Spinning Sector Overview
SPINNING | REGULATORY ENVIRONMENT
PACRA
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With respect to Income Tax, the spinning sector is under the Normal Tax Regime (NTR). Further, the sector is also subject to Minimum Tax
@ 1.5% of turnover, if tax liability under NTR is lower than minimum tax. However, the additional tax paid under minimum tax is adjustable
against future tax liabilities for the next 5 years.
The sector receives subsidized financing from SBP under the following schemes;
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Long Term Financing Facility (LTFF) up to PKR 5bln for installation of new plant & machinery @ -3-4%.
Govt. provides subsidized electricity at USD 7.5 cents/kwh and gas at USD 6.5 /mmbtu in order to increase export competitiveness in
export markets (Total impact of PKR ~40bln/annum to the textile cluster).
Duty structure of the sector provides protection to the local spinning players.
Govt. also provides Drawback of Local Taxes and Levies (DLTL) at the rate of 2% on eligible product line of processed fabric (2% additional
drawback is also allowable for exports to non-traditional markets).
All Pakistan Textile Mill Association (APTMA) acts as the national trade association of textile cluster in the country.
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Source: Federal Board of Revenue (FBR), SBP, Ministry of Commerce, APTMAView entire presentation