Pakistan Plans to Abolish Sales Tax on Local Cotton in 2025-26 Budget Reform

• Pakistan plans to abolish the 18 percent sales tax on locally produced cotton in the 2025-26 budget
• The aim is to support the domestic cotton industry and create a level playing field with importers
• The current tax structure is under review due to its unfairness compared to tax-exempt imported cotton
• The government emphasizes the need for tax equality between local and imported cotton
• Discussions have taken place between the finance minister and the cotton ginning industry
• There is strong support for removing the sales tax on local cotton while maintaining it on non-EFS imported cotton
• The proposed change would benefit domestic cotton growers and reduce input costs for manufacturers
• The FBR is assessing the impact and revenue implications of this policy change
• The government is committed to supporting cotton producers through tax reform
• Abolishing the sales tax could strengthen Pakistan’s agriculture and textile sectors and promote fairer tax practices

Source: pkrevenue.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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