For the first time in Pakistani history, exporters have been subjected to a taxation that is 300 percent greater than that of domestic firms.
In its budget, the federal government aided local SMEs while neglecting, as is customary, export-oriented SMEs.
The value-added textile sector had requested that the federal government cut income tax and sales tax rates for exporters in its budget plans, but in vain. There are no taxes on export firms worldwide, and when taxes are charged on exports, the rate is lower than the rate levied on domestic businesses.
The Pakistan Weaving Manufacturers Association has asked that the No Payment No Refund System be reinstated. The imposition of a 17 percent GST has rendered textile exporters financially unviable, as their valuable liquidity has become held up for no apparent reason. They also raised worries and reservations regarding the Finance Minister’s commitment to suspend the EDF surcharge, which is deducted at a rate of 0.25 percent of export value, effective immediately.
