Pakistan Leather Industry on the Brink of Collapse, PTA Chairman Urges Government Action

Pakistan Leather Industry on the Brink of Collapse, PTA Chairman Urges Government Action

Karachi — The Pakistan Tanners’ Association (PTA) has issued a grave warning about the dire state of the country’s leather industry. Muhammad Mehr Ali, Chairman of the PTA, highlighted the escalating crisis that threatens to shut down operations across the sector. He emphasized the urgent need for government action to address critical issues that are pushing this vital export-oriented industry to the brink of collapse.

In the latest Federal Budget for 2024-25, the government has imposed additional taxes on the leather industry, exacerbating an already heavy burden of duties and tariffs. The industry, which significantly contributes to Pakistan’s GDP, is struggling to remain viable amid these new financial pressures.

Details of New Duties:

  • 2% Additional Customs Duty (ACD): Imposed on HS Codes including 4107.1200, 4104.1100, 4107.9200, 4106.2100, 4106.2200, 4112.0000, 4113.1000, 4104.1900, 4105.2000, 2830.1010, etc.
  • 5% Regulatory Duty (RD): Applied on HS Code 3909.5000.

These new duties are pushing the industry out of the competitive international market, making it increasingly difficult to secure export orders for finished leather.

A severe shortage of financial capital is another critical issue plaguing the industry. The government owes approximately Rs2.5 billion (approxi US$9 Million) to the sector in unpaid sales tax, duty drawback claims, income tax, and deferred claims. This financial instability has already forced some units to shut down, with many others on the verge of closure due to their inability to sustain operations.

Chairman Muhammad Mehr Ali has called on the government to take immediate action to resolve these issues. He stressed that without intervention, the industry, which plays a significant role in the country’s economic growth, will continue to deteriorate, leading to widespread closures and loss of export revenue.

In conclusion, the Pakistan leather industry is at a critical juncture. The government’s recent tax impositions and failure to address financial claims have created an unsustainable environment for the sector. Urgent intervention is needed to prevent the complete collapse of this key industry and to support the economic stability of the nation.

Like this article? Share it with your network!

Arshad

Arshad

He is an engineer specializing in Leather Technology, known for his keen interest in analyzing global leather, footwear, and leather goods markets & his ability to make complex information clear & accessible. 

Write for Us

Share your stories, experiences, opinions, and analysis in the expert columns of leathernews.org and reach a niche audience and make your voice heard in the global leather, footwear & leather goods industry.

Support Us

We bring you the latest news, insights, and analysis from the global leather, footwear, & leather goods industries

Search Articles

Roll Up Your Sleeves & Join Our Exclusive Newsletter

Get our free weekly newsletter that keeps hundreds of professionals in the global leather, footwear & leather goods industry updated with the latest insights & news.

Recent News

12 Tannery Owners Finalize Plot Allocations in Sialkot Tannery Zone with SCCI President

In a series of productive meetings with Ikram-ul-Haq, the President of the Sialkot Chamber of...

Indian Sneaker Marketplace Startup Culture Circle Secures $2 Million in Seed Funding

Culture Circle, a sneaker-focused ecommerce marketplace platform, has successfully raised $2 million...

Egyptian PM Mostafa Madbouly Visits Robbiki Leather City Highlighting $1 Billion Export Vision

Egyptian Prime Minister Mostafa Madbouly recently visited the Robbiki Leather City, underscoring its...

Support Us

We bring you the latest news, insights, and analysis from the global leather, footwear, & leather goods industries