps, administrative inefficiencies, and disruptions in trade operations. Furthermore, exporters noted that centralized governance is essential to ensure consistency with Pakistan’s international trade obligations, which are undertaken at the federal level.

The export sector, contributing approximately 56% to the country’s total exports, expressed serious concerns regarding escalating operational costs and liquidity constraints, which have compressed profit margins to an estimated 2–3%, raising questions about long-term viability.

In this context, exporters advocated for the immediate reinstatement of the Fixed Tax Regime, replacing the existing Normal Tax Regime under which corporate entities are subject to a 29% tax rate, while other business structures may face taxation of up to 45%, in addition to ancillary levies.

They further contended that the transition to the current taxation system has exacerbated liquidity challenges, particularly due to upfront tax deductions on export proceeds and persistent delays in the processing of tax refunds, with substantial amounts reportedly outstanding.

Additional policy recommendations included restoring the Export Facilitation Scheme to its prior operational framework, reintroducing the Duty Drawback of Taxes and Levies (DDTL) mechanism with performance-based incentives linked to export growth, and withdrawing the applicability of super tax on export-oriented businesses.

To enhance international competitiveness, the exporters proposed the reintroduction of regionally competitive energy tariffs, stabilization of utility rates, reduction in prevailing interest rates, and simplification of social security contribution mechanisms.

The business community urged the government to prioritize these measures in order to support industrial output, safeguard employment, and strengthen foreign exchange inflows. In response, the Minister acknowledged the concerns and confirmed that nationwide stakeholder consultations are ongoing as part of the federal budget formulation process.