Abdul Majeed Nizamani, President of Sindh Abadgar Board, while addressing a press conference on Monday at Hyderabad Press Club, said that the government has been imposing taxes on agricultural inputs in the last few months without considering its overall effects on the agricultural community on the one hand and reduction in production on the other.
He said that 17 percent) percent sales tax and 1-2.5 percent special excise duty has been imposed on almost all agricultural inputs due which the prices of inputs have gone up therefore the farmer is unable to purchase them. He said that prices of fertiliser have been rising each month since last January.
The urea price in last January was Rs 1040 per bag. It was fixed at Rs 1175 per bag in March and jumped to Rs 1245 per bag in April, 2011. It may be noted that urea fertilizer is not available even at this price in the open market of the entire province of Sindh. It is available in the black market with the price hovering between Rs 1400 and Rs 1500 per bag. Any further rise in gas price in the coming months will bring another rise in urea prices.
Nizamani said that the price of DAP fertilizer has reached Rs 4000 per bag and is expected to rise further. In India DAP bag is available at Rs 1100 per bag and urea costs about Rs 481 per bag. Apart from this, there was a proposal published in English newspaper on 13th May, 2011 to levy 10 percent additional tax and withdraw all subsidies being provided on gas for fertilizer sector.
This will enhance the fertilizer price further causing a heavy burden on agricultural sector. He said the in fact the fertilizer has disappeared from the market on publication of this news. He added that the price of fertilisers - urea and DAP--in Pakistan will stand at a ratio of 1:4 as compared to India. This would be a very alarming situation.
He said that above all these things, a philosophy of agricultural income tax is being propagated by a bunch of so-called experts who have hardly moved out of their cosy and air-conditioned rooms to agricultural farms. It may be stated that agricultural income tax is already in vogue and provincial governments are constitutionally empowered to realise it according to a given table. Further imposing of inordinate taxes on agricultural inputs will ultimately affect the cost of production and their use is likely to decrease due to inability of the farmers to purchase them, causing a serious decrease in agricultural commodities. God forbid, enhancement of taxes on this sector in a very short period may kill the goose that lays golden egg and the dream of meeting the financial deficits from agricultural sector may not come true. Nizamani on behalf of Sindh Abadgar Board suggested to the government to continue the policy of subsidies to the agriculture to exempt the fertiliser sector from any fresh taxes and levy on the gas to consider withdrawal of GST and fresh special excise duty from agricultural items like agricultural machinery, pesticides, seeds etc, to keep these items within the reach of ordinary farmers to boost agricultural production to achieve food security in the country.
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