The Pakistan Footwear Manufacturers Association (PFMA) has expressed serious concern over the proposal in the Finance Bill 2026 to place the footwear sector under the Third Schedule. The association stated that the move may create acute practical difficulties for the industry, discourage documentation efforts, and place additional pressure on one of Pakistan's most labour-intensive manufacturing sectors.
PFMA Leadership Voices Concerns
Speaking at a press conference at the Lahore Chamber of Commerce and Industry (LCCI), PFMA Chairman Rashad Islam, along with former chairman Mansoor Ahsan Sheikh, emphasized that the footwear industry fully supports documentation, taxation, and national revenue objectives. However, they stressed that taxation policy must remain practical, rational, and aligned with industrial realities.
The chairman said the sector is not demanding exemptions but a fair and workable system that does not undermine compliant businesses. "The footwear industry supports documentation and national revenue generation. However, placing the sector under the Third Schedule may unintentionally push business back towards the undocumented economy instead of expanding the tax base," he added.
Potential Impact on Compliant Businesses
Islam pointed out that documented manufacturers and retailers are already paying taxes, investing in production facilities, maintaining retail infrastructure, and generating employment. He warned that any additional burden could shift consumers towards undocumented channels, increasing informality and tax leakage. The association urged the government to reconsider the proposal and engage in dialogue with stakeholders to devise a balanced approach that supports both revenue collection and industrial growth.
Industry Seeks Practical Solutions
The PFMA reiterated its commitment to working with the government to achieve tax revenue targets without harming the legitimate footwear sector. The association called for a revision of the proposal to ensure that the footwear industry remains competitive and continues to contribute to the national economy.
