February 20, 2002	Wednesday	Zilhaj 7, 1422

ISLAMABAD, Feb 19: The government is likely to levy tax on export of urea/fertilizers.

Reliable sources told Dawn that the decision would be finalized during the Economic Coordination Committee’s (ECC) meeting scheduled for Thursday.

The decision was taken in line with an International Monetary Fund (IMF) conditionalities for getting the poverty reduction and growth facility.

The sources said that the exact quantity of tax has not been decided.

The government is being given around Rs12 to 13 billion per annum to manufactures of urea/fertilizer as subsidy in the form of subsidized gas billings.

The sources said that the government was providing the subsidy to the manufacturers with the aim to pass on some relief to the local farmers.

For the last two years Pakistan has become self-sufficient in urea and was capable of exporting it.

Elaborating further, the sources said that there was no logic that the same relief being provided to the local farmers would be passed on to the farmers of a third country.

Furthermore, the sources said that since, under WTO, the government could not subsidize any exports, therefore, the government was left with no option but to levy export duty on urea/fertilizers so that the impact of subsidy may be offset.

The government is also considering to place export of urea to Afghanistan and Central Asian Republics in the negative list, the sources said and added that decision to this effect would also be taken in the ECC meeting.

The government has allowed free trade to Afghanistan and CARs under duty drawback scheme and zero duty. However, the exporters would not claim the same facility on export of six kinds of items.

On the other hand, the sources said, the committee would also decide to allow goods imports for its re-export to Afghanistan or not.

The government had levied 15 per cent general sales tax (GST) on import and supply stage of all kinds of fertilizers last year.

Similarly, the government had levied 15 per cent GST on urea at the actual price level due to which the price of a bag of 50kg shot up by Rs20. The government also considering to levy 15 per cent GST on all kinds of fertilizers at retail and wholesale stages as well.