Textile Industry Warns of Factory Shutdowns as FBR Camera Dispute Explodes

LAHORE: Pakistan's textile industry escalated its standoff with the Federal Board of Revenue on Tuesday, with mill owners threatening factory closures if the tax authority proceeds with mandatory camera surveillance without bearing the installation costs itself.

Sources within the All Pakistan Textile Mills Association told Focus Pakistan that FBR had directed factory owners to install CCTV cameras on their premises entirely at their own expense, a demand the industry flatly refused.

FBR Camera Dispute Escalates

"If FBR forcibly installs cameras, owners will shut their factories," an APTMA source warned, framing the ultimatum as a collective industry position rather than a threat from individual operators.

Mill owners drew a sharp comparison to the government's own Safe City project. Surveillance cameras under that programme which issue traffic challans across major cities run entirely on state funds, with no cost burden transferred to private citizens. Factory owners argued FBR should follow the same model.

"If FBR wants surveillance for its own purposes, it must bear its own costs," an industry representative told Focus Pakistan. "We cannot absorb expenditures running into crores of rupees."

Textile Mills Push Back

The dispute carries a broader dimension that APTMA sources believe FBR has overlooked. Owners pointed out that Pakistan's textile mill count has shrunk to just 180 units, yet the upstream sector ginning and spinning mills numbers over 1,200 facilities nationwide. They argued FBR stands to recover significantly more tax revenue by targeting those mills first.

"Ginning and spinning generate more taxable throughput than textile mills alone," a factory owner said. "Limiting this surveillance drive to 180 mills makes no fiscal sense."

The camera programme forms part of FBR's wider crackdown on revenue leakage and production under-reporting in the manufacturing sector. The board argues real-time production monitoring would close gaps that audits alone cannot address. The industry, however, argues that FBR is shifting the cost of regulation onto manufacturers without any legal or financial justification.

Also Read: EU Presses Pakistan on Labour Rights and Governance to Retain GSP+ Access

Textile industries are some of Pakistan’s major foreign exchange earners, providing more than 60 percent of Pakistan’s total foreign exchange earnings annually. Any organized strike will definitely have ramifications on supply lines and export deals with foreign customers who are already looking at the economic stability of Pakistan.

The standoff marks the start of a larger showdown between Pakistan’s most export-sensitive sector and its tax collecting agency at a time when neither side can afford a protracted clash. It was learned that APTMA will be formally conveying their stance to FBR and Ministry of Finance shortly.