Karachi, June 22, 2025 – The Pakistan Yarn Merchants Association (PYMA) has called on the federal government to urgently address anomalies in the duty structure on yarn as outlined in the Budget 2025-26.
PYMA Chairman Muhammad Saqib Goodluck emphasized that the current policies are creating distortions in the market, affecting the competitiveness of the textile sector, especially for small and medium enterprises (SMEs).
In a detailed representation to the government and the Federal Budget Anomaly Committee, PYMA highlighted multiple concerns over discrepancies in the treatment of industrial and commercial yarn imports. According to the PYMA Chairman, commercial yarn imports are taxed at a significantly higher rate of 3.5% income tax compared to just 1% for industrial imports. This creates a total duty differential of about 5.5%, including value-added sales tax—an imbalance that disrupts fair competition and imposes unnecessary administrative burdens.
PYMA also expressed concern over the imposition of additional regulatory duties on Draw Textured Yarn (DTY), classified under HS Code: 5402.3300. As DTY is already subject to an average anti-dumping duty of 13.84% imposed by the National Tariff Commission (NTC), PYMA deems any further duty as unjustified. The association strongly recommended the regulatory duty on DTY be brought down to 0% to avoid hampering the industry’s performance.
Addressing the broader duty structure, PYMA pointed out the inconsistency in customs duties across the polyester textile value chain. While raw materials like polyester filament yarn (PFY) and grey fabrics attract a 10% duty, finished products are charged 15%, resulting in a cascading effect. PYMA urged that this structure be rationalized to support core sectors like weaving, knitting, twisting, and finishing—many of which are SME-driven.
Further, PYMA Vice Chairman Altaf Haroon highlighted the disparity in customs duties for Partially Oriented Yarn (POY – HS Code: 5402.4600) and Fully Drawn Yarn (FDY – HS Code: 5402.4700). These yarn types, which are not manufactured locally, still face higher duties compared to fibre, whose customs duty was recently reduced from 7% to 5%. PYMA recommended aligning POY and FDY duties with fibre to promote fairness and consistency.
PYMA reaffirmed its readiness to collaborate with the government, stressing that resolving these yarn duty anomalies is vital to ensuring a transparent, stable, and globally competitive textile industry.