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LAHORE: Growers strongly reacted to the proposal of withdrawal of sales tax exemption on import of seeds through supplementary finance bill 2021 and said that companies will directly pass it on to farmers adding to input cost, increasing prices for consumers and reducing profitability of farming business.

Co-founder Agri Republic and a progressive grower from Pakpattan, Aamer Hayat Bhandara regretted that the Finance Supplementary Bill 2021 tabled in parliament of Pakistan proposes the withdrawal of sales tax exemption for hybrid maize seed, amongst other key crops - vegetables (potatoes also), oil seed crops, fruits etc.

“This measure will have far reaching consequences for the Pakistani farmer, already reeling from the rising cost of inputs and the supply chain disruptions. The 17% sales tax on seeds will be directly passed on to the farmer, impacting their livelihoods. Maize crop particularly has been a phenomenal success story for Pakistan. The past 20 years have seen yields increase fourfold with farmers adopting latest hybrid seeds and modern agriculture practices. The imposition of additional taxes on hybrid maize seed will deter farmers from adopting quality seeds and will adversely impact crop yields,” he added.

Syed Nasir Ali Shah, an agriculture expert and grower from Sheikhupura, while talking to this scribe said imposition of sales tax on seed especially on maize, potatoes and vegetable would certainly dent the efforts to increase production of these crops. He said these crops rely totally on imported seed so withdrawn exemption means that either government has to extend subsidy or incentivisze the growers of these crops so as to offset the impact of increase in their input cost owing to slapping of sales tax.

Farmers Bureau of Pakistan (FBP) President Dr Zafar Hayat and a progressive farmer from Jalalpur Peer Wala said that thousands of tons of hybrid maize seed is used in Punjab and majority of this quantity is imported. Local companies tried to develop hybrid maize seed but performance of these seed neither was satisfactory nor uniform, he added, and said that expensive hybrid maize seed would not only add to the cost for farmers but it would also hit the poultry industry.

Dr Zafar said that slapping of sales tax is in total contrast of the government claim to help agriculture putting it on track of fast development. He said that withdrawing exemption from oilseeds would also damage the effort of making Pakistan self-sustaining in edible oil which is being imported against hefty foreign exchange.

Copyright Business Recorder, 2022

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