Pakistan Agriculture News

Agriculture package on the cards

ISLAMABAD: The government is expected to announce an ambitious agriculture package in the budget 2018-19 with relief in taxes, and a hefty subsidy to support the farmers.

Ahead of the next election, PML-N government has tasked top officials of Federal Board of Revenue (FBR) and Ministry of Food Security to work out a comprehensive package by including demands of Kissan Ithihad as well.

As per the tax proposals of the agriculture package, government is considering to exempt sales tax on import of agriculture machinery which currently stands at 7pc.

It is also under consideration to introduce a uniform rate of sales tax on all types of fertilisers where currently differing rates are applicable — 5pc, 7pc and 8pc.

One of the major components of the package is the power tariff subsidy on tube wells used for irrigating crops. An announcement of a concessional tariff for agriculture tube wells from July 1, 2018 seems to be on the cards which will allow a uniform rate of Rs5.35 per unit for 24 hours.

According to a source in the finance ministry, the revision of concessional rate would mean a major relief to farmers in this one proposal. “The Kissan Ithehad has also demanded the same proposal,” the source added.

However, he said the financial impact of this subsidy will go into multi billions.

Tax officials are also considering various proposals received from different stakeholders, which will be made part of the agriculture package.

On the tax proposals, a high level meeting was also held in FBR attended by Special Assistant to Prime Minister on Revenue Haroon Akhtar Khan and Federal Minister for National Food Security and Research Sikandar Hayat Khan Bosan to give final touches to the tax part of package.

Haroon said agriculture was the backbone of the national economy and strengthening it along with linked sectors has been a key priority of the government which was committed to protecting the rights of the farmers and ensuring them better returns and prices on their farm yields.

“The government is keen to continue extending and improving various subsidies and incentives already given to the farmers and proposals and recommendations in this regard would be sincerely considered and examined to make them part of the upcoming budget,” he added.

The agriculture sector witnessed a negative growth in 2015-16, but the subsequent packages helped revived the outlook in the next subsequent years.