APTMA welcomes Pakistan's 18% sales tax on imported cotton yarn, seeks broader reforms

The All Pakistan Textile Mills Association (APTMA) has welcomed the federal government's decision to impose an 18 per cent sales tax on the import of cotton yarn, calling it a much-needed step to level the playing field for local manufacturers. In a statement issued after the federal budget announcement, APTMA chairman Kamran Arshad appreciated the move, stating it eliminates a key contradiction in the Export Facilitation Scheme (EFS). Previously, imported raw materials were exempt from sales tax while local materials attracted an 18 per cent tax, creating a disparity that hurt domestic producers.

Arshad urged the government to fully address remaining loopholes in the EFS and implement uniform taxation across the yarn and fabric value chain. He stressed that applying the same 18 per cent sales tax on both local and imported materials would support the struggling weaving sector.

APTMA also recommended including cotton yarn and fabric in the negative import list to protect the domestic industry. It further called for a 5 per cent customs duty on yarn and 11 per cent on fabric imports. Highlighting rising costs, Arshad noted that local polycotton and polyester prices have surged by 35 per cent and urged the government to remove the 18 per cent sales tax on cottonseed and cotton cake.