PP sack manufacturers seek ban on commercial imports of raw material

KARACHI: The Pakistan Polypropylene Woven Sack Manufacturers Association (PPWSMA) has called for a ban on the import of polypropylene raw material by commercial importers.

“Only manufacturers with valid industrial registration from the Federal Board of Revenue (FBR) and relevant compliance certifications should be allowed to import polypropylene (PP) raw material. This will discourage illicit production of polypropylene bags and ensure adherence to tax regulations,” said Iskander M Khan, chairperson of the PPWSMA, in a letter addressed to Finance Minister Muhammad Aurangzeb on Wednesday.

He also urged the government to mandate QR code printing on every polypropylene bag produced, as a step towards documenting the economy through digital means. “Its implementation will curb tax evasion and ensure a level playing field for FBR-registered polypropylene manufacturers. It will also help halt the production of undocumented polypropylene bags used in industrial packaging, which facilitates a chain of tax evasion,” Khan stated.

He explained that polypropylene bags -- an environmentally friendly packaging solution exclusively used for industrial purposes -- are produced from polypropylene granules, a basic raw material. Around 2.5 billion polypropylene bags are manufactured annually in Pakistan. Despite its use being specific to industry, the raw material is allowed to be imported by commercial importers who receive tax incentives, while industrial importers are subject to multiple taxes.

Khan added that commercial importers often supply polypropylene raw material to unregistered manufacturers operating outside the formal tax net. These unregulated transactions bypass sales tax, income tax, and other statutory levies that would normally apply to the value addition of the imported material.

This practice, he said, leads to under-reporting of polypropylene bag production, fuelling the use of “flying invoices”. Moreover, industries that use undeclared polypropylene bags for packaging are able to evade taxes by underreporting their production levels, he claimed.