Pakistan’s ‘White Gold’ fades into ghost crop as government eyes belated tax relief

Amid a worsening cotton crisis, Pakistan’s government is belatedly considering tax relief measures moves many say fail to address the core problem. Under pressure from the Pakistan Cotton Ginners Association and the All Pakistan Textile Mills Association, the Ministry of National Food Security and Research has endorsed proposals to either remove the 18 per cent sales tax on domestic cotton and byproducts or apply the same rate to imports of cotton, yarn, and grey cloth.

The proposals, now forwarded to Prime Minister Shehbaz Sharif, follow a media campaign by industry bodies seeking urgent intervention. But critics argue that these stopgap measures are aimed at propping up the textile industry, not rescuing the farmers whose livelihoods depend on cotton.

Pakistan’s cotton sector, once the backbone of rural and industrial growth, has shrunk alarmingly. Only three ginning factories are currently running in Punjab, with limited activity expected in Sindh. Industry insiders warn that processing units may operate at less than half capacity this season.

This year’s cotton yield has dropped over 30 per cent, the sharpest fall among Pakistan’s five major crops. Without meaningful action targeting cultivation challenges, experts warn, tax adjustments alone will do little to revive the country’s cotton economy.