Textile council welcomes export measures, seeks tax certainty in budget

The Pakistan Textile Council (PTC) has welcomed key business- and export-oriented measures announced in the Finance Bill 2026-27, describing the budget as a positive step toward strengthening investment confidence, improving competitiveness and supporting export-led economic growth.

In separate letters addressed to Finance Minister Senator Muhammad Aurangzeb and Minister of State for Finance Bilal Azhar Kayani, PTC Chairman Fawad Anwar praised the government's efforts to introduce reforms aimed at creating a more business-friendly environment while maintaining fiscal discipline.

The council welcomed the restructuring of income tax slabs for salaried individuals, saying the measure would increase disposable incomes, stimulate domestic demand and strengthen the workforce that supports Pakistan’s export sector.

PTC also praised the rationalization of the super tax for companies earning up to PKR 500 million, calling it significant relief for the productive corporate sector that would encourage reinvestment and business expansion.

The council particularly welcomed the government’s commitment to abolish the super tax on exporters, describing the move as a landmark signal for investors and exporters. It said the measure would improve investor confidence, lower the effective tax burden on export industries and align Pakistan’s export policies more closely with those of competing regional economies.

PTC also welcomed the reduction in the combined levy on export proceeds from 2% to 1.25%, describing it as an important step to ease cash-flow pressures on exporters and improve liquidity across the sector.

While endorsing the overall direction of the budget, the council proposed two additional measures to further strengthen Pakistan’s export competitiveness.

PTC urged the government to consider treating the reduced 1.25% turnover tax as a full and final discharge of income tax liability for exporters, arguing that such a regime would provide certainty, reduce disputes and encourage fresh investment.

As an alternative, the council suggested reducing the corporate income tax rate on export income to 15% if the proposed final-tax treatment is not immediately feasible. It said such a rate would bring Pakistan closer to regional competitors, including Bangladesh and Sri Lanka, and help attract export-oriented investment.

Anwar said the Finance Bill 2026-27 reflects the government’s commitment to export-led growth and economic stability, adding that the proposed refinements would ensure the intended relief reaches exporters more effectively and supports the country’s long-term export expansion objectives.