ISLAMABAD: Small farmers from Sindh have approached Federal Board of Revenue (FBR) to reduce custom duty on imported tractors from 15 percent to 5 percent under massive tariff rationalisation plan to be implemented in budget (2025-26) to support agriculture sector.
Farmers have also proposed FBR Chairman Rashid Mahmood to reduce the existing sales tax rate on locally manufactured and imported tractors from 14 percent to 5 percent, enabling the farmers to purchase tractors. This is not an exemption, but only a reduced rate already applicable of many items including vehicles under Sales Tax Act.
The budget proposals of the Sindh Chamber of Agriculture (SCA) Hyderabad to FBR Chairman included rationalisation of tax structure and abolishment of levy of sales tax on tractors to support agriculture sector.
Sales tax on tractors, pesticides likely
When contacted, sources in the FBR revealed that the proposals are under consideration of the FBR during ongoing budget preparation exercise to facilitate poor farmers of the country.
The chamber stated that the approved tariff plan to be implemented in budget (2025-26) covers elimination of Additional Customs Duty (ACD); phasing out of Regulatory Duty (RD); gradual elimination of the Fifth Schedule of the Customs Act and restructuring of the customs tariff. This must cover most essential item i.e. tractor which is not a luxury item like vehicle.
Nabi Bux Sathio, Senior Vice President, Sindh Chamber of Agriculture Hyderabad stated: “We, as representatives of the farming and agricultural community in Sindh, feel compelled to shed light on the significant challenges and hardships faced by our fellow farmers and agriculturists in recent times”.
The chamber stated that the agricultural sector plays a pivotal role in Pakistan’s economy, contributing 24% to the GDP and employing 37.4% of the workforce. However, the sector is currently grappling with a myriad of complex issues. These include the lack of investment and support, the adverse effects of climate change, and the dwindling availability of water, exacerbating the challenges faced by farmers and agriculturists.
Moreover, farmers have been severely impacted by the inability to secure fair prices for their produce. The government’s announcement of support prices for wheat and cotton has not translated into actual purchases at the stipulated rates, leaving farmers with no choice but to sell their crops at significantly lower prices. The situation is further compounded by the low prices offered for rice and the potential delay in the sugar cane crushing season, which has added to the woes of the farming community.
He urged the FBR to reduce the existing sales tax rate on locally manufactured and imported tractors from 14% to 5% enabling the farmers to purchase tractors, and also reduce the custom duty on imported tractors from 15% to 5% and also for re-conditional tractors.
Copyright Business Recorder, 2025
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