The sales tax levied by Pakistan government is causing great distress among exporters. The value-added textile exporters are worried about the ‘sales tax trap’, which is eating into their liquidity and making their products costlier in the global markets. The incumbent PML-N government is being blamed by exporters for continuing the bad sales tax policy. During its rule from 2008-2013, this tax, started by the PPP was slapped on them with two percent. The exporters termed the irrational tax as a ‘stumbling block’ in the country’s exports growth.

Muhammad Javed Bilwani, Chairman, Pakistan Apparel Forum (PAF) said that at the end of PPP government’s tenure, it had imposed 2 per cent sales tax on exports, which was then strongly opposed by the PML-N. However, he said that now the PML-N government is continuing with the same tax it had opposed in the past. The country has seen a substantial fall in exports standing at 13.42 per cent during July-October 2015-16, due to the soaring cost of doing business, added Bilwani. The country's global competing nations, such as Bangladesh had grown its exports by almost five percent and Vietnam by 9.20 percent during the same period, though, he added.

Bilwani also believes that the government's economic policies were on a ‘wrong’ track and added that the figures once again clearly prove that the government is consulting only with those whose agenda is to decrease exports for their personal gains. He said that in the last fiscal year, 2014-15, Pakistan’s overall exports dipped by 5 percent. The 50 per cent rise in tax, Bilwani believes will scale down the value-added textile exports.