Govt urged to restore EFS in original form
Listen to article
Pakistan Hosiery Manufacturers Association Chairman Babar Khan has emphasised that the Export Facilitation Scheme (EFS) should be restored in its true spirit and local supplies should also be included in its scope as the scheme has contributed to boosting exports not only in the value-added sector but also across several non-traditional areas.
Speaking at a press conference in Karachi on Wednesday, he noted that the process of depositing sales tax and receiving refunds was taking five to six months, which created liquidity issues. He was of the view that the spinners' lobby was demanding duties on yarn and fabric to maintain its monopoly and was misleading the government. "We make up to 70% value addition in imported cotton; therefore, we demand a long-term policy," Babar Khan said, adding that there was constant anxiety before every budget over possible policy changes.
Karachi Chamber of Commerce and Industry (KCCI) President Jawed Bilwani claimed that the All Pakistan Textile Mills Association (Aptma) chairman had acknowledged during a Planning Commission meeting that the quality of their yarn was substandard. He emphasised that imported cotton was both cheaper and of better quality, which enabled exports of non-traditional products. The EFS supported exports after the downturn caused by Covid-19 and should continue as originally envisioned, he said and mentioned that all textile composite units were supporting their stance.
In response to a question, Bilwani stated that the value-added sector had not misused the EFS and a real-time audit could be conducted, alleging that the misuse occurred in the iron and steel sector. He stressed that the scheme had opened up new export opportunities.
Bilwani questioned how exports were increasing when hundreds of spinning units had shut down. He proposed that the government should give sales tax exemption on local cotton and yarn sales as well.
Furthermore, he urged that utility tariffs for the spinning and export industries be aligned with those in the regional competitor countries. He recommended introducing a final tax regime instead of a normal one for export sectors and abolishing the advance tax collection.
Meanwhile, at a joint press conference held at the PHMA Lahore office, the hosiery manufacturers and the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) demanded urgent action to restore the EFS in its original spirit. The request comes after local yarn and fabric producers demanded the withdrawal of the scheme, citing its misuse.
The leadership jointly called on Prime Minister Shehbaz Sharif to intervene and halt policy shifts that were threatening to dismantle the EFS. They warned that the ongoing bureaucratic distortions, compounded by lobbying from the spinning sector for new tariffs, were pushing the small and medium enterprise (SME)-based apparel export industry towards serious crisis.
PHMA Zonal Chairman Abdul Hameed and PRGMEA Regional Chairman Dr Ayyazuddin said the EFS had been introduced to allow duty-free import of raw material for exporters, giving Pakistan's apparel sector a competitive edge.
"Instead of simplifying exports, the EFS has become bogged down by manual procedures and is now under threat from proposed tariff changes," said Abdul Hameed.
Ayyazuddin stressed that the SMEs, which formed the bulk of the value-added industry, could not survive under such conditions. "We operate on thin margins and short timelines. The EFS was a breakthrough for us, but now it's being reshaped to serve upstream interests. These tariffs, reportedly pushed by the spinners' lobby, protect a narrow segment at the cost of Pakistan's largest job-creating export base."
The industry leaders expressed concern over reports of potential imposition of duties on raw material like synthetic yarn, man-made fibre, technical fabric and accessories – none produced locally. "Any tariff on items under HS Chapters 54, 55 and 96 is unacceptable," said Hameed. "These are essential production inputs and taxing them means taxing exports at the very beginning." Speaking virtually, former PRGMEA chairman Ijaz Khokhar said the entire value chain had welcomed the EFS as a much-needed correction in policy. "But distortions are creeping in. The original vision of a seamless, transparent system is being hijacked," he said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
a day ago
- Business Recorder
No price tag yet: govt denies $100mn valuation for Roosevelt Hotel
The Privatisation Commission of Pakistan on Saturday clarified that no base price has yet been determined for the proposed sale of the iconic Roosevelt Hotel in New York, refuting recent media reports claiming a $100 million valuation. 'The Privatisation Commission has noticed a misleading news report appearing on 27th June 2025 in certain news media outlets asserting that Pakistan has set $100 million as base price for the sale of Roosevelt Hotel. 'It is clarified that no base price has yet been determined for Roosevelt Hotel, New York's privatisation, which can only be set at the time of bidding,' read the statement. The commission highlighted that the report misquotes Adviser to the Prime Minister on Privatisation, Muhammad Ali, who had referred to an estimated initial partial payment to be made by the successful party on signing the agreement, expected during the current fiscal year. 'The base price and timing for realisation of total proceeds from the privatisation of Roosevelt Hotel will be based on transaction structure and final terms of the agreement approved by the government,' it said, with the finalisation of the transaction structure expected to be taken up in the next CCOP meeting. Last month, Defence Minister Khawaja Asif told the National Assembly that the government is exploring a joint venture to operate the Roosevelt Hotel, aiming for long-term economic benefits rather than selling the asset outright. Describing the nearly century-old 19-story hotel as 'a strategic gem,' Asif praised its prime Manhattan location and stressed the government's intent to retain ownership. 'Selling might patch a short-term fiscal wound,' he said, 'but a joint venture ensures Pakistan keeps a foot on that lucrative property while raking in steady profits.' The Roosevelt Hotel has long been viewed as Pakistan's prized overseas asset, with repeated calls over the years to sell it for quick cash. The landmark hotel closed in 2020 after sustaining massive financial losses associated with the COVID-19 pandemic. It became operational in 2023 as a shelter for asylum seekers after the Pakistani government inked a three-year $220 million lease agreement with the New York City government to operate the Roosevelt Hotel. In February 2024, the government signed a Financial Advisory Services Agreement (FASA) with a consortium led by Jones Lang La Salle Americas Inc (JLL) for the joint venture development of the Roosevelt Hotel. In November 2024, it was learnt that Qatar had explored partnering with Pakistan in managing the Roosevelt Hotel. The hotel, which opened in 1924, was named after President Theodore Roosevelt. It is located next to the Grand Central Terminal, the city's central train terminal.
Express Tribune
a day ago
- Express Tribune
Pakistan, WB boost ties with $40b framework
Listen to article Federal Minister for Economic Affairs, Ahad Khan Cheema, held high-level meetings with World Bank leadership in Washington, marking a major step in advancing the country's development partnership with the global financial institution. In meetings with Anna Bjerde, Managing Director for Operations, and Martin Raiser, South Asia Regional Vice President, Cheema praised the strengthened collaboration between Pakistan and the World Bank over the past year. This partnership has culminated in the development of the Country Partnership Framework (CPF) 2026-2035 — a ten-year strategy backed by a $40 billion commitment from the World Bank. Cheema thanked the World Bank for its continued support, particularly during crises such as the COVID-19 pandemic and the 2022 floods. "As our largest development partner, the World Bank has played an indispensable role in Pakistan's socio-economic progress and improving the lives of our citizens," he stated, while appreciating the leadership of Bjerde and Raiser.
Express Tribune
a day ago
- Express Tribune
'Gas price hike will hit exports'
Listen to article Chairman Businessmen Group (BMG) Zubair Motiwala and Karachi Chamber of Commerce and Industry (KCCI) President Muhammad Jawed Bilwani have strongly opposed the proposed gas tariff hike for industrial processes, calling it illogical and damaging for Pakistan's already struggling industrial sector. The proposal is expected to be discussed in the upcoming meeting of the Economic Coordination Committee (ECC). In a joint statement, Motiwala and Bilwani said the hike is unjustified in light of current global and domestic energy trends. They noted that Brent crude prices have declined and that the SNGPL system is already facing a surplus of imported RLNG, with 300 to 400mmcfd going unutilised due to high prices and excessive taxes. They argued that the government should focus on improving supply management instead of further burdening industry. They emphasised that although only 80 to 100 Independent Power Producers (IPPs) use process gas, more than 8,000 Small and Medium Enterprises (SMEs) rely on it. A tariff increase would cripple these SMEs, which form the backbone of Pakistan's manufacturing sector. Instead, they recommended a 20% reduction in gas tariffs to help SMEs stay afloat amid rising input costs and harsh budgetary taxes. The leaders highlighted that OGRA's recent decision on May 20, 2025, reduced SSGC's gas tariff by Rs103.95 per MMBtu to Rs1,658.56, reflecting falling global fuel prices. They questioned how a hike for industrial users could be justified when regulatory bodies themselves recognised falling costs. OGRA also set a revised tariff of Rs1,895.25 per MMBtu for SNGPL, which remains below the proposed rate. Petitioners during OGRA's hearings also flagged inflated RLNG diversion costs and unrealistic Brent crude pricing assumptions that distort true gas pricing. Motiwala and Bilwani warned that raising gas tariffs would worsen inflation, increase unemployment, and discourage local and foreign investment. Industry, already hit by electricity costs, currency instability, and shrinking demand, cannot absorb further shocks. They called on the ECC to immediately withdraw the proposal and conduct a transparent review of gas pricing, aligning it with OGRA's findings and global trends. "Burdening industry to offset inefficiencies elsewhere is unacceptable," they said. "Support for industry is essential for true economic recovery."
