Islamabad June 06 2021: Government has shown its willingness to increase Sales Tax on fertilizer to 10 percent from its present rate of 2 percent in talks with International Monetary Fund. This would allow government to raise an additional amount of PKR35 billion during the next fiscal year.
As a result Urea prices go up by a massive PKR130 per bag while Diammonium Phosphate (DAP) prices significantly surged by PKR450 per bag.
Earlier, IMF has emphasized to bring reform in order to broaden the General Sales Tax (GST) base and enhance coordination between Federal and Provincial governments. In specific these reforms will eliminate preferential rates and tax exemptions, and conveyed to bring those rates to standard rate of 17 percent. IMF asked authorities to bring in reforms to harmonize the services GST across provinces with the help of World Bank.
This is at a time when government is aiming to enhance productivity of wheat by 41 percent, rice 40 percent, cotton 65 percent, maize 40 percent, sugar 22 percent, and other crops 30 percent. For turning this to reality government is likely to introduce Agriculture Transformation plan in the upcoming budget.
