NBR withdraws advance income tax on cotton, man-made fibre imports

The National Board of Revenue (NBR) has removed the 2 percent advance income tax (AIT) on the import of cotton and items of man-made fibre amid repeated demands from textile millers, according to a notification issued yesterday.

The move comes just over two weeks after the revenue authority imposed the tax to increase collection.

Textile millers feared that the tax would hurt the $23 billion sector, which is struggling to remain competitive due to low gas pressure, high bank interest rates, and a reduction in cash incentives on exports.

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The NBR said the new order removing the 2 percent tax will become effective immediately. 

Apart from cotton, the items exempted from AIT include acrylic or modacrylic, synthetic staple fibre, artificial staple fibre, polyester, and waste of man-made fibre