Islamabad — Large-scale tax evasion by unregistered polypropylene woven sack manufacturers is crippling Pakistan’s packaging industry and causing billions in revenue losses to the national exchequer, Pakistan Polypropylene Woven Sack Manufacturers Association Chairman, Iskander Khan, claimed in a letter to Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial.
Mr Khan highlighted that the industry produces polypropylene woven bags — widely used for packaging sugar, fertilizer, cement, wheat flour, animal feed, chemicals, and other goods — from imported polypropylene granules, a raw material exclusively meant for registered polypropylene factories. However, current FBR policy allows commercial importers to bring in this raw material with special tax concessions, which they then supply to unregistered factories.
“These unregistered units evade taxes through flying invoices and undeclared sales,” Mr Khan asserted, noting that the practice undermines legitimate tax-paying manufacturers. He explained that the tax loss is twofold: first, input tax is misused to underpay sales tax liability, and second, no taxes are paid on the products sold by these unregistered units.
Mr Khan highlighted that the industry produces polypropylene woven bags — widely used for packaging sugar, fertilizer, cement, wheat flour, animal feed, chemicals, and other goods — from imported polypropylene granules, a raw material exclusively meant for registered polypropylene factories. However, current FBR policy allows commercial importers to bring in this raw material with special tax concessions, which they then supply to unregistered factories.
“These unregistered units evade taxes through flying invoices and undeclared sales,” Khan wrote, noting that the practice undermines legitimate tax-paying manufacturers. He explained that the tax loss is
