The textile industry sought restoration of zero-rating status, duty-free import of cotton, a continuation of regional competitive energy tariff (RCET), and an extension of the Long Term Financing Facility (LTFF) scheme for the entire value chain in the upcoming fiscal year. A 20 pages budget proposal sent to the ministry of commerce unraveled 21 budgetary proposals for the next financial year of 2022-23 termed them vital for sustainable growth of the textile industry and export target of $30 billion by 2025
All Pakistan Textile Mills Association (APMTA) asked for a cut in corporate tax to 25 percent from 29 percent and a withdrawal of 1.5 percent turnover tax. The textile Industry also proposed a zero present duty structure on dyes and chemicals. APTMA also proposed that import duty on spare parts for power plants should also be zero arguing that 100 percent of the textile industry is on self-generation of electricity. The industry imports spare parts for keeping power plants operational, and import duty on spare parts for power plants added to the cost of production.
The textile industry argued that Pakistan’s exports in the first 10 months of the current fiscal increased by 26 percent over the previous year to a record of $ 26.25 billion, the majority of which were textiles (61 percent). Growth was enabled by the implementation of RCET, investment of over $ 5 billion in expansion, and establishment of 100 new textile units resulting in an enhanced export capacity of $ 500 million per month.
Regarding restoration of zero-rating or reduction in the rate of GST, the textile industry pitched its argument saying that a sales tax of Rs296 billion was collected and refunded on an export volume of .
4 billion last year. While barely Rs18 billion in sales tax was collected on domestic sales which indicates that the total production sold in the domestic market is approximately Rs106 billion.
