Govt scraps 0.25% export levy to ease costs for industry

November 26, 2025 (MLN): To reduce cost pressures on exporters and strengthen the country’s position in global markets, the government has abolished the 0.25% Export Development Surcharge (EDS). 

The decision was approved on Monday during a high-level meeting, chaired by Prime Minister Shehbaz Sharif in Islamabad.

During the meeting, a dedicated working group presented its recommendations after reviewing the effectiveness of the Export Development Fund (EDF) and the overall tax burden on exporters.

An official statement said the government has ordered the immediate removal of the EDS on domestic exports and initiated a comprehensive review of the Trade Development Authority of Pakistan.

A third-party audit of the EDF, covering the past five years, has also been mandated to ensure transparent and efficient use of the fund.

Authorities stressed that the EDF must strictly support export growth, R&D, and skill development, with no room for “irrelevant or unjustified” spending.

To ensure tighter oversight, an interim private-sector–led steering committee will oversee the allocation of the Rs52 billion currently available under the EDF, ensuring funds flow only to initiatives directly contributing to export enhancement.

The working group also highlighted that exporters face a significantly higher effective tax burden than domestic businesses.

A separate committee, led by Shahzad Saleem, has submitted its proposals to rationalize taxes on the export sector.

 According to Topline Securities, the now-withdrawn 0.25% surcharge would have modestly impacted FY26 earnings:

Impact of EDS (0.25%) on Exporters 
Based on FY26 estimates

• Textile:

  • NML: Export revenue Rs110bn; EDS hit Rs275mn; ~2.5% bottom-line impact

  • ILP: Export revenue Rs222bn; EDS hit Rs554mn; ~2.9% impact

• Cement:

  • LUCK: Export revenue Rs42bn; EDS hit Rs104mn; ~0.2% impact

  • DGKC: Export revenue Rs22bn; EDS hit Rs55mn; ~0.3% impact

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