The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has opposed imposition of 18 per cent sales tax on exporters operating under the Export Facilitation Scheme (EFS). Such a regressive tax would cripple the garment export sector, stifle crucial cash flow, and undermine Pakistan's ability to expand its presence in the global apparel market, the association warned.

Dr Ayyazuddin, Regional Chairman, PRGMEA, stated, more than luxury, EFS is a necessity for export-led growth. Being entirely export-oriented and at the tail end of the textile value chain, the garment industry is already suffering from delayed refunds and multiple taxes, he added.

Exporters pay sales tax upfront and wait for months to receive refunds; they often face a three-month delay, which severely hampers their cash flow and operational capacity, Ayyazuddin explained.

He emphasized, imposing additional taxes would be disastrous, especially since the garment industry plays a critical role as Pakistan's largest source of employment and foreign exchange, particularly at a time when global trade shifts are creating new opportunities.

Any restrictions or levies on imported inputs, which are essential given that 79 per cent of the global textile market uses synthetic filament yarn, would prompt international buyers to redirect orders to Pakistan's competitors like Bangladesh, Vietnam, or Cambodia, he warned.

Meanwhile, the Pakistan Hosiery Manufacturers Association (PHMA) is urging the government to scrap the outdated peak and off-peak electricity tariff structure.

In a letter sent to top government officials, the PHMA highlighted that the peak-hour surcharge policy was introduced to curb consumption during severe power shortages. However, the energy landscape has significantly changed, with Pakistan now having surplus generation capacity and even exploring electricity exports.

Under these circumstances, the rationale for maintaining the peak and off-peak tariff differential has completely vanished, PHMA argued

Abdul Hameed, PHMA Zonal Chairman, noted, exporters in the hosiery and textile sector, who operate 24/7 to meet global deadlines, are struggling with competitiveness challenges due to high electricity charges during peak hours. Fluctuating tariffs force industries to alter production schedules, reducing efficiency and increasing overall costs, which weakens Pakistan's international standing.