Islamabad, July 28: The All Pakistan Textile Mills Association (APTMA) has called on Finance Minister Senator Muhammad Aurangzeb to immediately issue a Statutory Regulatory Order (SRO) to implement an 18% sales tax on cotton fibre, yarn, and greige cloth imports, as pledged in the Federal Budget 2025–26.
In a formal letter sent on July 18, APTMA Chairman Kamran Arshad reminded the minister of the government’s budgetary commitment to impose the tax while keeping these imports under the Export Facilitation Scheme (EFS). The association noted that the Federal Cabinet has already approved the relevant summary via circulation.
Originally, APTMA had demanded a complete exclusion of these imports from the EFS, citing serious damage to the domestic textile industry due to unregulated imports. However, the government opted instead for tax equalization between imported and local raw materials used for export production.
APTMA expressed concern over the delay in implementation, pointing out that it has been several weeks since the budget’s approval and that, as per the Deputy Prime Minister’s Committee, the tax was supposed to take effect on July 15.
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The association warned that the uncertainty is harming the market just as Pakistan’s new cotton crop begins arriving. Local cotton, yarn, and greige cloth are struggling to find buyers, as importers take advantage of the tax-free status of foreign inputs. This, APTMA said, has undermined domestic producers and led to reduced demand for local goods.
The textile sector — responsible for over 50% of the country’s exports — posted $1.5 billion growth in FY 2024–25. However, imports also surged by $1.5–$2 billion, which APTMA warned could worsen the country’s balance of payments if swift corrective action is not taken.
