Tax agriculture, farmers’ association suggests govt

Want a ‘few demands’ to be met in return.

LAHORE: The Farmers’ Association of Pakistan (FAP) has agreed to levy taxes on income earned through agriculture and livestock. The association also invited the government to include the sector under the tax net as per the income tax ordinance of 2001.

The FAP also cited the sector’s 22% contribution to Gross Domestic Product (GDP), pointing out the advantage this served to the other sectors.

“We invite the government to tax the sector,” said FAP President Tariq Bucha. “But we also demand similar rights for rural dwellers as those in the urban areas.

“Agriculture is paying taxes on all the raw materials it uses — such as diesel, electricity, fertilizer. Thus, the perception that we do not contribute at all is wrong. However, in terms of income taxes, it is quite right.”

According to government statistics in 2007 – the latest available – 90% farmers own up to 5 acres of land, while landlords, who form 0.05% of the farmer population, own more than 50. This translates into 5,170 people owning more than 50 acres and this number is expected to be reduced to 3,000 due to the land division rule.

Bucha said the other farmers are blamed due to these landlords not paying their taxes.

“The major chunk of farmers – since they are unregistered – is already paying 19% GST on their raw material. However, no other industry is paying this much tax on its input. Even registered farmers have to pay less tax as per the new Federal Board of Revenue (FBR) rules.

“These policies have now started affecting the farmers as they are now least bothered to enhance their per acre yield. This has caused them to sell their land and migrate to urban areas.”

Meanwhile, FAP director livestock and dairy development Hamid Malhi called on the levying of taxes on livestock as well, recommending that Rs100 per animal on farmers who have up to 25. He added that the government was focused on stopping tax leakages and not on taxing new sectors.

“We are ready to cooperate to effectively implement these recommendations,” said Malhi. “But these need to go hand-in-hand with a demand that food security needs to be provided to these farmers.

Bucha said the FAP was ready to cooperate if a ‘few demands’ were met.

Published in The Express Tribune, November 12^th, 2013.

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