The All Pakistan Textile Mills Association (APTMA) has outrightly rejected the imposition of the Punjab Infrastructure Development Cess and expressed deep disappointment that the levy has become law after being signed off by the Governor.
APTMA said the new cess will impose an additional and unjustified cost on Punjab-based industry when manufacturing in the province is already under severe stress. Punjab has been facing rapid deindustrialization due to a persistently high cost of doing business, particularly high energy costs, taxation burden, and a challenging operating environment. The imposition of another provincial levy will further weaken the province’s competitiveness compared to Sindh, Khyber Pakhtunkhwa, and the erstwhile FATA regions.
The Association stated that the cess amounts to double taxation for Punjab-based industries. Goods moving through or from Punjab are already subject to the Sindh Infrastructure Cess, and the new Punjab levy will mean that Punjab’s industry will be required to bear both Sindh and Punjab cesses. This will create a direct cost disadvantage for manufacturers located in Punjab and discourage new investment, expansion, and exports from the province.
APTMA noted that the export-oriented textile sector operates in highly competitive international markets where prices are determined by global buyers. Additional levies of this nature cannot be passed on to customers and will directly erode the competitiveness of exports originating from or passing through Punjab. The sector is already subject to numerous federal and provincial taxes, duties, cesses, and regulatory charges. Adding another infrastructure cess is inconsistent with the stated objective of promoting industrialization, exports, and investment.
APTMA further warned that the broad scope of the cess, including goods manufactured, produced, consumed, imported into, or exported out of Punjab, risks creating serious administrative and enforcement issues. Such measures can lead to unnecessary checks, delays, inspections, and harassment in the movement of goods, undermining supply chains and increasing transaction costs for industry and trade.
At a time when Pakistan urgently needs to expand exports, revive industrial activity, and generate employment, policy measures must focus on reducing production costs and removing irritants rather than adding new levies and bottlenecks. The textile sector remains one of the largest employers and foreign exchange earners of the country, and any further erosion of its competitiveness will have consequences for investment, exports, and jobs.
APTMA called upon the Government of Punjab to immediately recall the Punjab Infrastructure Development Cess and initiate meaningful consultation with industry stakeholders. Failure to withdraw the levy will accelerate deindustrialization in Punjab, result in the closure of industrial units, and further increase unemployment in the province.
