Islamabad: Prime Minister Yusuf Raza Gilani says a uniform policy on agriculture tax is being evolved to bring agriculture sector in tax net in all the provinces.
Federal and Provincial governments are consulting stakeholders and agriculture representatives for their inputs to formulate tax policy. He said he directed finance team to find reasons behind undue price hike of agricultural inputs.
Talking to MNAs in Parliament House Thursday, Gilani told them that interests of small landholders will be protected. He said concern of parliament members from rural areas about sales tax on agriculture inputs is understandable and government will make sure to facilitate farmers who are backbone of economy.
He said government earmarked Rs 730 billion in next year’s PSDP, major portion of which would go to the provinces. Rs 500 billion extra will be given to provinces under 7th NFC Award, which will accelerate pace of development of infrastructure.
He said government also allocated Rs 32.5 billion to fast track power and water projects to make up for energy deficits. Due to global recession, fuel prices rose to $120 per barrel. Devastating floods and heavy expenditure on security put additional burden on economy.
Prime Minister said despite devolution of number of ministries to provinces along with their assets, Federal government would continue to bear expenditure of Rs 35 billion on salaries to employees of these devolved ministries.
He said tax culture is non-existent in the country. To achieve self-reliance, government is making serious efforts to improve tax to GDP ratio. He asked MNAs to look into ways and means to expand tax net while ensuring its burden is not imposed on small landholders.
He said he has convened another meeting of Parliament members, finance team along with Ministers of Industries, Commerce, Trade, Petroleum & Natural Resources to address price increase of agri-inputs through holistic policy action. Finance Minister Dr Abdul Hafeez Shaikh told MNAs that finance team has been instructed to probe undue increase in prices of tractors, agri-machinery, fertilizers, pesticides.
MNAs said Pakistan is agrarian economy and 70% population living in rural areas. Any taxation beyond capacity of rural population will lead to multifarious problems. They said last year’s devastating floods impoverished agriculture sector. Interest of subsistence farmers should be kept in view while imposing any new tax. GST on agri inputs means tax on means of production.