KARACHI: Textile ind­ustry has sought urgent removal of yarn and fabric from Export Facilitation Scheme (EFS) import scheme in budget FY26 to save the domestic textile value-added chain from complete collapse.

“Subjecting local supplies to 18 per cent sales tax while bestowing zero-rated on imports is an anti-Pakistan policy that is bleeding the economy wi­­thin,” Aptma Central Cha­irman Kamran Arshad, Pakistan Cotton Ginners Association (PCGA) Vice Chairman Mahesh Kumar and Karachi Cotton Asso­ciation (KCA) Chairman Khawaja Mohammad Zub­air told a joint press conference at Aptma House on Tuesday.

The government in bud­get FY25 removed sales tax exemption on local inputs under EFS making imports sales tax and duty-free.

However, the 18pc sales tax on local inputs is refundable, but refunds have been delayed, especially disadvantaged SMEs.

Only 60-70 cent of refunds are issued while the rest are stuck in manual processing with no progress in the last four to five years, they claimed.

Meanwhile, Pakistan Hosiery Manufacturers and Exporters Association (PHMEA) has strongly reacted to the misconception created by Aptma about EFS 2021 and its irrational anti-export demand to impose sales tax on import-stage in EFS which will sabotage the export and industry.

Published in Dawn, June 4th, 2025