Farmers Denounce FBR’s Plan to Increase Sales Tax on Tractors
Government support prices for crops are undermined by slow purchasing processes.
On Sunday, the Sindh Chamber of Agriculture expressed strong opposition to the Federal Board of Revenue’s (FBR) proposal to increase the sales tax on locally manufactured tractors from 10% to 18%. In a letter addressed to FBR Chairman Muhammad Zubair, senior vice president Nabi Bakhsh highlighted the detrimental effects such a hike would have on the already struggling agricultural sector.
The chamber articulated significant concerns from farmers, arguing that the proposed tax increase would only worsen their financial burdens. Instead of imposing higher taxes, the Sindh Chamber urged the FBR to consider reducing the sales tax rate on tractors to 5% and decreasing customs duties on imported tractors from 15% to 5%. This reduction, they argue, is crucial for supporting farmers during these challenging times.
The letter also called for the elimination of the additional advance sales tax of 3% on tractor imports, which adds to the financial strain on farmers. Critics of the FBR’s proposal argue that it could severely impact the agricultural community. Given that agriculture contributes approximately 24% to Pakistan’s GDP and employs nearly 37.4% of the workforce, the sector’s vitality is essential for the country’s economic stability.
Farmers are currently grappling with various challenges, including water shortages, climate change effects, and insufficient investment. Although the government has announced support prices for crops like wheat and cotton, delays in procurement have forced many to sell their produce at significantly lower prices, worsening their situation.
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The Sindh Chamber’s letter emphasized that raising the sales tax on tractors would further limit access to essential agricultural machinery, which is vital for enhancing productivity. By implementing the chamber’s recommendations, immediate relief for farmers could be achieved, contributing to the recovery of Pakistan’s agricultural sector and overall economic stability. The letter concluded by urging the FBR to prioritize these reforms and support the farming community during this critical juncture.
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