LAHORE: The Federal Board of Revenue (FBR) has revised the concessions under the Export Facilitation Scheme (EFS), originally issued on July 29, 2025.
The EFS is a key government initiative designed to support Pakistan’s value-added export sector by lowering trade costs and expanding output through various import and export facilitation measures, including the exemption of duties and taxes on input goods.
This scheme aims to enhance global competitiveness for Pakistani manufacturers and reduce the current account deficit by enabling them to import high-quality raw materials and components without upfront tax burdens.
As per the amendments, raw cotton, cotton yarn and grey cloth shall be excluded from the scope of EFS. Import consignments of raw cotton, cotton yarn and grey cloth with Bill of Landing issued within 10 days of the issuance of this notification (notification date 29th July 2025) shall be allowed under this scheme.
Similarly, the EFS users shall be allowed to acquire new raw materials to the extent of 10 percent of total authorization without requiring prior approval of the Regulatory Collector or IOCO. As per the notification, the time period for partial manufacture or processing of goods by a vendor has been increased from 60 days to 90 days.
If export is not done within nine months, a committee comprising of senior officers from FBR, ministry of commerce and ministry of industries and production may grant further extension in utilization period up to nine more months for reasons to be recorded in writing. The EFS aims to simplify export procedures and reduce administrative burdens for exporters.
For instance, it replaces vulnerable insurance guarantees with bank guarantees and includes measures for input authorization and real-time tracking of goods supplied to vendors. The EFS categorizes exporters based on their export history and percentage of annual production exported, including Manufacturer-cum-exporters with 60% or above exports (Category A) and those with less than 60% (Category B, further divided by export history).
The scheme involves a three-year license period for authorized users, with the ability to revalidate for subsequent periods. It also permits the re-export of unsold goods and the sale of goods in the domestic market after a specified retention period on payment of duties and taxes.
Recent measures include strict enforcement and regulatory mechanisms to curb potential misuse of the scheme, such as requiring prior export history for vendor facility access and introducing risk-based systems for sample testing. The scheme also intends to consolidate and absorb other export facilitation schemes under the FBR.
Copyright Business Recorder, 2025
