Farmers Associates Pakistan (FAP) has strongly protested the government decision to levy 16 percent sales tax on agriculture machinery, fertiliser, pesticides, seeds and other agriculture inputs which would put a collective impact of Rs 324 billion on the sector.
This was observed in a meeting of the FAP Board of Directors held here on Wednesday. The meeting was presided over by Syed Hussain Jahania Gardezi, Vice Chairman FAP. Participants strongly protested the government's decision to levy 16 percent agriculture inputs besides other hidden taxes.
Tariq Bucha, spokesman of FAP explained and enumerated measures through which the government has decided to plunder Pakistan agriculture thereby its economy. Under section 153 of the Income Tax Ordinance 2000, tax collection in the form of withholding tax on rice, cottonseed and sugarcane at the rate of 1.5 percent would result in impact of Rs 20 billion.
On tractors, the total impact will be Rs 9 billion on the basis of the estimated production of 75,000 units next year, which seems most unlikely in view of high prices because of GST. Impact of GST on urea will cause an additional burden of Rs 31 billion since the total sale of urea is around Rs 190 billion, the meeting observed.
The meeting observed that the largest impact of GST will be on diesel which the growers of Pakistan consume worth Rs 250 billion and the impact of GST will be Rs 40 billion. Moreover, the imposition of GST will also reduce the crop production by 20 percent, which will ultimately adversely affect the economy by Rs 200 billion.
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