THURSDAY AUGUST 25: Cabinet decision: agriculture produce exempted from 3.5 percent WHT

ISLAMABAD: The federal government has decided to exempt growers from payment of 3.5 percent withholding tax against payments made on supply of agricultural produce, said federal Minister for Information Dr Firdous Ashiq Awan on Wednesday.
The minister told media at a news conference that the Cabinet meeting chaired by Prime Minister Syed Yousuf Raza Gilani expressed satisfaction over the issuance of notification by Federal Board of Revenue that amended the Second Schedule of the Income Tax Ordinance 2001 to exempt agriculture produce from income tax.
The amendment states "that the provisions of the concerned sections related to withholding income tax, will not apply to the agriculture produce purchased directly from growers, if the growers provide a certificate to the withholding agent and that he is not liable to any withholding income tax."
The minister said the government was monitoring on day-to-day basis the prevailing energy crisis and the Cabinet was also updated about the latest situation. She said that the meeting was informed about the steps being taken in this regard. Dr Firdous Ashiq Awan said the Prime Minister directed Finance Minister Dr Hafeez Sheikh to hammer out some out-of-the-box solutions to end loadshedding. The meeting was informed that the committee constituted by the Prime Minister on energy crisis would suggest some concrete recommendations in this regard after Eid.
She said the Cabinet also directed that after removal of legal hitches work be expedited on Checho Ki Malian and Nandipur power projects which would add around 1000 MW to the national grid on completion. A handout stated that the Cabinet gave approval to the Financial Document for 425 megawatt power project at Checho Ki Malian and 525 MW at Nandi Pur should be completed in time as the nation needs each megawatt to offset the effects of loadshedding.
Firdous said the Cabinet meeting showed reservation on availability of urea in the country and directed the concerned authorities to improve supply of the commodity and warned hoarders that strict action would be taken against them. He also informed the Cabinet that further 200,000 tons of fertiliser is being imported for Kharif crops. 150,000 tons of fertilisers have already been imported. A subsidy of Rs 5 billion has been given on fertilisers.
The Cabinet considered and directed the ministry of religious affairs to revisit the draft bill for Regulating Hajj, Umrah and Ziarat business in Pakistan and also incorporate the points in the bill raised by the Cabinet members.
The Cabinet considered and gave approval for the confirmation of the decisions taken by the previous meeting of the Economic Co-ordination Committee (ECC) and formed a committee comprising ministers of petroleum, finance and industry to discuss and settle matter with regard to Ogra.
The cabinet considered and accorded approval to enter into formal negotiations on Air Services Agreement between Pakistan and Latvia and accorded approval to Pak-French Joint Declaration on Economic and Commercial Partnership. The Cabinet approved signing the agreement between the Government of Pakistan and Senegal on Co-operation in combating the Illicit Trafficking of Narcotics Drugs, Psychotropic substances and Precursor chemicals.
Starting negotiations, Signing and Ratification of the Agreement on Co-operation and Mutual Assistance in Customs Matters between Pakistan and Sri Lanka was also approved by the Cabinet besides amendment and signing of protocol to the agreement between Governments of Pakistan and Brunei Darussalam for the Avoidance of Double Taxation and the Prevention of the Fiscal Evasion with respect to taxes on income.
The Cabinet considered and accorded approval for initiation of the negotiations on MoU on Scientific and Technological Co-operation between the Governments of Pakistan and Russian Federation. The Cabinet reviewed the implementation status of its decisions pertaining to overseas Pakistanis, railways, religious affairs and revenue division.
The Cabinet expressed satisfaction over the issuance of a notification by the FBR amending Second Schedule of the Income Tax Ordinance 2001: "that the provisions of the concerned sections related to withholding income tax, will not apply to the agriculture produce purchased directly from the grower of such produce if the growers provides a certificate to the withholding agent and that he is not liable to any withholding income tax."