APTMA warns of industry collapse

The All Pakistan Textile Mills Association (APTMA), Southern Region, has sounded the alarm over the misuse of the Export Facilitation Scheme (EFS), warning of widespread closures and mass unemployment in the domestic textile industry. In a statement issued Monday, APTMA highlighted how the scheme, which exempts imported cotton and blended yarns from sales tax and duties, is being exploited. Instead of being used solely for export manufacturing, large volumes of these imported yarns are being sold in the domestic market. This has created an uneven playing field, pushing local yarn manufacturers into financial ruin and causing the closure of over 40% of spinning mills. "Unscrupulous elements are evading taxes under the guise of exports, leading to massive revenue losses for the government and crippling the domestic industry," APTMA said. The misuse has resulted in the loss of hundreds of thousands of jobs, further compounding the industry's woes. APTMA criticised the withdrawal of zero-rating on local supplies for export manufacturing under the Finance Act 2024, calling it counterproductive. "While intended to enhance revenue, it has instead triggered a decline in business activity, further squeezing government revenue collection," the statement noted.