LAHORE: The farming community on Saturday protested against the Federal Board of Revenue’s statutory regulatory order which has linked subsidised tractor sale (at five per cent general sales tax) to production of land holding record verified by the Land Revenue Office concerned.
All other sales would be charged at 17 per cent GST.
The farmers and the industry, however, think that the SRO is neither practical nor beneficial for anyone involved in purchase of tractor – a basic farming machine – and its impact would be felt by the agriculture sector shortly.
The Pakistan Automotive Manufacturers Association (PAMA) had been involved in negotiation with the previous government to stop the order, but could not.
Listing problems for farmers, the Pakistan Kissan Ittehad says it would create multi-dimensional issues for farmers and farming. “The social set-up of rural areas is such, where substantial number of fields is held by joint families and third generation is tending the land,” explains Khalid Khokhar, chief of the PKI. A grandson, managing family land, which is still in the name of his grandfather, would not be able to benefit from this five per cent facility. Similarly, those who got land on lease and need tractors for farm practices, would also stand excluded from the facility. Those who want to purchase tractors under government schemes like Youth Programme would now be forced to pay more and see their commercial viability compromised.
Of late, service industry in rural areas has started taking shape as all farmers cannot individually afford to buy tractors (read basic machine), they prefer hiring these machines when and if needed. They would not be able to buy it at higher price and charge correspondingly more to recover investment, hitting farmers’ and economy.
The government should have thought a thousand times before taking such an anti-farming step, says chief of the Pakistan Kissan Ittehad. The above situation is very upsetting for the farming community as they are already under severe economic pressure due to increase in agri inputs’ prices and water shortage.
Therefore, the PKI would like to request the prime minister and the ministers concerned to immediately take notice of this issue and advise the FBR authorities to withdraw the SRO. Moreover, five per cent sales tax rate be ensured on tractors being key requirement for agriculture and a source of self-employment for rural youth, he demands.
“Above all, the SRO presupposes that land records in the country are updated and accessible with minimum effort,” says Muhammad Abbas, a farmer from central Punjab region. This is erroneous supposition that hit farmers hard in most of Pakistan, especially in Balochistan and Sindh, where land records are not updated at all.
The industry has its own fears and had been lobbying for the last many months – of course without any success. The PAMA wrote a number of letters to the ministry, says one of the manufacturers. The SRO also binds the manufacturers to the veracity of the land record. “Say, if ten out of 100 buyers had purchased tractor on fake land record, which they had managed through whatever means, the industry would be held responsible in the subsequent official audit. Is it possible for the industry to verify government’s land record and also ensure its correctness? What makes it even dangerous for the industry is that its refund, over Rs10 billion stuck with the government for the last few years, would be checked on the same audit merit. It has sent shivers down the industry’s spinal cord – pushing its entire commercial viability in uncertain zone,” he concludes.
Published in Dawn, May 15th, 2022