In a letter to Muhammad Aurangzeb, Finance Minister, the All Pakistan Textile Mills Association (APTMA) has urged the government to introduce new export-oriented policies to make the textile industry more competitive globally. One of the demands of the association is to reduce energy tariffs and tax rates.

In the letter, APTMA emphasises on the need for a fundamental reform to foster an export-centric culture across all sectors of the economy. The association opines, the government should introduce a new program to foster an export-oriented environment. This will help Pakistan elevate one of its most pressing issues; shortage of forex reserves. 

IMF estimates, for the next five years, Pakistan would require above $25 billion annually as gross external financing. It can meet this requirement through either foreign burrowing, remittances or exports. 

However, prohibitive anti-exports policies implemented over the past year and beyond have made exports by the country impossible. Persistent high taxes and delays in tax refunds had squeezed out all liquidity from the manufacturing sectors. These sectors are paying 20 different federal and provincial taxes. In addition, the government has raised power tariffs for industrial consumers to over 17.5 cents/kWh, which is more than twice the regional average, while gas prices have been raised by 223 per cent since January 2023.

According to textile millers, Pakistan currently does not have any financially viable source of energy for manufacturing activities as increasing power tariffs beyond affordability had proved counterproductive and did not yield the desired results as the circular debt continued to grow.