Stringent taxation shrinks Pakistan’s textile exports by 8.2% in 2024, raising competitiveness concerns

Pakistan’s textile industry, a cornerstone of the national economy, is grappling with declining competitiveness due to stringent taxation policies. In the first half of 2024, textile exports from Pakistan fell by 8.2% year-on-year, amounting to .

2 billion, down from $7.85 billion during the same period in 2023. This downward trend is raising alarms in an industry that accounts for over 60% of the country’s total exports.

Industry experts and stakeholders have pointed to the heavy taxation burden as a significant factor behind this decline.

The imposition of additional taxes, including a 17% sales tax and increased duties on raw material imports, has significantly raised production costs. This increase has made Pakistani textile products less competitive on the global stage, particularly against rivals like Bangladesh and Vietnam, who enjoy more favorable tax regimes.





Further exacerbating the situation is the delay in tax refunds, which has tied up crucial liquidity for textile manufacturers. According to the All Pakistan Textile Mills Association (APTMA), the government owes the industry approximately PKR 250 billion (0 million) in tax refunds.

This financial strain has left many businesses struggling to maintain operations and fulfill international orders.

As a result, Pakistan’s share in the global textile market has shrunk, with export volumes declining by 10% in key markets like the United States and the European Union. Industry leaders are calling for immediate tax reforms and policy adjustments to restore competitiveness and ensure the survival of one of Pakistan’s most vital economic sectors.