Farmers Warn 18% Sales Tax on Tractors Will Be Disastrous

The poor farmers and agriculturists have expressed serious concern over the Federal Board of Revenue (FBR) proposal to raise sales tax on tractors from 10 to 18 percent, which will be a disaster for the entire farming community. According to a letter of Nabi Bux Sathio, Senior Vice President Sindh Chamber of Agriculture Hyderabad, Sindh to Chairman FBR, the farmers have strongly proposed rationalization of tax structure and abolishment of levy of sales tax on tractors to support the agriculture sector. The farmers have shared negative implications of FBR’s proposed raise in sales tax on tractors in the farmers’ community. The tax rationalization package proposed by the Sindh Chamber of Agriculture covers the reduction of import duty/sales tax on imported tractors and the continuation or reduction in the existing sales tax rate on locally manufactured tractors. Sindh Chamber of Agriculture has informed FBR that the chamber, as representatives of the farming and agricultural community in Sindh, feel compelled to shed light on the significant challenges and hardships faced by our fellow farmers and agriculturists recently. The agricultural sector is pivotal in Pakistan’s economy, contributing 24% to the gross domestic product (GDP) and employing 37.4% of the workforce. However, the sector is currently grappling with a myriad of complex issues. These include the lack of investment and support, the adverse effects of climate change, and the dwindling water availability, exacerbating the challenges farmers and agriculturists face. Moreover, farmers have been severely impacted by the inability to secure fair prices for their produce. The government’s announcement of support prices for wheat and cotton has not translated into actual purchases at the stipulated rates, leaving farmers with no choice but to sell their crops at significantly lower prices. The situation is further compounded by the low prices offered for rice and the potential delay in the sugar cane crushing season, which has added to the woes of the farming community, it stated. In addition to these hardships, the reported news is that the FBR has proposed an increase in the sales tax on locally manufactured tractors only serves to burden the already struggling farmers. Despite a notable surge in the domestic tractor industry, there remains a substantial gap between the actual availability of tractors and the required horsepower per acre, further underscoring the challenges faced by farmers in accessing essential agricultural machinery. To address these pressing issues, the Sindh Chamber of Agriculture has urged the FBR Chairman to consider the following recommendations: – Implementing these recommendations will not only provide immediate relief to farmers but will also act as a catalyst for revitalizing Pakistan’s agricultural sector. By supporting the backbone of our economy, we can ensure a prosperous and self-reliant future for the nation. The said measures will secure the livelihoods of millions and bolster national growth. The Sindh Chamber of Agriculture remained hopeful that the Federal Board of Revenue will prioritize these crucial reforms and stand with the farming community during this challenging time, it added.