PTC seeks final tax status for export levy

ISLAMABAD: While welcoming the federal budget 2026-27 and terming it business-friendly, the Pakistan Textile Council (PTC) has proposed that the combined levy of 1.25 percent on exports be treated as a full and final discharge of income tax liability for exporters.

In separate letters addressed 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 introduce reforms aimed at creating a more business-conducive environment while maintaining fiscal discipline.

The council praised the restructuring of income tax slabs for salaried individuals, stating that the measure would enhance disposable incomes, stimulate domestic demand, and strengthen the workforce supporting Pakistan’s export sector.

READ ALSO: Pakistan Textile Council seeks removal of cross subsidies

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

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

Additionally, PTC appreciated the reduction in the combined levy on export proceeds from 2 percent to 1.25 percent, describing it as an important measure to ease cash flow pressures and improve liquidity across the sector.

While endorsing the overall direction of the budget, PTC proposed two supplementary measures to further strengthen Pakistan’s export competitiveness. It urged the government to consider treating the reduced 1.25 percent turnover tax as a full and final discharge of income tax liability for exporters, arguing that such a regime would provide certainty, reduce disputes, and encourage fresh investment.

As an alternative, the Council suggested reducing the corporate income tax rate on export income to 15 percent if the proposed final tax treatment is not immediately feasible. It noted that such a rate would bring Pakistan closer to regional competitors, including Bangladesh and Sri Lanka, and help attract export-oriented investment. Fawad Anwar said the Finance Bill 2026-27 reflects the government’s commitment to export-led growth and economic stability, adding that the proposed refinements would ensure that the intended relief reaches exporters more effectively and supports the country’s long-term export expansion objectives.

Copyright Business Recorder, 2026