ISLAMABAD: The Pakistan Business Forum (PBF) has urged the government to abolish the 18 per cent General Sales Tax (GST) on locally produced cotton in the next federal budget and reduce customs duties on imported machinery used in the cotton ginning sector.

On Wednesday, PBF Chief Organiser Ahmad Jawad led a delegation in a meeting with Minister for National Food Security and Research Rana Tanveer Hussain, where he advocated for targeted relief for the agricultural sector.

“The government must take concrete steps to reduce the cost of cultivation. Fertiliser prices should also be brought down by offering tax relief,” Mr Jawad said. He emphasised that the federal government still holds the authority to reduce the cost of production for farmers.

The food minister said his ministry was actively working on eliminating the 18pc GST on local cotton.“ He further noted that efforts are underway to resolve the pending cotton cess liabilities from the textile sector, ensuring the Central Cotton Committee does not face financial constraints.

“We are also considering limiting tax-free imports of yarn and fabric under the Export Facilitation Scheme (EFS) to support local cotton,” the minister said while noting that “this year, we are aiming to produce 10 million cotton bales, and making every effort to ensure that farmers receive relief in the upcoming budget.

The PBF delegation also recommended that new research and seed varieties developed by the Pakistan Agricultural Research Council (PARC) be implemented at the district level through local agriculture departments. “At present, we are unaware of the latest research being conducted in Islamabad. The ministry should work with provincial governments to bridge this gap,” he added. The PBF welcomed the government’s decision to allow the import of cotton seeds and proposed that legislation be introduced to ensure local banks provide loans to the SME sector. “Many banks are hesitant to lend to small industries. This matter should be raised at the federal cabinet level,” he concluded.

Published in Dawn, May 29th, 2025