By Moaaz Manzoor

The Pakistan Textile Council (PTC) has welcomed the export-focused measures announced in the Finance Bill 2026-27, saying the budget reflects the government's commitment to strengthening investment, boosting competitiveness and promoting export-led growth. In letters sent to Finance Minister Senator Muhammad Aurangzeb and Minister of State for Finance Bilal Azhar Kayani, PTC Chairman Fawad Anwar appreciated the government's efforts to balance economic growth objectives with fiscal discipline and to introduce reforms to improve the business environment.

He praised the restructuring of income tax slabs for salaried individuals, noting that higher disposable incomes could bolster domestic demand and strengthen the workforce in Pakistan's export industries. Mr Anwar also welcomed the rationalisation of the super tax for companies with taxable income of up to Rs500 million, describing the measure as a positive step for the production sector. He said the relief would support business expansion, encourage reinvestment and improve investor confidence.

He highlighted the government's decision to abolish the super tax on exporters, saying the move would reduce the tax burden on export-oriented businesses, improve competitiveness and send a positive signal to both local and foreign investors. Mr Anwar further appreciated the reduction in the combined levy on export proceeds from 2% to 1.25%, saying the measure would ease liquidity constraints and improve cash flows for exporters operating in an increasingly competitive global market.

While expressing support for the overall direction of the budget, the PTC chairman proposed additional measures to maximise the benefits of the government's export agenda. He urged policymakers to consider treating the reduced 1.25% turnover tax as a full and final discharge of income tax liability for exporters. He argued that such a framework would simplify compliance, reduce disputes and provide businesses with greater certainty for long-term planning and investment.

As an alternative, the PTC chairman proposed reducing the corporate income tax rate on export income to 15% if a final tax regime cannot be implemented immediately. He noted that a lower rate would bring Pakistan's tax structure closer to that of regional competitors such as Bangladesh and Sri Lanka, thereby attracting export-oriented investment. Anwar said the Finance Bill 2026-27 demonstrates the government's recognition of the export sector's role in economic growth and foreign exchange earnings.

He added that targeted refinements to the tax regime would further strengthen the sector's ability to expand exports, attract investment and contribute to sustainable economic development. The textile industry remains Pakistan's largest export sector and a key source of employment and foreign exchange. Industry representatives believe that a predictable and competitive tax framework will be essential for maintaining export momentum and supporting the country's broader economic objectives in the years ahead.

Credit: INP-WealthPk