HYDERABAD, May 23: The government should rationalise taxation measures and exempt the 93 per cent of farmers whose sustenance is only on farming and hold talks with them and other stakeholders in regard to levy of tax on agriculture income.

This was demanded by the President Sindh Abadgar Board Abdul Majeed Nizamani in a press conference on Monday.

He said new taxes would result in low production as hike in input prices will restrict its application.

Withdrawal of subsidies on inputs would inflict a loss of Rs244.5 billion as farmers would be discouraged from using the inputs, he said. The move would reduce crop productivity, especially of wheat, paddy, sugarcane and cotton.

Reduction of three maunds per acre yield of wheat, cotton and paddy, and 100 maunds per acre of sugarcane would contribute to a loss of Rs203 billion, he said. It may be noted here that wheat is sown on 25 million acres, followed by cotton on 7.7 million acre, paddy on six million acres and sugarcane on three million acres.

The government would face a loss of Rs75 billion in wheat, Rs67 billion in cotton, Rs45 billion in sugarcane and Rs16.3 billion in rice, if its yield were reduced by three maunds per acre, except for sugarcane where 100 maund reduction is counted on per acre.

Production wise loss is calculated at three million tons in wheat grain, 0.9 million tons in cotton crop, 0.72 million tons in paddy, and 12 million tons in sugarcane harvest, he said.

Mr Nizamani said this excludes Rs40.5 billion loss which would incur on reduced production of vegetables, fodder and orchards.

He wondered as to how 93 per cent of farmers, relying on agriculture for their sustenance, would be able to survive. He slammed the SBP of claiming that the agriculture's share in the GDP was 24 per cent with an income coming to Rs3 trillion without including the Rs2.2 trillion production cost.

He asked the government to hold parleys with growers as far as the levy of tax on farm income was concerned because it is not levied on gross production but on net income.

Financial resources would be achieved if the government reduced the unproductive expenditures and the Federal Board of Revenue ensured transparency, he said.

He criticised the unjust taxation method of the government by allowing tax exemptions up to the income of Rs300,000 while the slab for agriculture income starts on mere Rs80,000 earning. Businessmen too, are given a laxity as they are taxed on Rs200,000 profit, if their annual turnover touched Rs500,000 mark.

Board's General Secretary, Mehmood Nawaz Shah said that there was no objection over imposition of tax on farm income but he demanded issuance of Abiyana (water tax) and land tax to growers who should themselves deposit the amount instead of the Revenue staff.

He criticised arbitrary taxation measures as middlemen hoards inputs for gaining maximum benefits, whereas companies have their own reasons of its unavailability.

The government doesn't distinguish between an advantaged and a disadvantaged grower in its bid to broaden the tax base, he said while demanding inclusion of growers for their valuable suggestions.