ISLAMABAD – The Islamabad Chamber of Commerce & Industry (ICCI) has said that the agriculture was playing important role in the economic development of the country and providing raw material to many industries, therefore, government should consider announcing more incentives for this sector in the forthcoming budget that would help in further strengthening the rural economy, improving agricultural productivity, facilitating the growth of industry and creating more employment opportunities for rural and urban population.
President ICCI Ahmed Hassan Moughal, Senior Vice President Rafat Farid and Vice President Iftikhar Anwar Sethi said that the government was reportedly considering options to withdraw certain exemptions given to farm sector, including reduced general sales tax on seeds, fertilizers, pesticides and machinery, which was not a good move as it would create more problems for the farmers and affect the growth of agriculture sector.
They said that the PTI government in its party manifesto had vowed to increase farmers’ profitability and boost growth by ensuring cheap agricultural inputs, but the withdrawal of exemptions would be a negation of its promises.
Ahmed Hassan Moughal said that previously a number of incentives including agriculture credits, customs duty exemption on harvesters, and removal of general sales tax on imported sunflower and canola seeds were provided to farmers along with reducing sales tax rate on fertilizers.
He said if implemented, the move of the government would cause a significant jump in cost of agro inputs and negatively impact agricultural productivity. He cautioned that such steps would further fuel the already high levels of inflation and hit hard the poor farmers while consumers would also face further price hike.
ICCI President said that around 60 percent of farmers in Pakistan belonged to small scale and such steps would add to their problems. He urged that instead of considering withdrawal of exemptions to agriculture sector, government should make efforts to further strengthen and uplift the agriculture sector through various initiatives.
Ahmed Hassan Moughal stressed that government should focus on reducing input costs, improving access of farmers to market and providing cheaper financing options to them. He said these measures would help boost agricultural productivity, promote agro-based industry, reduce unemployment and poverty and generate more tax revenue for the government.