Tax policy for cotton sector: FBR asked to seek viewpoint of IMF

ISLAMABAD: The National Assembly Standing Committee on National Food Security and Research has directed Federal Board of Revenue (FBR) to seek viewpoint of International Monetary Fund (IMF) if current tax policies fail to generate adequate revenue and continue to harm the cotton sector.

These directions were issued at a recent meeting of the Standing Committee, in which Ministry of National Food Security and Research has been directed to conduct consultative meetings with all relevant stakeholders, including the Ministry of Law and Justice, as previously advised, and provide an update on the recommendations sent them for resolution of issues of agriculture sector.

The Ministry of National Food Security and Research is to formally write to the Ministry of Law and Justice to review “The Pakistan Animal Science Council Bill, 2024” as previously recommended. The letter should also seek clarification on whether the Bill falls under the Federation’s jurisdiction, in accordance with Article 144 of the Constitution, and whether Cabinet approval is required for a Private Member Bill.

Imported & local cotton: Recommendation on removal of disparity between tax rates sought

The FBR has been directed to submit detailed reports on crucial aspects of the cotton sector, including sales tax collected and refunded over the past five years, cotton import and export data, potential revenue losses due to the current tax system, a financial and economic analysis of the sector, and updates on implementation of track and trace and RFID systems for controlling production hides.

“FBR is to consult with the Ministry of Commerce and engage with the IMF if current tax policies are found to be ineffective in generating revenue and are contributing to the decline of the cotton sector,” the sources quoted the Committee Secretariat as saying in a letter to the concerned Ministries.

The Ministry of Energy (Power Division) is to develop and present concrete proposals on how the agricultural sector can receive immediate relief from high electricity costs. These proposals should focus on short-term measures to ease the financial burden on farmers, especially in light of ongoing efforts, such as the cancellation of contracts with five Independent Power Producers (IPPs).

The Ministry of Energy is to provide a comprehensive report on the over-billing criteria used by electricity distribution companies, detailing how over-billing complaints are addressed, existing redressal mechanisms, and actions taken against those found responsible for over-billing.

The Committee instructed that all CEOs of Distribution Companies (Discos) attend the next meeting via Zoom to provide a comprehensive explanation and participate in an in-depth discussion on the over-billing issue.

Copyright Business Recorder, 2025