Textile exporters warn of disadvantages

ISLAMABAD: Leading textile and clothing exporters have warned the government that the current tax and regulatory framework disadvantages the export-oriented sector, emphasising that textile exporters are required to pay tax on every transaction, whereas domestic businesses settle their tax liabilities quarterly.

The issue, among others, arose during a meeting with Finance Minister Muhammad Aurangzeb at a time when exporters are struggling to compete with regional countries in international markets, while domestic policies have also contributed to a rise in the cost of doing business.

Exporters informed the finance minis­ter that the current taxation and regulatory framework puts them at a disadvantage compared to domestic businesses. Textile exporters are required to pay two per cent advance tax on each transaction, whereas domestic businesses pay taxes quarterly based on their deemed liability.

Additionally, a significant portion of exporters’ capital remains locked in the refund regime, creating liquidity constraints.

The exporters said the sector remains highly compliant and continues to bear high costs of doing business despite structural constraints.

They urged the government to simplify the tax regime, ensure equitable treatment........

© Dawn Business