Pakistan Property News > Taxes on agriculture to decrease production’

‘Taxes on agriculture to decrease production’

LAHORE: Participants of a national conference have vehemently rejected the levy of taxes on agriculture sector, including the Reformed General Sales Tax (RGST) on inputs, terming the taxes anti-farmer steps that will make a dent in production of various crops.

The conference on ìNew Budget and Priorities for Agriculture Sectorî was organised by Mir Khalil-ur-Rahman Memorial Society (Jang Group of Newspapers), Four Brothers Group and Farmers Associates Pakistan (FAP) at a hotel here on Monday.

Jawed Salim Qureshi, chairman Four Brothers Group, said farmers should be given importance as the whole economy was dependent on agriculture. He criticised the imposition of 17 percent RGST on fertilizers and pesticides, saying it would result in 20 percent reduction in output of main crops.

ìThis 20 percent loss in national production is equivalent to staggering Rs 290 billion,î he opined, adding that any tax at farming level would lead to cutting output of crops because of consequent less use of inputs. Instead, he observed, government should judiciously levy tax on various produces.

ìBy levying just three percent RGST on agriculture production of four main crops at factory gate, the government can collect Rs 62.2 billion instead of Rs 51.39 billion presently collected through levy on agriculture inputs,î he maintained.

Regarding taxing agriculture income, Qureshi said, government should impose one percent tax on export revenue of food and textile groups which valued at $19.29 billion. He also recommended that size of agriculture value-added industry, including food grading, pulping of fruits, storage capabilities & commodity exchanges, should be expanded.

Shah Mahmood Qureshi, chairman FAP and former Foreign Minister, said farmers would hold protests if the government failed to withdraw tax on agriculture inputs. He said Pakistan could get rid of shackles of the International Monitory Fund (IMF) if it gave importance of agriculture. ìThe dependence of whole economy on agriculture sector is clear indication that increase in farming productivity would directly enhance growth of other sectors,î he said and added ìAgriculture sector’s contribution in GDP stands at 25 percent while 70 percent of exports are agriculture based.î

Syed Fakhar Imam, former Speaker National Assembly, said powerful voice of farmers was a must for resolution to their problems and admitted that successive government did not give priority to agriculture sector.

Ahmad Ali Aulakh, Punjab Minister for Agriculture, termed imposition of the RGST on inputs an unfair step of the federal government. He said his provincial government fully supported demand of farmers regarding withdrawal of RGST immediately. He also criticized repeated increase in the price of fertilizers.

Nazar Muhammad Gondal, former Federal Minister for Agriculture, said imposition of tax on agriculture would not affect small farmers as they enjoyed exemptions in this regard.

Adopting a resolution, participants of the function unanimously rejected the RSGT on agriculture inputs and implements including withholding tax on millers and arties. They also observed that the wheat procurement drive had totally flopped. The farmers said they had neither been able to get their wheat sold at support price nor had been issued Bardana in time and in transparent manner. They demanded the government extend procurement period and facilitate the farmers accordingly. Over 1,000 farmers from various parts of the country were also present.