‘Cruel initiative’: Farmers call for end to 45% agricultural income tax

Small and progressive farmers have called for abolishing the 45% agricultural income tax, describing it as a cruel initiative that will annihilate the entire agriculture sector given they have been dealing with 20%-50% underpricing of agricultural produce since the last couple of years.

These farmers have said they will challenge the tax in the courts while declaring it as “illegal” and “unconstitutional”.

Moreover, the farmers say they already been paying 5% to 15% agricultural income tax and advance agricultural income tax worth Rs200 per acre since 1994.

IMF agreed to spare agriculture sector from taxes, says PM Shehbaz

Sindh Chamber of Agriculture (SCA) Senior Vice President Nabi Bux Sathio told Business Recorder: “Let me dispel common misconception of industrialists and trade bodies that agriculturalists do not pay taxes.”

“We are paying taxes since 1994 while we are not given loans by banks and no privileges like special industrial zones or special export zones etc by the government.

Has the government any justification to increase agricultural income tax from 15% to 45%, while agricultural produce in the range of Rs600,000 is exempted from the tax?“

He said industrialists, wholesalers and retailers can fix prices of their products but agriculturalists are at the mercy of the market.

SCA rejects ‘45pc agricultural income tax’

“We are getting low prices for our agricultural produce since Jan 2024 - around 19 months. We are getting 20%to 50% less money for wheat, paddy (rice), cotton, oil seed crops and others. However, we have got a better price of sugarcane.”

“There are three main inputs for crops such as seeds, fertilizers and diesel. I get a 50 kg bag of DAP [phosphatic fertilizer] at Rs9,000, urea at Rs2,600, 1kg of hybrid rice seed at around Rs1,500, per litre diesel at Rs186 in 2023, while they are right now being sold at Rs13,000, Rs4,400,Rs2,000 and Rs286 respectively at a local market,” he added.

Farmers Organisation Council Sindh Chairman Jawaid Junejo said there is a plan to destroy the agriculture sector which may bring about food insecurity in the country.

He said the government must review its decision and give relief to farmers so that they may grow crops which can benefit the country and countrymen.