Islamabad, (Parliament Times) : The Senate Standing Committee on Finance and Revenue, chaired by Senator Saleem Mandviwalla, convened today to initiate consultations with associations across the country in preparation for the upcoming budget. The meeting centered on the challenges and recommendations presented by major sectors, including textiles, poultry, dairy, steel, property development, and consumer goods.
Representatives from the towel manufacturing sector shared that their exports are nearing $2 billion, contributing 18% to the country’s total towel exports. However, they expressed serious concerns over delays in sales tax refunds, which are often processed after six months. They urged the revival of SRO 112 and pointed out the misuse of the Export Facilitation Scheme (EFS). The sector also requested a subsidy on electricity bills for SMEs and proposed the removal of the 2% normal tax currently imposed.
Moreover, Chairman of the All Pakistan Textile Mills Association (APTMA), Kamran Arshad, warned that textile exports have remained stagnant for two years. He criticized the EFS scheme for pushing the industry toward collapse, highlighting issues such as the imposition of 18% sales tax on local cotton and the duty-free import of foreign cotton. APTMA recommended placing yarn and fabric on the negative list, fixing electricity rates at 9 cents per unit, and reducing the advance tax rate from 2.5% to 1%. The association reported that 120 spinning mills and 800 ginning factories have already shut down, and that textile exports have remained stagnant at 16.5% and 16.7% over the past two years.
Furthermore, the Poultry Association demanded the removal of sales tax on chicken, noting that while other meats are exempt, chicken is taxed when sold under branded packaging. They argued that this inconsistency is unfair, particularly since poultry feed is subject to over ten types of taxes, rendering poultry farming increasingly risky.
Representatives from the Dairy Association requested a reduction in sales tax on dairy products, especially milk, from 18% to 5%. They emphasized that milk is typically not taxed worldwide and urged the government to align with international best practices. In response, the FBR Chairman asked for concrete proposals to offset the revenue shortfall that would result from such a tax cut.
Similarly, the Fruit Juices Council advocated for a reduction in Federal Excise Duty (FED) from 20% to 15%, citing a 40% decline in sales over the past two years due to the current tax structure.
Additionally,the Pakistan Builders and Developers Association (ABAD) proposed the elimination of advance income tax on property purchases and investments. They also called for the reinstatement of a simplified tax collection system based on covered area and requested the repeal of Section 7E, stating that plots are a basic need for ordinary citizens.
However, Constructors Association of Pakistan, meanwhile, sought a reduction in the withholding tax rate from 8% to 1.5% or 2%, contending that the current rate creates serious constraints for the sector’s stability. They further demanded the removal of the term “withholding agent” for contractors, arguing that construction is a mobile industry requiring frequent cash payments to small vendors and laborers across various regions, making it impractical to fulfill the obligations of withholding agents.
The Steel Melters Association raised concerns over tax evasion in the steel sector, which they estimated at Rs. 70–80 billion annually. They highlighted rampant smuggling and the circulation of 3–4 million tons of unregistered steel scrap in Karachi, including imports from Iran. They demanded an end to the FBR’s practice of fixing steel prices, claiming that it distorts market dynamics and undermines fair competition. The committee chairman assured that the matter will be reviewed thoroughly.
In addition, the Gem and Jewelry Association called for an exemption from import duties on technology and demanded that asset declarations for gem and jewelry manufacturers be made in gold, rather than in cash as currently required.
Senator Mandviwalla appreciated the stakeholders for their detailed feedback and assured them that their concerns would be taken into account during the budget-making process. He reaffirmed the committee’s commitment to fostering a business-friendly environment while ensuring transparency, accountability, and sustainable revenue generation.
The meeting was attended by Senators Anusha Rahman Ahmad Khan, Syed Faisal Ali Subzwari, Mohammad Abdul Qadir, and representatives from the Towel Manufacturers Association, Dairy Association, Fruit Juice Council, Poultry Association, Steel Melters Association, Gems and Jewelry Association, Denim Manufacturers, and the All Pakistan Steel Mills Association.