ISLAMABAD: The federal government is likely to impose sales tax on tractors as well as pesticides during the upcoming budget (2024 25).
Under the Sixth Schedule of the Sales Tax Act, sales tax exemption is available on pesticides and their active ingredients registered by the Department of Plant Protection under the Agricultural Pesticides Ordinance, 1971.
Budget makers are considering to withdraw the said sales tax exemption on pesticides from the next fiscal year (2024-25).
Tractor supplier failed to recover taxes
Tractors including road tractors for semi-trailers (Electric Prime Movers) are sales tax zero-rated.
The proposal is to impose lower rate of sales tax on tractors as well as pesticides.
These are the Federal Board of Revenue (FBR)’s budget proposals and nothing is final in this regard.
Sources said that FBR on the recommendation of the International Monetary Fund (IMF) has prepared proposals withdrawing the tax exemptions for various sectors, including tractors as well as pesticides.
The government during the current year budget 2023-24 has exempted these two sectors, but now, on the recommendation of the IMF, it proposes to withdraw exemptions to get more taxes from these sectors.
Sources said that FBR has estimated to collect Rs30 billion taxes if the proposal is approved from the Parliament.
Sources added that the government’s proposed plan will not only increase the prices of tractors but also the pesticides due to which the burden on farmers will increase manifold.
Copyright Business Recorder, 2024
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