LAHORE: The government of Punjab has decided to drop the plan of bringing agriculture into the tax net as policymakers believe the sector and its stakeholders are going through a critical time.
“Annual agricultural growth in recent years has been poor at only 2% in the province, contributing one-fifth to the national economy,” said Punjab Finance Minister Dr Ayesha Ghaus Pasha while speaking to members of the Lahore Economic Journalists Association on Friday.
She said focus from now onwards would be more on boosting agriculture and small and medium enterprises.
“Our neighbouring country is giving subsidies to its farmers of a much bigger magnitude than Pakistan while we are talking about taxing the agriculture sector,” she said.
“The provincial government has managed to reduce the cost of input for farmers by asking the federal government to slash duties on pesticides and fertilisers.”
Pasha said the province was also eliminating sales tax on electric tube wells to reduce the cost for farmers. More than 350,000 farmers had been provided credit at concessionary rates as mark-up would be picked by the provincial government, she said.
Talking about tax collection, Pasha pointed out that Punjab’s tax collection had gone up 30% in the past four years with the broadening of tax base and without increasing the tax rate.
“Revenue growth in Punjab from our own resources is 10% higher than the revenue growth at the federal level and in other three provinces,” she claimed, adding “this increase in revenue was achieved despite reducing the tax on 22 services.”
She said the Punjab Revenue Authority inherited only 12 services that were in the tax net, adding the number had now increased to 62 by taking assistance from technology in an effort to bring numerous tax-evading sectors into the tax net.
Published in The Express Tribune, March 31st, 2018.