The Pakistan Hosiery Manufacturers and Exporters Association has formally called upon the federal government to implement a comprehensive overhaul of national tax, energy, and trade policies ahead of the upcoming Federal Budget 2026-2027. In a detailed submission to the Senate Standing Committee on Finance and Revenue, the association highlighted the critical need for diplomatic and domestic intervention to protect the country’s value-added textile sector. Exporters are currently facing a dual crisis: a domestic environment characterized by unsustainable operational costs and an increasingly hostile global trade landscape shaped by new tariff regimes and shifting international alliances.
Muhammad Jawed Bilwani, the PHMA Patron-in-Chief, presented a nine-point agenda to Senator Saleem Mandviwalla, emphasizing that the survival of the export industry depends on a fundamental shift in governance. The association argues that the current strategy of increasing the tax burden on registered, compliant businesses is counterproductive. Instead, they advocate for policies that facilitate industrial growth, which would naturally expand the tax base and increase national revenue without strangling existing enterprises. Central to their fiscal demands is the reinstatement of the Fixed Tax Regime for exporters, proposing a flat 1 percent turnover tax and the immediate abolition of the Super Tax, which they claim is incompatible with the slim profit margins of the export business.
The PHMA provided a stark regional benchmarking analysis to illustrate the competitive disadvantage currently faced by Pakistani manufacturers. The data reveals that Pakistani industry pays approximately 14 cents per kilowatt-hour for electricity, significantly higher than the 8 cents paid in Vietnam or the 7.2 cents in India. Gas prices follow a similar trend, with Pakistan charging over 14 dollars per MMBTU compared to roughly 6 dollars in India and Indonesia. To level the playing field, the association is demanding the reintroduction of Regionally Competitive Energy Tariffs, specifically targeting an all-inclusive rate of 8 cents for electricity and 7 dollars for RLNG for industrial consumption.
Beyond energy and direct taxation, the association raised serious concerns regarding indirect tax mechanisms and the refund cycle. They have called for the restoration of the Export Facilitation Scheme to its original 2021 format, arguing that recent amendments have forced exporters into a protracted and liquidity-straining refund process with the Federal Board of Revenue. Billions of rupees in sales tax refunds are reportedly stuck, particularly after the exclusion of raw cotton and yarn from the zero-rating scheme. PHMA also proposed moving import duty assessments from a C&F to an FOB valuation to remove freight costs from the taxable base, thereby reducing the financial load on the entire supply chain.
The export group also addressed labour welfare and ease-of-doing-business reforms. They suggested a suspension of mandatory contributions to various provincial social security institutions, citing a lack of transparency in how these funds are utilized. In its place, they proposed a model based on the Bangladeshi experience, where a small percentage of export turnover is deducted directly for labour welfare. Furthermore, the PHMA requested that trade and export be designated as an exclusive federal subject to eliminate provincial interference and ensure a unified national trade policy. They argued that a fragmented regulatory landscape leads to delays, increased costs, and a steady erosion of Pakistan’s global market standing.
On the international front, the association warned of a gathering storm of external threats. The value-added textile sector, which contributes over 17 billion dollars annually to the national exchequer, is threatened by the proposed EU-India Free Trade Agreement and a new US tariff regime. These developments could potentially displace Pakistani products from their most vital markets. Additionally, regional conflicts and shifting geopolitical loyalties in the Gulf pose a risk to the 21 billion dollars in annual remittances that support the broader economy. PHMA urged the government to launch proactive trade diplomacy to defend Pakistan’s market share and negotiate more favorable terms in an increasingly competitive global environment.
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