Address discrepancies in yarn duty structure in Budget 2025-26, urges PYMA

The Pakistan Yarn Merchants Association (PYMA) has urged the federal government to immediately address discrepancies in the yarn duty structure outlined in the upcoming Budget 2025-26. Saqib Goodluck, Chairman, PYMA point out, current policies are distorting the market and hurting competitiveness of Pakistan's textile sector, particularly small and medium enterprises (SMEs).

In a proposal submitted to the government and the Federal Budget Anomaly Committee, PYMA highlighted several concerns regarding the treatment of industrial versus commercial yarn imports. Commercial yarn imports face a substantially higher income tax of 3.5 per cent, while industrial imports are taxed at just 1 per cent. This creates a total duty difference of approximately 5.5 per cent, including value-added sales tax. PYMA argues, this imbalance undermines fair competition and creates unnecessary administrative burdens.

PYMA also expressed concerns about additional regulatory duties on Draw Textured Yarn (DTY). DTY is already subject to an average anti-dumping duty of 13.84 per cent imposed by the National Tariff Commission (NTC). PYMA believes any further duty is unwarranted and strongly recommends reducing the regulatory duty on DTY to 0 per cent to avoid hindering industry performance.

Addressing the broader duty structure, PYMA pointed out an inconsistency in customs duties across the polyester textile value chain. Raw materials such as polyester filament yarn (PFY) and grey fabrics are subject to a 10 per cent duty, while finished products are charged 15 per cent. This creates a cascading effect. PYMA urged the government to rationalize this structure to better support core sectors like weaving, knitting, twisting, and finishing, many of which are SME-driven.

Furthermore, Altaf Haroon, Vice Chairman, PYMA underscored the disparity in customs duties for Partially Oriented Yarn and Fully Drawn Yarn. Even though these yarn types aren't manufactured domestically, they face higher duties compared to fiber, whose customs duty was recently cut from 7 per cent to 5 percent. PYMA recommended aligning POY and FDY duties with fiber to promote fairness and consistency.