Documented industry: LCCI, PFMA highlight negative impact

LAHORE: The Pakistan Footwear Manufacturers Association (PFMA) has expressed serious concern over the proposal in the Finance Bill 2026 to place the footwear sector under the Third Schedule, stating that the move may create serious practical difficulties for the industry, discourage documentation efforts, and place additional pressure on one of Pakistan’s most labour-intensive manufacturing sectors.

Addressing a press conference at the Lahore Chamber of Commerce and Industry (LCCI), LCCI President Faheem-ur-Rehman Saigol said the footwear sector is an extremely important part of the economy and its input in industrial growth and employment generation is significant. Chairman PFMA Rashad Islam, former chairman Mansoor Ahsan Sheikh, and Executive Committee Member Ahmed Hussain were present.

The LCCI President further said that placing the sector under the Third Schedule would have serious negative consequences. “Footwear is an extremely important sector, and its input in the economy is very high. Including it in the Third Schedule will have negative effects,” he said. “No consultation was held with stakeholders while making this policy. Documented businesses are being disturbed, while the undocumented economy is being encouraged,” he said. He urged the government to immediately reconsider the proposal.

Chairman PFMA Rashad Islam said the footwear industry fully supports documentation, taxation, and national revenue objectives, but emphasized that taxation policy must remain practical, rational, and aligned with industrial realities.

He said the sector is not demanding exemptions but a fair and workable system that does not undermine compliant businesses. “The footwear industry supports documentation and national revenue generation. However, placing the sector under the Third Schedule may unintentionally push business back towards the undocumented economy instead of expanding the tax base,” he said.

The PFMA reiterated its readiness to cooperate with the government in strengthening POS integration, digital traceability, and documentation, but stressed that focus should remain on bringing the undocumented sector into the tax net rather than burdening compliant businesses.

The PFMA Chairman warned that nearly 75 percent of the sector remains undocumented, making it difficult for compliant businesses to compete under increased regulatory pressure. He urged the prime minister, finance minister, FBR authorities to reconsider the proposal in consultation with stakeholders.

Copyright Business Recorder, 2026