Islamabad: In the federal budget for the upcoming fiscal year 2025-26, it is likely to provide concessions in duties and taxes on import of raw materials used in the manufacture of textile products to make the textile industry strong and active.
In addition, to protect the local textile and fabric industry, the customs duty and additional customs duty rates on the import of polyester yarn, bleached and unbleached grey fabrics and dyed and printed fabrics are likely to be increased.
The customs duty rate on imports is likely to be gradually increased from 11 percent to 16 percent and from 16 percent to 20 percent, while the additional customs duty rate is likely to be increased from 2 percent to 4 percent.
According to sources, the Federal Board of Revenue (FBR) has started reviewing the budget proposals received from the Karachi Chamber of Commerce and Industry for the upcoming fiscal year 2025-26.
Sources say that in the upcoming fiscal year’s federal budget, it has been proposed to reduce the two percent regulatory duty imposed on the import of polyester spun yarn, a basic raw material used in the textile chain, to zero in order to strengthen the local textile industry and reduce production costs.
The import of this raw material used in the textile sector is currently subject to 11 percent customs duty and 2 percent regulatory duty, which is making it difficult for textile manufacturers and exporters to compete with the prices prevailing in the global market. If the government reduces the regulatory duty rate on the import of this basic raw material to zero, this step will reduce the prices of textile products and provide convenience to the common man.
Along with this, the cost of production will be reduced and the exports of textile products will be encouraged and it will be easier for textile products to compete with the prevailing prices in the world market and the removal of two percent regulatory duty will provide great relief to the textile industry. This industry provides employment to millions of people and this measure will also reduce the additional burden on the netting and weaving industry.
According to the document, in order to protect and encourage local fabric manufacturing, it has been proposed to increase the rate of customs duty on the import of bleached and unbleached grey fabrics from 11 percent to 16 percent. Similarly, it has been proposed to increase the rate of additional customs duty from two percent to four percent.
This measure will make it easier for Pakistani fabrics to compete with prices in the world market and will also reduce the prices of goods for the general public.
Similarly, to protect the local dyed and printed fabrics manufacturing industry, it has been proposed to increase the customs duty rate on the import of dyed and printed fabrics from 16 percent to 20 percent in the federal budget for the next fiscal year and to maintain the 4 percent additional customs duty on the import of these products in the budget for the next fiscal year.
In this regard, FBR officials say that the budget proposals received from the Karachi Chamber of Commerce and Industry are being reviewed. In addition, budget proposals are being received from the Chambers of Commerce and Industries, which are being reviewed and the feasible proposals after consultation with these stakeholders will be included in the budget.
