PYMA calls for simpler textile duties

KARACHI: Chairperson of the Pakistan Yarn Merchants Association (PYMA) Muhammad Saqib Goodluck has raised concerns over the duty structure and policy ambiguities in the federal budget for the financial year 2025-26, warning that these measures are adversely affecting the textile sector, particularly small and medium-sized enterprises (SMEs).

In a formal submission to the government and the anomaly committee, the PYMA chairperson called for the urgent redressal of key issues that, he said, undermine transparency, competitiveness and the long-term viability of the domestic textile industry.

He noted that the budget lacks clear policy differentiation between commercial and industrial imports. While industrial imports are subject to a 1.0 per cent income tax, commercial imports face a significantly higher rate of 3.5 per cent. Based on PYMA’s calculations, the overall duty differential between the two categories -- including sales tax value addition -- is around 5.5 per cent. Goodluck argued that this gap is not justified, particularly in light of the administrative burden and resulting market distortions. He added that earlier consultations had created a mutual understanding that both sectors would be treated equitably.

Goodluck also highlighted that draw textured yarn (DTY) of polyester (HS Code: 5402.3300) is already subject to an average anti-dumping duty of 13.84 per cent, imposed by the National Tariff Commission (NTC) on June 17, 2025. Given this existing protection for the domestic industry, the PYMA considers any continuation or imposition of additional regulatory duties on DTY to be unjustified. The association has strongly recommended that the regulatory duty on DTY be reduced to zero.

On the issue of customs duties, the PYMA chairperson pointed to structural imbalances in the duty regime. Both raw materials such as polyester filament yarn (PFY) and grey fabrics are subject to a 10 per cent duty, while bleached or finished textile products attract a 15 per cent duty. This cascading duty structure, he argued, disproportionately affects core segments of the value chain -- such as knitting, weaving, twisting and finishing -- particularly hurting SMEs. The PYMA urged the government to rationalise duties across all fabric types (finished, semi-finished and grey), which currently bear a flat 15 per cent duty, in order to justify a fair polyester value chain structure.Goodluck emphasised that timely resolution of these issues is critical for ensuring a stable, transparent and globally competitive textile sector.