SRO 1395(I)2025 is not the end of the EFS. It is certainly the end of the beginning of the end of the EFS. SRO 1395(I)25, July 29, 2025, excludes “Raw cotton, yarns, and fabrics” from the purview of the EFS. Imported cottons, yarns, and fabrics will now be at par with local produce and attract a “refundable” 18 percent GST.

The Public Choice Theory provides a framework about how private, material, bureaucratic and even ideological interests, of bureaucrats, politicians etc., work their way into full-blown public policies resulting in stunting and killing public goods and policies-like the inevitable demise of the EFS.

EFS, July 2021 was launched, recognizing that the domestic fiscal constraints must not burden exporters as they compete internationally with competitors with no such baggage.

The EFS intended to immunize exporters from the chronically “kadak”, cash-deficient FBR’s penchant for meeting its revenue requirements by illegally denying refunds to EFS registered exporters. EFS meant no pay-ins, no refunds. Exporters and few in Islamabad were happy. However, many in Islamabad had different thoughts.

FBR, like all, would like to retain control over the refund pipeline. EFS had blown that ‘Nordstream 2’ of coveted refunds which FBR would tap during lean days when these funds could buy the Republic a day or more. Via denial and delay of refunds,........

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