KARACHI: The Pakistan Chemicals & Dyes Merchants Association (PCDMA) has called for tighter controls on the Export Facilitation Scheme (EFS), claiming that imports under the scheme have risen sharply without a matching increase in exports.
The association wants the government to address tax disparities between commercial importers and industrial businesses while also resolving ongoing e-invoicing issues.
PCDMA Proposes Tighter EFS Monitoring
PCDMA Chairman Salim Valimuhammad said EFS imports have increased by more than 70%, despite exports not growing at the same pace.
To prevent potential misuse, the association has proposed:
- Linking EFS imports with actual foreign remittances or letters of credit
- Applying a 40% limit on EFS imports
- Conducting annual audits using three-year consumption and export data
The association argues that stronger monitoring would help ensure that the scheme serves genuine export-oriented businesses rather than creating distortions in the tax system.
Business Community Seeks Tax Parity
PCDMA also called for the withdrawal of the 3% additional sales tax and a level playing field between commercial importers and industrial concerns.
The chemicals and dyes sector supplies key inputs to industries including textiles, leather and pharmaceuticals, making tax and import policies particularly important for businesses across the wider export supply chain.
Senate Committee To Review Industry Concerns
Chairman Senate Standing Committee on Finance and Revenue Senator Saleem Mandviwalla assured the business community that its concerns would be taken up at the parliamentary level.
He said the Senate committee would invite the Federal Board of Revenue, Ministry of Finance and other relevant departments to discuss EFS, taxation and e-invoicing concerns.
Mandviwalla also urged trade bodies to engage with policymakers throughout the year instead of raising major issues only shortly before the federal budget.
Balancing Business Relief And Fiscal Targets
The government faces the challenge of supporting businesses while meeting fiscal targets and commitments under the IMF programme.
Any changes to EFS or taxation could affect different groups of businesses in different ways. The PCDMA wants policymakers to address these differences while ensuring that incentives remain linked to genuine export activity.
The association’s proposals now put greater scrutiny on how EFS imports are monitored and whether the scheme is delivering the export growth it was designed to support.