Carpet Association Demands Cut In Taxes

LAHORE, (UrduPoint / Pakistan Point News - 18th May, 2025) The Pakistan Carpet Manufacturers and Exporters Association (PCMEA) has solicited the government to slash the additional 10 percent customs duty and decrease the 25 percent sales tax on semi-processed raw materials imported via the Torkham Border in the upcoming Federal budget.

PCMEA Patron-in-Chief Abdul Latif Malik, Chairman Mian Atiq-ur-Rehman, and Vice Chairman Riaz Ahmad, in a joint media statement issued here Sunday, said that rising costs have made it increasingly difficult for Pakistan’s handmade carpets to remain competitive in international markets.

The government is trying to boost exports through initiatives like Uraan Pakistan, they said and added that such moves could only be successful by reducing taxes and removing bureaucratic hurdles, besides formulating well-conceived balanced policies for the growth of one of Pakistan’s most valuable export industries.

The Association highlighted that the handmade carpet sector, which is entirely export-oriented and part of the country’s largest cottage industries, plays a significant role in the national economy by earning valuable foreign exchange.

However, heavy duties, complex procedures, and certain restrictive measures have made it difficult for exporters to thrive.

The officials stressed that raw materials are often sent to Afghanistan for partial processing before being brought back to Pakistan for final value addition and eventual export. The imposition of a 25 percent sales tax on these semi-processed imports through Torkham, they said, has placed an unsustainable financial burden on exporters.

They urged the government to reinstate the Final Tax Regime, cautioning that its absence would severely affect export performance. Pakistan's production costs are already much higher than regional competitors, if these issues persist, it risk losing international buyers — a loss it can ill afford, they mentioned.

The PCMEA has appealed to the government to address these pressing concerns in the forthcoming budget, emphasizing that protecting and promoting the handmade carpet industry is vital for both export growth and the livelihoods of the millions of artisans it employs.