The Federal Board of Revenue (FBR) has announced major reforms in its Export Facilitation Scheme, aiming to improve transparency and streamline Pakistan’s tax and trade systems. These changes are designed to make the scheme more business-friendly and efficient for exporters.
According to FBR officials, one of the most significant changes is the replacement of bank guarantees with insurance guarantees. Exporters will now be able to submit insurance guarantees instead of traditional bank guarantees however, only guarantees from AA++ rated insurance companies will be accepted.
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Additionally, cotton, yarn, and grey cloth have been excluded from the scheme, signaling a shift in focus toward other export categories. Another key reform is that 10% of raw material can now be imported without prior approval, allowing exporters greater flexibility in managing their supply chains.
The reforms also include new rules for scrap imports. For example, compressor scrap may include up to 8% copper, and motor scrap up to 10% copper. In the case of steel scrap, only registered melters will be allowed to purchase it, and applicable duties will be enforced accordingly.
FBR has also clarified that only consignments with a bill of lading issued within the last 10 days will be accepted under the revised scheme. This is to ensure that transactions are timely and reflect real trade activity.
While the new insurance guarantee system has been launched, the FBR has noted that bank guarantees will remain in use temporarily, likely during a transition period.
These changes are part of FBR’s larger effort to enhance transparency and efficiency in Pakistan’s tax structure and support export-led growth. The goal is to reduce barriers for genuine exporters while ensuring proper oversight and compliance.
The revised Export Facilitation Scheme will take immediate effect, and exporters are advised to review the new terms closely. The FBR believes these reforms will build greater confidence among exporters and attract more investment into Pakistan’s export sector.
This is a significant move towards modernizing Pakistan’s export environment, aligning it with international standards, and promoting long-term economic growth.
