Pakistan abolishes export development surcharge, exporters welcome move

Pakistan Prime Minister Shehbaz Sharif has ordered the abolition of the export development surcharge, a levy collected at 0.25% of total export proceeds, industry representatives informed Nukta on Monday.

Javed Bilwani, chief coordinator of the Pakistan Hosiery Manufacturers Association, told Nukta that the decision, which was made during a meeting between the prime minister and textile millers, marks “a good gesture for exporters of Pakistan” and reflects support for the struggling sector.

Separately, the prime minister has also directed to immediately reform and restructure the Export Development Fund, making it a private-led entity registered under section 42 of Companies Act 2017.

According to Bilwani, nearly PKR 50 billion has been accumulated in the Export Development Fund as a result of the surcharge. PM Shehbaz also directed that funds accumulated in the EDF no longer be transferred to the Trade Development Authority of Pakistan and other Public Sector Development Program projects.

Bilwani said the decision aligns with efforts to improve ease of doing business, but warned that exporters continue to face major challenges, including high energy tariffs compared with regional competitors.

“It’s a good direction, but more has to be done,” Bilwani said.

Industry concerns have persisted over the sector’s viability. Last year, the All Pakistan Textile Mills Association reported that around 150 textile units had shut down due to the deteriorating business environment. The textile sector remains the country’s largest industrial employer, and industry leaders warn that continued closures could further accelerate unemployment.