The All Pakistan Textile Mills Association (APTMA) has urged the Federal Board of Revenue (FBR) to reconsider its current cotton monitoring strategy, emphasizing that effective oversight must begin at the ginning stage, where raw cotton enters the formal supply chain. According to the association, monitoring spinning mills does little to address the root cause of undocumented cotton trade and related revenue losses.
In a letter addressed to FBR Chairman Rashid Mahmood Langrial, APTMA Chairman Kamran Arshad highlighted that the long-standing issue of undeclared, or “golmaal,” cotton originates well before cotton reaches spinning units. He stressed that ginneries serve as the first formal processing point and therefore represent the most critical stage for ensuring transparency and accurate documentation.
To support this position, APTMA pointed to a stark discrepancy in cotton figures from Punjab. While official estimates suggest that the province produces around 3.81 million bales, records show that only 2.45 million bales are delivered to ginneries. This gap of approximately 1.35 million bales raises serious concerns about leakages, underreporting, and informal transactions occurring at the ginning level.
According to APTMA, placing surveillance measures such as video monitoring at spinning mills unfairly targets downstream manufacturers who rely on already-processed cotton and have limited control over its initial documentation. Instead, the association recommends implementing video monitoring systems at ginneries, complemented by a national cotton traceability mechanism that tracks cotton from the farm to the factory.
Such a system, APTMA argues, would allow authorities to capture accurate production data, reduce undocumented movement of cotton, and strengthen compliance without disrupting legitimate industrial operations. By focusing on the earliest point in the supply chain, the government can more effectively plug revenue leakages and improve regulatory oversight.
APTMA has therefore called on the FBR to withdraw the existing monitoring framework applied to spinning mills and replace it with a revised procedure centered on ginneries. The association believes this shift would not only enhance transparency but also restore confidence within the textile sector, which remains a cornerstone of the national economy.
As discussions continue between industry stakeholders and tax authorities, the proposal underscores a broader demand for smarter, source-based regulation—one that addresses systemic weaknesses rather than imposing blanket controls on compliant businesses.