Govt Considering Removal Of Sales Tax On Local Cotton In Upcoming Budget: NA Told

Umer Jamshaid Published May 12, 2025 | 11:18 PM

Parliamentary Secretary for Finance and Revenue Saad Wasim Sheikh told the National Assembly on Monday that the government is reviewing the 18% sales tax on locally produced cotton in the upcoming federal budget

ISLAMABAD, (UrduPoint / Pakistan Point News - 12th May, 2025) Parliamentary Secretary for Finance and Revenue Saad Wasim Sheikh told the National Assembly on Monday that the government is reviewing the 18% sales tax on locally produced cotton in the upcoming Federal budget.

Responding to a calling attention notice by MNA Sehar Kamran, he acknowledged that it is indeed unfortunate that this high tax rate is imposed on local cotton.

He explained that the 18% sales tax applies only to domestically produced cotton, while imported cotton under the Export Facilitation Scheme (EFS) is exempt from the levy.

He stressed the need for a fair and equal tax system. "There should be no discrimination," he said, urging that both local and imported cotton should be taxed uniformly.

Saad Wasim further informed the House that the issue was recently discussed in a meeting between the finance minister and representatives of cotton ginners. During the discussion, a proposal was considered to remove the sales tax on local cotton completely, while keeping the 18% tax on imported cotton.

He clarified that the exemption on imported cotton is only available to importers registered under the EFS.