Footwear sector opposes Third Schedule inclusion

Says budget move will discourage documentation, put pressure on labour-intensive sector

LAHORE:

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, stating 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.

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, said that the footwear industry fully supports documentation, taxation and national revenue objectives, but emphasised 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 said.

Islam pointed out that documented manufacturers and retailers are already paying taxes, investing in production facilities, maintaining retail infrastructure and generating employment. Any additional burden, he said, could shift consumers towards undocumented channels, increasing informality and tax leakage.