Agriculture tax: ‘We already pay too many taxes’

Land lords and parliamentarians rejects MQMs demand to impose a tax on agriculture.

KARACHI: As expected, most landlords and parliamentarians — who also happen to own a lot of land — in the province have rejected the Muttahida Qaumi Movement’s (MQM) demand to impose a tax on agriculture.

Talking to The Express Tribune, several agriculturalists said that they are already paying multiple taxes on agriculture. “There is already a tax on agriculture in Sindh and these taxes are 25 per cent more than the usual federal taxes on other things,” said Arif Mustafa Jatoi, owner of hundreds of acres of land. He feels that the bigger landlords end up paying more taxes while smaller landowners escape the net, even though they too profit from the produce of their land. The government should devise a mechanism by which all land owners pay taxes, added Jatoi.

Meanwhile, Ghous Bux Mahar, an MNA and president of the Pakistan Muslim League-Quaid (PML-Q), Sindh, is another big landlord in the province. He said that Sindh is the only province where income tax on agriculture is imposed. “I pay a lot of money in this tax,” he said. Income tax on agriculture means tax on revenue generated from the sale of the land’s produce.

Mahar said that the revenue department also collects land tax, water tax, local cess tax and drainage tax — any and all facilities being used in farming are taxed by the government. “We are ready to accept reforms in the tax [law] but the government has to provide a subsidy to growers as well,” Mahar said.

Rafique Banhan, a Pakistan Muslim League-Functional MPA and deputy opposition leader in the Sindh Assembly, had the same argument. “We are paying taxes on fertiliser, pesticide, agriculture machinery and even the transfer of land. I fail to understand the demand for another tax,” he said.

Many of the landowners also insisted that the jagirdari or feudal system no longer exists in Sindh.

Ghulam Mujadid Isran, Pakistan People’s Party (PPP) MPA and landlord in Kambar-Shahdadkot district, said that some people are talking about ‘jagirdars’ but after the land reforms, the jagirs had vanished. Not only that but the landlords of Sindh are now “suffering very badly because of inflation”.

“Every day the prices of diesel, seeds, fertilisers and electricity are going up and at any rate, landlords have to give up half of their production to the haris,” said Isran.

The situation gets so bad for the landlords that they have no choice but to take loans from banks and other sources so that their crops are not too badly affected. “After harvesting, they have to pay back the lenders and the cycle continues,” he added.

Isran suggested that a tax should be imposed on those shopping plazas, high-rise buildings, bungalows and markets where the prices of each shop, flat and house was in millions of rupees.

Naeem Ahmed Kharal, an MPA and landlord, explained that there are different rates of taxes. They pay land tax of Rs300 per acre for paddy crop, Rs350 for sugar and Rs500 for gardens. “Besides this, we pay around 15 to 20 per cent income tax on agriculture. The issue of agriculture tax is nothing but a political game they [MQM] need,” Kharal opined. He said that the MQM should know that there is no feudal system in Sindh and the situation has changed.

“The traders’ mafia buys our produce at throwaway rates and then sells it in local and international markets at prices three times higher than what they paid us. The government should also focus on prices in the market,” he said.

Published in The Express Tribune, November 28^th, 2010.