Pakistan footwear industry raises alarm over Third Schedule, seeks immediate withdrawal

The Pakistan Footwear Manufacturers Association (PFMA) has expressed strong reservations over the inclusion of the footwear sector in the Third Schedule, warning that the move could severely impact the industry's growth and further weaken the documented economy.

Speaking at a press conference held at the Lahore Chamber of Commerce and Industry, President Lahore Chamber Faheem-ur-Rehman Sehgal said the footwear industry is a vital sector of the national economy and contributes significantly to economic activity. He stated that stakeholders were not consulted before the policy decision was made.

Sehgal warned that placing the footwear sector in the Third Schedule would have "very negative effects" on the industry. He said the move would disrupt businesses operating within the documented economy while encouraging the growth of the undocumented sector.

"The documented sector is being disturbed, while the non-documented economy will benefit from this decision," he said, urging the government to immediately withdraw the footwear industry from the Third Schedule.

The press conference was also attended by PFMA Chairman Rashid Islam, former chairman Mansoor Ehsan Sheikh, and Executive Committee member Ahmed Hussain.

Addressing the media, PFMA Chairman Rashid Islam said the proposed taxation measures would further shrink the documented sector. He argued that the burden was being placed on law-abiding businesses that are already integrated into the Point of Sale (POS) system and complying with tax regulations.

Islam noted that nearly 75 percent of the footwear market remains undocumented, making it difficult for compliant businesses to compete under the new regime.

He called on the government to review the policy, warning that additional taxes and regulatory requirements could discourage formal business activity and undermine efforts to expand the tax net.

Industry representatives urged policymakers to engage with stakeholders before implementing measures that could affect one of the country's key manufacturing sectors.