Beyond Surveillance: APTMA Champions Full Cotton Traceability Over FBR’s Spinning Mill Cameras
The All Pakistan Textile Mills Association (APTMA) has voiced its strong support for the government’s ongoing drive to improve financial documentation, curb tax evasion, and boost Pakistan’s tax-to-GDP ratio. However, the textile body is calling for a strategic shift in how this oversight is implemented, advocating for complete supply chain traceability rather than isolated surveillance.
Key Industry Takeaways
- Traceability Over Surveillance: APTMA urges the Federal Board of Revenue (FBR) to track cotton starting from the ginning stage, rather than just placing cameras in spinning mills.
- Disputed FBR Estimates: APTMA challenges the FBR’s claims of Rs 500-700 billion in sales tax evasion on 1.5 million cotton bales, labeling the implied per-bale value commercially unrealistic.
- Protecting Exporters: Imposing heavy monitoring and capital costs on already documented, tax-compliant sectors harms Pakistan’s global competitiveness.
The Flaw in the FBR’s Mathematics
Addressing a recent press conference, APTMA Chairperson Kamran Arshad systematically challenged the FBR’s narrative regarding alleged revenue leakages in the textile spinning sector.
The FBR recently cited massive tax evasion linked to the absence of a video monitoring system. However, Arshad pointed out that the FBR’s estimate of Rs 500-700 billion in evasion across roughly 1.5 million cotton bales implies a value of Rs 1.8 million to Rs 2.6 million per bale. He stressed that these figures are commercially impossible and urged the tax authority to immediately review its data to prevent policy decisions based on flawed assumptions.
Why Ginning is the Missing Link
While APTMA welcomes the FBR’s push to leverage technology and video analytics, they argue that oversight must begin where the raw material enters the system.
Installing surveillance cameras exclusively at the spinning stage is a reactive measure that fails to address undocumented cotton entering the supply chain upstream. By implementing a comprehensive cotton traceability system starting right at the ginning stage, the government can secure the entire value chain.
The Economic Impact on Exporters
Pakistan’s economic growth heavily relies on its textile exports. Arshad warned that burdening already documented and compliant exporters with the capital and recurring costs of localized monitoring systems is counterproductive. The industry is currently battling record-high energy prices and intense global competition; adding arbitrary compliance costs will only strain the sector further.
“The objective should be traceability across the value chain rather than surveillance at an intermediary stage,” Arshad concluded.
Reported for Farm Fabric Fashion | Industry Insights
