The All Pakistan Textile Mills Association has called on the Federal Board of Revenue to allow textile exporters to adjust their super tax liabilities against pending tax refunds and provide the option to settle any remaining balance through instalments, citing growing liquidity constraints within Pakistan’s export-oriented textile sector.
In a formal communication addressed to FBR Chairman Rashid Mahmood Langrial, APTMA Chairman Kamran Arshad stated that several tax field offices continue to require exporters to deposit the full super tax liability in a single payment. The association said this requirement is being enforced despite earlier requests submitted to the tax authority seeking relief measures for exporters.
APTMA acknowledged that the textile industry respects the ruling of the Supreme Court which upheld the imposition of super tax under Section 4C of the Income Tax Ordinance. However, the association emphasized that many textile mills are currently operating under financial strain and do not have the capacity to immediately settle the entire tax liability.
According to the association, the textile sector is already facing multiple financial challenges, including high energy costs, elevated borrowing rates and a slowdown in export orders. These pressures have affected the liquidity position of exporters, making it difficult for many companies to comply with lump sum tax payments.
APTMA also highlighted concerns about inconsistent practices across different field formations of the Federal Board of Revenue. The association noted that while some taxpayers are reportedly being allowed to pay their super tax liabilities through instalment arrangements, others are being instructed to deposit the full amount immediately.
Such inconsistent implementation, the association said, is creating uncertainty within the industry and making it difficult for companies to plan their financial obligations. APTMA stressed the need for uniform guidelines from the tax authority to ensure consistent treatment of taxpayers across the country.
To address the issue, the textile body proposed that super tax liabilities should be adjusted against all verified and pending refunds owed to exporters. This includes refunds related to both income tax and sales tax.
APTMA further suggested that the adjustment mechanism should not be limited to refunds from a single tax year. Instead, exporters should be allowed to offset their super tax liabilities against any pending and verified refund claims accumulated over multiple years.
If a balance remains after these adjustments, the association recommended that taxpayers be allowed to settle the remaining amount through instalments. In support of this proposal, APTMA referred to the precedent established in the Gas Infrastructure Development Cess case, where the Supreme Court permitted industry participants to clear outstanding dues through 24 monthly instalments.
The association also proposed that advance tax payments and taxes previously assessed should be taken into account when calculating super tax liabilities. According to APTMA, these payments should be adjusted during the determination process so that only the actual net payable amount is recovered from exporters.
Another concern raised by the association relates to exporters that operated under the Final Tax Regime until tax year 2024. APTMA said that the super tax applicable to these exporters should be calculated based on imputable income derived through reverse calculation of income corresponding to taxes that had already been paid under the Final Tax Regime.
The association urged the Federal Board of Revenue to engage with industry stakeholders in order to establish a clear and practical methodology for calculating such imputable income. It also requested the tax authority to issue uniform guidance to its field offices so that the process can be implemented consistently.
APTMA maintained that the export-oriented textile sector plays a vital role in Pakistan’s economy by generating foreign exchange earnings and supporting employment across the country. The association warned that immediate recovery of the full super tax liability without relief measures could further strain the financial position of exporters and potentially affect production and export performance.
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