Islamabad, May 22, 2025 – In a major policy move ahead of the federal budget 2025–26, the Pakistan Textile Council (PTC) has submitted a sweeping set of proposals aimed at reviving Pakistan’s export economy, improving ease of doing business, and reducing reliance on IMF programmes.
The Pakistan Textile Council, which represents key stakeholders from the country’s largest export sector, has recommended reforms to make the textile industry more globally competitive. In a detailed report submitted to the Prime Minister, Finance Minister, and FBR, the Council urged the government to reintroduce the Regionally Competitive Energy Tariff (RCET) for gas and electricity and freeze these tariffs for three years. The Council emphasized that energy cost is one of the biggest burdens on the textile sector.
To improve efficiency, the Council suggested abolishing the 0.25% Export Development Fund surcharge and eliminating cross-subsidies in electricity. It also proposed establishing industrial zones with one-window operations to support small and medium enterprises (SMEs) and attract new investments.
The Pakistan Textile Council also raised concerns about Pakistan’s high corporate tax rate of 29%, which is above the regional average. It called for gradually reducing this rate to 20% to encourage formal sector growth. The Council also proposed reintroducing the Final Tax Regime (FTR) for exporters and abolishing super tax on high earners to improve investor confidence.
On the labour side, the Council recommended redefining the concept of minimum wage as a “fair wage” and suggested capping future wage increases at 5% due to low inflation. It further called for flexible overtime policies and a rationalisation of social security contributions by merging departments like EOBI and the Workers’ Welfare Fund into a single-window platform.
To enhance export performance, the Council urged restoring key incentives from the previous Textile Policy, such as Duty Drawback of Taxes (DDT) and the Drawback of Local Taxes and Levies (DLTL). It also demanded urgent clearance of all pending tax refund claims to ease the cash flow crisis faced by exporters.
The Pakistan Textile Council made a strong appeal for strengthening the Export Finance Scheme (EFS) and Long-Term Financing Facility (LTFF), proposing that these should also cover infrastructure development. The Council also recommended interest-free loans for green technologies, as well as support for wastewater treatment and effluent management.
In a forward-looking suggestion, the Council called for expanding tax incentives for women-led businesses, proposing that even businesses with partial female ownership and workforce should be rewarded.
The bold and comprehensive proposals by the Pakistan Textile Council reflect the urgent need for policy shifts to revitalise Pakistan’s textile sector — the backbone of the country’s exports — and position the economy for sustainable, inclusive growth.