Tax rationalisation must for boosting exports: Pakistan Textile Exporter Association

The value-added textile and clothing sector has asked the government to lower tax rates to boost export competitiveness. This demand was part of a string of proposals submitted to the finance ministry by the Pakistan Textile Exporter Association (PTEA) for incorporation in the budget 2025-26. The value-added manufacturers urged the government to remove the double taxation on the export sector. The exports have started declining, worrying industry players. In the last budget, the association maintained that banks collected 1pc advance tax against export proceeds, which is declared as a minimum tax instead of a final tax. Simultaneously, an advance tax at the rate of 1pc has been levied through the insertion of sub-section (6C) in section 147. However, local suppliers are liable to pay a 1pc advance tax on local supplies of textile goods and 0.5pc for yarn traders. The treatment meted out to the exporters is discriminatory and against the principles of equity and natural justice, according to PTEA.