Textile sector seeks breathing space on Super Tax payments

February 2, 2026 (MLN): Pakistan’s textile manufacturers have sought urgent relief from the tax authorities, while urging that their Super Tax obligations be adjusted against long overdue government refunds, warning that immediate full recovery could further strain an industry already struggling with tight cash flows and weakening export momentum.

Rising production expenses, costly energy, high interest rates and slowing global demand have left many mills operating under severe financial pressure.

Speaking in a press statement, The All-Pakistan Textile Mills Association (APTMA) Chairman Mr. Kamran Arshad said the export-oriented textile sector has been facing an extended liquidity crunch and is not financially capable of settling massive tax dues in a single payment.

He noted that enforcing one-time collection would disrupt routine business functions, erode working capital and make it increasingly difficult for companies to meet essential obligations such as salaries, utility bills and supplier payments, according to a press release issued.

He proposed that the Federal Board of Revenue (FBR) reconcile Super Tax liabilities with pending income tax, sales tax and other refund claims  including TUF and DLTL and allow the remaining balance to be paid through convenient instalment plans. Such a framework, he said, would help businesses remain compliant without jeopardizing operational continuity.

Mr. Arshad further explained that exporters who remained under the Final Tax Regime up to Tax Year 2024 require clarity on how Super Tax under Section 4C should be calculated.

He suggested that imputable income be determined through reverse computation of taxes already paid so as to align liability with the Normal Tax Regime. He urged the FBR to engage with APTMA and other stakeholders to develop clear, uniform guidelines and avoid conflicting interpretations.

Calling for immediate suspension of recovery proceedings until these issues are resolved, he warned that rigid enforcement could result in widespread closures, particularly among SMEs and export-focused mills, ultimately reducing foreign exchange earnings, shrinking the tax base and leading to significant job losses across the economy.

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