Pakistan’s textile sector has raised concerns over proposed amendments to sales tax penalties included in the Finance Bill 2026, warning that the changes could negatively impact compliant businesses across the country.
The All Pakistan Textile Mills Association (APTMA) has formally requested the Federal Board of Revenue (FBR) to reconsider certain provisions of the proposed legislation. According to the association, the suggested amendments may place an unfair burden on taxpayers who have fulfilled their legal obligations.
In a letter addressed to FBR Chairman Rashid Mahmood Langrial, APTMA acknowledged the government’s commitment to tackling tax evasion, fake invoicing, and fraudulent business practices. The association emphasized that it supports measures designed to improve transparency and strengthen the tax system.
However, APTMA argued that the proposed inclusion of Serial Nos. 30 and 31 in Section 33 of the Sales Tax Act, 1990 could create unintended consequences for legitimate businesses. The organization believes the amendments may hold buyers responsible for violations committed by suppliers, even when purchasers have acted in good faith and complied with all legal requirements.
Industry representatives noted that businesses often rely on documentation and verification processes to ensure compliance. Despite these efforts, they may not have full control over the actions of suppliers after transactions have been completed. As a result, taxpayers could face financial penalties for issues that originated elsewhere in the supply chain.
APTMA stressed that accountability should remain focused on the party directly responsible for any fraudulent activity. The association warned that imposing penalties on compliant businesses could discourage investment, increase uncertainty, and create additional operational challenges for the textile industry.
The textile sector remains one of Pakistan’s largest export-oriented industries and plays a crucial role in generating employment and foreign exchange earnings. Industry stakeholders believe that policy measures should balance enforcement with fairness to ensure continued economic growth and competitiveness.
The association has urged the FBR to amend the proposed clauses and develop a framework that targets tax fraud without penalizing genuine taxpayers. According to APTMA, an effective tax regime should encourage compliance while protecting businesses that follow the law.
As discussions around the Finance Bill 2026 continue, the textile industry hopes that policymakers will engage with stakeholders and address concerns before the legislation is finalized. The outcome of these consultations could have significant implications for Pakistan’s manufacturing and export sectors in the coming years.
