KARACHI : President Pakistan Businessmen and Intellectuals Forum & All Karachi Industrial Alliance, Chairman National Business Group Pakistan, Chairman Policy Advisory Board FPCCI, and Former Provincial Minister Information Technology, Mian Zahid Hussain has strongly urged the Government of Pakistan to protect and continue the existing 80/20 facility for industries operating within the Export Processing Zones (EPZs). He expressed grave concern that under the IMF’s Third Review of the Extended Fund Facility, the government has committed to drafting amendments that will completely prohibit sales from EPZs to the domestic market (presently 20%) by September 2026 and intends to phase out existing zones by 2035. He warned that any restriction or withdrawal of this established framework would severely damage investor confidence, disrupt international trade operations, and potentially force dozens of industrial units to shut down completely.
Expressing solidarity with the EPZ Investors Committee, Mian Zahid Hussain highlighted that the EPZs were established in 1981 under a dedicated legal framework specifically designed to attract foreign direct investment, foster technological transfer, and boost the country’s export volumes. He stated that the Export Processing Zone alone has grown into a vital economic pillar for the country, contributing approximately USD 1 billion annually in precious foreign exchange through exports and providing direct employment to nearly 50,000 workers.
Mian Zahid Hussain explained that manufacturing operations naturally generate B-grade, C-grade, off-grade materials, and necessary process wastage, which collectively account for nearly 20 percent of total production. Under the long-standing regulatory framework, these specific materials are permitted to enter Pakistan’s domestic tariff area only after the completion of all stringent customs procedures, value-addition checks, and the payment of full applicable duties and taxes, including customs duty, sales tax, and income tax. He emphasized that these localized sales are fully documented, strictly monitored, and cleared directly by the Customs and EPZA authorities stationed inside the zones, leaving no room for revenue leakage or unregulated activity.
The veteran business leader pointed out that several of EPZ enterprises are foreign investors who bring in capital and conduct their trade operations strictly in US dollars, thereby actively strengthening the national foreign exchange reserves. He reminded the policy-makers that the existing EPZ Ordinance and its corresponding Rule 24A explicitly provide legal protection to investors against any unilateral or adverse policy changes after their investment plans have been formally approved and capital commitments made.
Mian Zahid Hussain cautioned that at a time when Pakistan is striving for macroeconomic stability and trying to project itself as an investment-friendly destination, shifting policy goals would send an alarming signal to international and domestic investors alike. He emphasized that restricting the 80/20 framework would choke the operational viability of these export-oriented factories, threaten the livelihoods of 50,000 families, and undermine the national export growth strategy. He appealed directly to the Prime Minister and the relevant economic ministries to intervene immediately, support the continuation of the current EPZ policy framework, and reassure investors of policy continuity in the greater national interest. He also proposed that if the 80/20 facility has to be withdrawn at the IMF’s demand, to protect the current stakeholders from total collapse, they must be given the EFS facility without dislocating the existing land and buildings within the EPZs.
