FBR urged to act against EFS misuse instead of ‘penalising’ SMEs

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LAHORE: Pakistan Ready Made Garments Manufacturers and Exporters Association (PRGMEA) has strongly opposed the recent amendments to the Export Facility Scheme (EFS), warning that it will damage the costume sector, especially small and medium -sized businesses.

Former PRGMEA chairman Ajis Khohar called on the Federal Board of Revenue (FBR) to take strict action against companies that misuse EFS facility instead of punishing the entire export sector. He emphasized that SME exporters were already struggling and delaying the implementation of these amendments would help prevent further damage.

Khokhar said, “A major concern is a short period of use for imported raw materials, which is now closed in nine months, which requires expansion.

The PRGMEA leader argued that the production of apparel includes several steps, including designing, souring, manufacturing and shipping, adding that adding a restricted timeframe will make it difficult for exporters to fulfill their promises. “Another problem requires bank guarantee for better facial price, which affects SMEs inadvertently. Many people have a lack of financial resources to secure such guarantees, potentially preventing them from the necessary benefits of export facility.

“This policy limits their ability to expand international markets. He added that amendments to the SRO 301 (I)/2025 will weaken the competitiveness of the country in exports of costumes.

Khome highlighted that the industry was already struggling with increasing production costs, energy shortages and logistics challenges, and added that the additional regulatory burden would only worsen these problems, threaten jobs and reduce export capacity.

He said the global buyers are very sensitive to delivery timelines, and the bureaucratic delays may result in lost orders. “New amendments impose non -real restrictions on the use of raw materials and require bank guarantees that SMEs cannot tolerate. These policies will negatively affect the country’s export growth and textile sector.

He also expressed concern over the compliance burden and the uncertainty of the policy, which could undermine Pakistan’s position against regional rivals such as Bangladesh and Vietnam. He emphasized that exporters need a systematic, transparent system that ease trade rather than complex rules and regulations that generate delays and additional costs.

The PRGMEA leader warned that these amendments could reduce duty disorders and sales tax exemptions, which were necessary to maintain profit. He added, “Pressure manufacturers, and more obstacles can affect their cash flows before delaying the refund processing.”

He said that small exporters relies heavily on timely refund to re -invest in production and meet new orders. Reducing the quality of eligibility to access EFS benefits is another challenge. Banning these benefits will affect SME exporters unrealistic, who already face difficulties in increasing financial support and operations.

Khokhar also emphasized the need for consistency in export policies. “Repeated and obvious policy changes lead to confusion and increase operational risks, especially for SMEs that have limited resources. Exporters need clear, stable rules to effectively plan their operations.

He demanded the inclusion of PRGMEA and Pakistan Hosiery Manufacturers and Exporters Association (PHMA) in the committee to review the export facility scheme. “Since these two organizations jointly contribute to $ 8.69 billion exports, their participation is very important to ensure that the policies are in line with the industry’s facts.”

Khukhar called on the government to review the amendments to the EFS, ensuring that they would support exporters rather than obstacles. He called on policy makers to cooperate with industry representatives to develop a convenience framework that promotes development and strengthens Pakistan’s status in the global market.