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KARACHI: The imposition of 17 percent tax on agriculture seed and machinery imports come at a time when the government is looking to promote oilseed crops through subsidies to lessen the burden on imports, Pakistan Businesses Forum (PBF) Vice President, Ahmad Jawad said.

He said the tax on cottonseed and its derivatives in particular will adversely impact cotton growers and allied industries.

The maize crop, he says, is a major contributor towards the growth of the poultry industry, with 70pc of grain going into poultry feed. The dairy industry is also highly dependent on the maize crop, with silage requirements increasing day by day.

In 2020-21, almost 130,000 tonnes of grain and 80,000 tonnes of silage were exported from Pakistan, he claims, fearing that with the imposition of sales tax on maize seed, the export competitiveness of the crop will face a major challenge and hurt the livelihoods of farmers.

Rice and vegetable seeds are also facing the same predicament as the additional tax will discourage farmers from adopting high-yielding hybrid seeds, resulting in overall productivity loss and food security concerns, he apprehends, urging the government to review its decision of withdrawing sales tax exemption on key agriculture inputs and provide relief to the farmers in order to achieve projected GDP growth target; he added.

He said that economic managers is putting Pakistan at stake for a mere $1 billion” to tap IMF last tranche, despite the fact Government has received 32 billion dollars foreign remittances and 31 billion dollars have been projected in export sector by the end of financial year and Federal Board of Revenue has made tax collection of Rs 6,000 billion during current fiscal year.

He said withdrawal of sales tax exemption for various crop seeds, agriculture inputs and farm implements will have far-reaching consequences for the already struggling farming community, raising their cost of cultivation by 5 to 10 percent.

He underlined that Pakistan is currently one of the most expensive countries of the world. Highlighting the “unnecessary taxes” in the supplementary finance bill, he said that countries are reducing taxes while the government is imposing additional taxes.

Jawad regretted that general sales tax is being imposed on children’s milk even.

He said that Nero fiddled while Rome burned. Today the government has proved right. Rome is burning and Nero is playing the fiddle.”

“Agriculture, industries are in a terrible state. In the supplementary Finance Bill, the government has also proposed an increase in taxes on the export of raw material required for the production of medicines, which will eventually increase the price of medicines in the country.”

He said that Pakistan was self-sufficient in agricultural produce a few years back, however, right now the country has to import wheat and sugar.

“How could we promote agriculture if government is imposing additional taxes on the import of agricultural implements and machinery?” he questioned.

He said that previously the price of urea was Rs1,200 and today the price is around Rs3,700. Meanwhile, the price of DAP (diammonium phosphate) during last government tenure was Rs2,400, while currently the price is around Rs9,500, that too in the black market.

“Agriculture, industry, businesses and the common man, all are in a terrible state.”

Irked by the measures taken in the proposed mini-budget, Jawad said these are totally inconsistent with the government policy to promote agriculture exports and reduce imports.

Copyright Business Recorder, 2022


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