PRGMEA Urges Action on EFS Reforms, Tax Policy Reversal, and U.S. Tariff Impact

LAHORE, APR 24 (DNA): Federal Minister for Planning, Development and Special Initiatives, Prof. Ahsan Iqbal, and Federal Minister for Defence, Khawaja Muhammad Asif, have pledged to raise the critical concerns of exporters at the highest levels of government. Speaking at a high-level Exporters’ Convention hosted by the Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) in Sialkot, both ministers assured the industry of their unwavering support. The event was attended by representatives from PHMA, PSGMEA, PGMEA, SIMAP, PLGMEA, and the Sialkot Chamber of Commerce and Industry (SCCI).

Prof. Ahsan Iqbal acknowledged that Pakistan’s exports, which currently stand at around $32 billion, are lagging behind regional competitors like Bangladesh, India, and Vietnam. “We need a unified, export-led growth strategy. Cities like Sialkot—with their entrepreneurial spirit and globally recognized products—must take the lead,” he said. He emphasized that economic revival hinges on building a stable, business-friendly environment and reducing the cost of doing business to restore Pakistan’s competitive edge.

Khawaja Muhammad Asif reaffirmed that the concerns of Sialkot’s exporters would be prioritized. He noted that abrupt policy changes and increasing tax burdens are harming productivity. “Sialkot’s SMEs form the backbone of Pakistan’s export economy. We will not allow them to collapse under bureaucratic pressure,” he said. He also assured that refund claims and other tax-related issues would be addressed at the highest level to create a stable and supportive environment for exporters.

Ijaz A. Khokhar, former Central Chairman of PRGMEA, voiced serious concern over the recent amendments to the Export Facilitation Scheme (EFS), especially regarding temporary imports for re-export. He warned that reduced utilization periods and new bank guarantee requirements will disproportionately affect SMEs, which already operate on tight margins. “Such policy shifts jeopardize not only our competitiveness but the very foundation of Pakistan’s export engine,” he stressed.

Adding to this, Mr. Ansar Aziz, Executive Member of PRGMEA, highlighted the urgent need for targeted SME support mechanisms and low-cost financing to help exporters navigate mounting economic pressures. “Our SMEs are the lifeblood of innovation and job creation. Without tangible support, we risk losing this backbone,” he said.

Sohail A. Sheikh, also a former PRGMEA Chairman, criticized the sudden shift from the Final Tax Regime (FTR) to the Normal Tax Regime (NTR). He said the new model introduces unpredictability in tax liabilities and increases compliance burdens. “This transition was implemented without stakeholder consultation. It has shaken industry confidence and harmed planning and cash flow certainty,” he noted.

Both PRGMEA leaders expressed alarm over the newly imposed 29% reciprocal U.S. tariffs on Pakistani exports. They reported growing buyer hesitancy, delayed shipments, and increasing order cancellations—diverting business to regional rivals like Bangladesh, India and Vietnam. “Restoring buyer confidence in the U.S. is essential,” said Sheikh. “We urge the government to send a trade delegation to Washington D.C. to engage directly with U.S. officials and negotiate tariff exemptions for low-volume countries like Pakistan. This could serve as a strategic opportunity to convert current challenges into a pathway for enhancing Pakistan’s export growth and global trade presence”

The PRGMEA also demanded fast-track clearance of stuck shipments, duty drawbacks, and the establishment of an Export Development Bank to provide affordable credit to SMEs.

Mr. Ijaz A. Khokhar and Mr. Soahil A. Sheikh emphasized that achieving cost competitiveness and ease of doing business is crucial to securing Pakistan’s export future. They called for long-term policy consistency and alignment with Prime Minister’s Uraan Pakistan Vision, which aims to double exports and position Pakistan as a globally competitive manufacturing hub.

In a powerful display of unity, PRGMEA, PHMA, PSGMEA, PGMEA, SIMAP, PLGMEA, and SCCI jointly appealed for immediate policy support to stabilize the export sector and empower SMEs. “If we want to see sustainable, inclusive growth—exporters must be heard, and their concerns acted upon,” concluded Ijaz A. Khokhar.