March 29, 2024

Pakistan's levy of sales tax on textile and clothing caused controversy

In early March, the Pakistani government announced a general sales tax on textiles, clothing, leather and carpet products, which has caused the Pakistani textile industry to rebound.

The Federal Tax Commission of Pakistan stated that domestic sales of the above products will begin to levy 17% of GST, and the previous 1% of SED will be increased to 2.5%.

In the past, domestic sales and export sales of Pakistani textile, leather and carpet products were exempted from GST because more than 80% of these products were exported for export.

The Pakistani textile industry rejected the increase in the collection of GST and the increase in SED on March 16 and called on the Pakistani government to immediately withdraw the collection of such taxes.

The chairman of Pakistan’s National Textile Industry Association Committee expressed surprise at the government’s taxation measures because the textile industry in Pakistan is facing problems such as high cotton and yarn prices, recurrent natural gas shortages and blackouts, and labor mobility, which are unable to pay such taxes. .

The Pakistani Garment Manufacturers and Exporters Association ** revealed to the media that Pakistan’s textile industry has faced problems such as insufficient electricity supply, shortage of materials, and high operating costs. It is unable to parry new taxation, and it will force Pakistan’s textile industry It is on the verge of collapse.

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