Islamabad, Sep 23: Farmers and agriculturists in Pakistan are deeply concerned about the Federal Board of Revenue’s (FBR) proposal to increase the sales tax on tractors from 10% to 18%.
This move, they argue, would severely impact the farming community, which is already facing numerous challenges.
In a letter addressed to the FBR Chairman, Nabi Bux Sathio, Senior Vice President of the Sindh Chamber of Agriculture, emphasized the need for tax structure rationalization and the abolition of the sales tax on tractors.
The proposed tax hike could exacerbate existing issues such as insufficient investment, climate change effects, and water scarcity, which already burden the agricultural sector—contributing 24% to GDP and employing 37.4% of the workforce.
Farmers have struggled to secure fair prices for their produce, with government support prices for wheat and cotton often unfulfilled. Low prices for rice and delays in the sugar cane crushing season add to their difficulties.
The proposed tax increase on locally manufactured tractors would only add to these burdens, despite a growing domestic tractor industry that cannot meet demand.
The Sindh Chamber of Agriculture has put forth several recommendations to the FBR, including:
- Maintaining or reducing the sales tax on locally manufactured tractors from 10% to 5%.
- Reducing customs duty on imported tractors from 15% to 5%.
- Lowering sales tax on imported tractors from 10% to 5% and eliminating an additional 3% advance sales tax.
The chamber remains hopeful that the FBR will prioritize these recommendations to support the farming community during this critical time
