The Federal Board of Revenue (FBR) has taken a significant step to boost the textile industry by withdrawing the five percent regulatory duty on the import of cotton yarn.
The FBR issued a Statutory Regulatory Order (SRO 1352(I)/2020) dated December 23, 2020, amending the earlier SRO 680(I)/2019 dated June 28, 2019, to remove the regulatory duty on the import of cotton yarn until June 30, 2021.
The move comes after the Economic Coordination Committee (ECC) approved the elimination of the regulatory duty on the import of cotton yarn in a meeting held on December 2, 2020. The decision was made in response to a proposal presented by the Ministry of Commerce, suggesting the removal of the 5 percent regulatory duty on cotton yarn imports until June 30, 2021. The proposal aimed to foster value-added exports and enhance the competitiveness of the textile sector.
The decision to withdraw the regulatory duty on cotton yarn imports is expected to have a positive impact on the textile industry, which plays a pivotal role in Pakistan’s economy. Cotton yarn is a crucial raw material for the textile sector, and the elimination of this duty is seen as a strategic move to support the industry, particularly during a challenging economic climate.
The finance minister, after a detailed discussion during the ECC meeting, gave approval for the removal of the regulatory duty on cotton yarn imports. This decision is aligned with the government’s broader objective of promoting value-added exports and encouraging economic growth through targeted policy measures.
The withdrawal of the regulatory duty is not only anticipated to benefit domestic textile manufacturers but also to make imported cotton yarn more accessible and cost-effective. This, in turn, is expected to enhance the competitiveness of Pakistani textile products in the international market.
The textile industry, being a major contributor to Pakistan’s export earnings, has faced various challenges, including the impact of the global COVID-19 pandemic. The government’s decision to remove the regulatory duty reflects a commitment to addressing the concerns of the industry and providing timely support to facilitate its recovery and growth.
Stakeholders in the textile sector have welcomed the decision, considering it a positive development that will contribute to the overall revival of the industry. As the regulatory duty is withdrawn until June 30, 2021, the textile sector now has an opportunity to leverage this period for increased production and competitiveness in the global market.
The FBR’s withdrawal of the 5 percent regulatory duty on cotton yarn imports demonstrates a proactive approach by the government to bolster the textile industry and promote economic resilience. This strategic move aligns with the broader vision of enhancing Pakistan’s export competitiveness and fostering sustainable economic development.