Textile exporters warn against changes in EFS

FAISALABAD: The Pakistan Textile Exporters Association (PTEA) issued a warning on Tuesday against any alterations to the Export Facilitation Scheme (EFS), stating that it could severely impact export growth.

Patron-in-Chief PTEA Khurram Mukhtar expressed concerns about potential disruptions to the EFS, stressing the sector’s significance to Pakistan’s economy. He pointed out that textile exports had dropped from $19.3 billion in FY 2022 to $16.6 billion in FY 2024, reflecting a 13.83% decline due to inconsistent policies, rising production costs, exchange rate fluctuations, and economic challenges.

However, recent government initiatives have helped regain momentum, with strong growth recorded in the past few months: 13% in August, 17.92% in September, 13.11% in October, 10.81% in November, and 5.5% in December.

Chairman of PTEA, Sohail Pasha, emphasized that the EFS plays a crucial role in facilitating exporters by allowing duty- and tax-free imports of raw materials for re-export, which is essential to remain competitive with countries like Bangladesh, Turkey, Vietnam, and Cambodia. He criticized the demands from spinners to impose GST on EFS imports, calling it unjustified as it would tie up significant capital in refunds, hindering growth. Pasha stressed the importance of policy consistency and a cohesive export strategy aligned with energy, taxation, and industrial policies for sustained growth. He urged the government to maintain the EFS in its current form, warning that policy changes could have severe consequences for the economy.

FCSTI PROPOSES MEASURES TO REVITALISE HOUSING SECTOR: Ch Shafiq Anjum, President of the Faisalabad Chamber of Small Traders and Industry (FCSTI), has proposed measures to revitalize the housing sector and unlock a $100 billion investment potential while preventing capital flight.

He highlighted the critical role of the construction and housing sector, which supports 72 industrial sectors and generates extensive employment opportunities, calling it the backbone of Pakistan’s economy. To unlock the sector’s potential, he proposed reducing withholding tax on property transactions to 1%, declaring the first property purchase tax-free to promote home ownership, eliminating the 3% Federal Excise Duty (FED), which he termed legally unenforceable in provinces, removing the “deemed income” concept that has hindered growth in the sector, and introducing a 10-year fixed-rate mortgage tied to PIB bond yields to make housing more affordable. Ch Shafiq also urged the government to encourage banks to classify construction as a priority sector, emphasizing that such measures would stimulate broader economic growth and contribute to a robust recovery.

SIFC SEEKS COLLECTIVE EFFORTS TO BOOST EXPORTS: The Faisalabad Chamber of Commerce and Industry (FCCI) is actively working to address investors’ concerns, but the business community of Pakistan must also make collective efforts to enhance exports based on reliable business data, said Jamil Ahmad Qureshi, Secretary of the Special Investment Facilitation Council (SIFC).

During a meeting with Rehan Naseem Bharara, President of FCCI, he mentioned that federal, provincial governments and state institutions are collaborating to create an enabling environment for local and foreign investors. “Our efforts and strategy are yielding positive results,” he said, urging President FCCI to identify obstacles to new investment and propose viable solutions. He emphasised the importance of critically analyzing the success stories of neighbouring countries and identifying opportunities available in different sectors for Pakistan to capitalize on. Earlier, President FCCI Rehan Naseem Bharara highlighted Faisalabad’s role in national exports and stressed the importance of involving real stakeholders in policy-making.

He also invited Secretary SIFC to visit FCCI at a convenient time. Senior Vice President Qaisar Shams Gucha was also present during the meeting. Later, Secretary SIFC Jamil Ahmad and President FCCI Rehan Naseem Bharara exchanged shields representing their respective organisations.