The Pakistan Carpet Manufacturers and Exporters Association (PCMEA) today presented a detailed set of proposals for the next federal budget 2025-26, appealing to the government to tackle significant challenges faced by the carpet industry.

They asserted in a statement that high duties, taxes, and restrictive measures by the State Bank are stifling the growth of handwoven carpet exports, putting Pakistan at a disadvantage compared to global competitors like India.

Patron-in-Chief Abdul Latif Malik, Chairman Mian Atiq-ur-Rehman, and Vice Chairman Riaz Ahmed stressed the importance of the 100% export-oriented handwoven carpet industry, which is vital to the national economy through foreign exchange generation.

Currently, a 25% sales tax under Schedule 5 of the Customs Act 1990 on partially processed raw materials at the Torkham border is causing financial strain on exporters. The association suggested reducing this tax to a non-refundable 5% to alleviate financial pressure and support trade facilitation, enhancing Pakistan’s competitive position globally.

The association expressed concern over Circular EF02 (2023) by the State Bank, which imposes penalties on delayed export earnings. They urged the government to revoke this policy, describing it as an “unbearable financial burden. Additionally, they called for action against delays by private banks in processing foreign payments.

PCMEA also advocated for duty exemptions under the 5th Schedule of the Sales Tax Act (SR 146) to boost exports and competitiveness. They requested the inclusion of HS Code 5702 in the exemption list to support the sector further.

To improve coordination between the industry and federal agencies, PCMEA proposed appointing a dedicated representative as a focal person. The association’s leadership expressed hope for the adoption of their proposals, emphasizing that these measures are crucial for alleviating financial pressures and supporting an industry essential to Pakistan’s economic growth.