Textile body welcomes FY27 budget measures, seeks final tax regime for exporters

The Pakistan Textile Council (PTC) has welcomed the government’s business and export-oriented measures announced in the Finance Bill 2026-27, describing them as a positive step toward boosting investment confidence, improving competitiveness and supporting export-led economic growth.

In separate letters to Finance Minister Senator Muhammad Aurangzeb and Minister of State for Finance Bilal Azhar Kayani, PTC Chairman Fawad Anwar praised the government’s efforts to introduce reforms aimed at creating a more business-friendly environment while maintaining fiscal discipline.

According to the textile body, the restructuring of income tax slabs for salaried individuals would increase disposable incomes, stimulate domestic demand and strengthen the workforce supporting Pakistan’s export sector.

The council also welcomed the rationalisation of super tax for companies earning up to Rs500 million, terming it significant relief for the productive corporate sector that could encourage reinvestment and business expansion.

PTC particularly lauded the government’s commitment to abolish super tax on exporters, calling it a landmark measure that would boost investor confidence, lower the effective tax burden on export industries and align Pakistan’s export policies more closely with competing regional economies.

The council further appreciated the reduction in the combined levy on export proceeds from 2% to 1.25%, saying the move would ease cash-flow pressures on exporters and improve liquidity across the sector.

While endorsing the overall direction of the budget, PTC proposed additional measures to further strengthen export competitiveness.

It urged the government to consider treating the reduced 1.25% turnover tax as a full and final discharge of income tax liability for exporters, arguing that such a regime would provide greater certainty, reduce disputes and encourage fresh investment.

As an alternative, the council suggested reducing the corporate income tax rate on export income to 15% if the proposed final tax treatment is not immediately feasible.

According to PTC, a lower tax rate would bring Pakistan closer to regional competitors such as Bangladesh and Sri Lanka and help attract export-oriented investment.

“Finance Bill 2026-27 reflects the government’s commitment to export-led growth and economic stability,” Anwar said, adding that the proposed refinements would help ensure that the intended relief reaches exporters more effectively and supports the country’s long-term export expansion objectives.