KARACHI: Muhammad Saqib Goodluck, Chairman of the Pakistan Yarn Merchants Association (PYMA), has voiced serious concerns about the duty structures and policy ambiguities in the Federal Budget 2025-26, which he claims are negatively affecting the textile sector, especially small and medium enterprises (SMEs). In a formal communication to governmental bodies, Goodluck urged immediate measures to enhance transparency, competitiveness, and sustainability within the domestic textile industry.

The PYMA Chairman highlighted a lack of clarity regarding the distinction between commercial and industrial imports in the budget. He pointed out that industrial imports are subject to a 1% income tax, whereas commercial imports face a higher rate of 3.5%. The overall duty differential, including sales tax value addition, stands at approximately 5.5%. Goodluck argued that this disparity creates administrative burdens and market distortions, contrary to earlier discussions which anticipated equal treatment for both sectors.

Goodluck also addressed the issue of Draw Textured Yarn (DTY) of polyester, which currently faces an average anti-dumping duty of 13.84%. The association believes that any additional regulatory duty on DTY is unwarranted, advocating for a reduction of the regulatory duty to 0%.

In terms of customs duties, Goodluck pointed out a structural imbalance, noting that raw materials like PFY and grey fabrics are subject to a 10% duty, whereas finished articles attract a 15% duty. This cascading duty structure, he argued, disproportionately affects sectors such as knitting and weaving. PYMA has called for a rationalization of duties on all fabric types to ensure fairness in the polyester value chain.

Altaf Haroon, PYMA's Vice Chairman, highlighted discrepancies in duty rates for Partially Oriented Yarn (POY) and Fully Drawn Yarn (FDY). These yarns, not produced domestically, undergo processing similar to fibre. While the duty on fibre has been reduced from 7% to 5%, PYMA is advocating for the alignment of POY and FDY duties with that of fibre at 5%.

Goodluck concluded that resolving these issues in a timely manner is crucial for maintaining a stable, transparent, and competitive textile sector. PYMA remains committed to collaborating with policymakers to ensure fiscal and trade policies align with industry needs.