Pakistan’s textile manufacturers have urged the tax authorities to provide immediate relief on Super Tax recovery, warning that rigid enforcement could further destabilise an industry already under acute financial stress.
In a statement, the All Pakistan Textile Mills Association (APTMA) said the export-oriented textile sector is facing a prolonged liquidity crunch, driven by high energy costs, elevated interest rates, rising production expenses and slowing global demand.
Key concerns raised by APTMA
- One-time Super Tax recovery would severely disrupt cash flows, erode working capital and impair mills’ ability to meet basic obligations such as salaries, utilities and supplier payments.
- Many companies are not financially capable of settling large tax dues in a single payment under current conditions.
- Immediate enforcement risks factory shutdowns, especially among SMEs and export-focused units, potentially leading to job losses and reduced foreign exchange earnings.
Proposed solution
APTMA Chairman Kamran Arshad proposed that the Federal Board of Revenue (FBR):
- Adjust Super Tax liabilities against long-pending refunds, including income tax, sales tax, TUF and DLTL claims.
- Allow the remaining balance to be paid in instalments, enabling compliance without jeopardising operations.
He also called for clarity on Super Tax calculation under Section 4C, particularly for exporters that remain under the Final Tax Regime until Tax Year 2024. APTMA suggested determining imputable income through reverse computation of taxes already paid, aligning liabilities more fairly with the Normal Tax Regime.
Call for engagement and pause in recovery
APTMA urged the FBR to temporarily suspend recovery proceedings and engage with industry stakeholders to issue clear, uniform guidelines, warning that conflicting interpretations and aggressive enforcement could ultimately shrink the tax base rather than strengthen it.
Bottom line: Textile manufacturers argue that pragmatic tax adjustment and instalment mechanisms are essential to preserve operations, exports and employment at a time when the sector’s financial resilience is already stretched thin.
