ISLAMABAD: Pakistan’s export-oriented textile industry has raised serious concerns over the Federal Board of Revenue’s (FBR) move to demand the immediate payment of the super tax, warning that the step could trigger widespread mill closures and deepen the country’s economic troubles.
In a formal letter written on Tuesday to FBR Chairperson Rashid Mahmood Langrial, the All Pakistan Textile Mills Association (Aptma) said that field formations have started issuing notices for the recovery of the entire outstanding super tax following a recent judgment of the Federal Constitutional Court (FCC).
Aptma cautioned that the industry is already under severe financial stress due to a sharp slowdown in export orders, high energy tariffs, double-digit interest rates and excessive taxation. Paying the tax in a single lump sum, the association said, is “neither practical nor workable” and would cripple day-to-day operations across the textile value chain.
The immediate payment of the tax amounting to hundreds of billions of rupees, the association warned, “will disrupt cash flows to such an extent that many mills may be forced to shut down,” adding that closures would lead to job losses, reduced exports and negative spillovers for the national economy.
Aptma also pointed out that exporters remained under the final tax regime (FTR) up to the tax year 2024, and therefore ‘super tax’ under Section 4C should be computed on the basis of imputable income. It stressed that imputable income must be calculated through a reverse-working mechanism corresponding to tax already paid under FTR, rather than arbitrary assessments.
Expressing concern over differing interpretations by tax officials, Aptma urged the FBR to hold immediate consultations with industry stakeholders and issue a generic clarification on the application of super tax for exporters. Until such clarity is provided, the association requested suspension of recovery proceedings.
The textile body further proposed that super tax liabilities be adjusted against long-pending income tax, sales tax, and other refund claims, including TUF and DLTL. Any remaining amount, it suggested, should be allowed to be paid in easy, business-friendly instalments.
Aptma warned that the aggressive recovery of the super tax would undermine recent relief measures announced by the prime minister to support industrial activity, making it difficult for businesses to even meet basic obligations such as salaries and utility bills. The association reiterated its willingness to engage with the FBR to find a workable solution that safeguards revenue objectives without jeopardising Pakistan’s largest export industry.
