The Export Facilitation Scheme (EFS) was introduced with the objective of fostering national exports and augmenting the inflow of foreign exchange into the country.

By facilitating the export of cotton-based products, the scheme has indeed resulted in a substantial influx of dollars, which is crucial for the economic stability of Pakistan.

However, despite the apparent benefits of the scheme, it has introduced several challenges that are adversely affecting the local cotton industry, requiring urgent attention and corrective measures.

Under the current structure of EFS, imported yarn, raw cotton, and fabric are exempted from sales tax, while domestically produced cotton, yarn, and fabric are subject to an 18 percent sales tax.

This disparity has created significant difficulties for the local textile industry, as the imposition of taxes on locally produced goods, while imported products remain tax-free, has placed an unfair burden on domestic producers.

As a result, local spinners, ginners, and the weaving sector have faced severe operational challenges, impacting their competitiveness in the market.

The consequences of this tax discrepancy are far-reaching. Ginners have reduced their purchase of seed cotton, and the weaving sector is increasingly opting for imported yarn due to its affordability and superior quality.

This has led to a direct negative impact on........

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