Islamabad: Prime Minister Syed Yusuf Raza Gilani has said that a uniform tax policy on agriculture is being evolved to bring agriculture sector within the tax net across the four provinces. Federal and the provincial governments, he said, are already consulting relevant stakeholders and representatives of the agricultural community to seek their inputs for formulation of the proposed tax policy. He said that he has directed the finance team to find out the reasons behind undue price hike of agri-inputs.
The Prime Minister expressed these views while addressing a group of MNAs in the Committee Room of the Parliament House this afternoon.
The Prime Minister apprised the MNAs that the interests of the small landholders will be protected in the proposed taxation system. He said that the concern of members of the Parliament belonging to rural areas about the sales tax on agriculture inputs is understandable and the government would make sure to facilitate the farmers as they are the backbone of economy.
The Prime Minister apprised the members of the Parliament that the government has earmarked an amount of Rs 730 billion in the next year PSDP, the major portion of which would go to the provinces. He said that Rs. 500 billion extra would be given to the provinces under the 7th NFC award, which would accelerate the pace of development of the infrastructure in the country. He apprised the members that the government also allocated Rs. 32.5 billion in order to fast-track power and water projects to make up for energy deficits in the country. He stated that due to global recession, fuel prices increased from 30 dollars in 2008 to 120 dollars per barrel. Devastating floods and heavy expenditure on security have put additional burden on the economy, he added.
The Prime Minister said that despite devolution of a number of ministries to the provinces along with their assets, the Federal Government would continue to bear expenditure of Rs 35 billion on salaries to the employees of these devolved Ministries. He further said that the compensation of Rs 20,000/- disbursed to the flood affectees was also paid by the Federal Government and the efforts are afoot to pay the remaining amount.
The Prime Minister also told the members that the government has substantially increased the pay of the armed forces, police and the government employees during last three years, which is unprecedented. He said that tax culture is non-existent in the country but to achieve self-reliance, the government is making serious efforts to improve tax to GDP ratio.
He asked the members to ponder over ways and means to expand tax net while keeping in view the fact that its burden is not imposed on small land holders. He said that he has convened another meeting of members of the Parliament, finance team along with the ministers of Industry, Commerce and Trade and Petroleum and Natural Resources to address the issue of price increase of agri-inputs through holistic policy action.
Minister for Finance Dr Abdul Hafeez Shaikh apprised the members that the finance team has already been instructed to investigate undue increase in the prices of tractor, agri- machinery, fertilizer and pesticides. He stressed upon the need to evolve a system which may not hurt the small land owners.
The members of the Parliament, belonging to agricultural class, stated that Pakistan is an agrarian economy and 70% of our population is living in the rural areas. They said that any taxation beyond the capacity of the rural population will lead to multifarious problems. They pointed out that the last year’s devastating floods have already impoverished the agricultural sector. Therefore, interest of the subsistence farmers, they added, should be kept in view while imposing any new tax. They maintained that GST on agriculture inputs means a tax on means of production.
The meeting was attended by the Minister for Finance Dr Abdul Hafeez Shaikh, Minister for Kashmir Affairs and Northern Areas Mian Manzoor Ahmed Wattoo, Minister for Water and Power Syed Naveed Qamar, Minister for Religious Affairs Syed Khursheed Shah, Minister of State for Foreign Affairs Ms Hina Rabbani Khar, Deputy Chairman Planning Commission Dr. Nadeem ul Haq, Mr Nadeem Afzal Chan MNA, Mr Tariq Mehmood Bajwa MNA, Rana Muhammad Saeed Khan MNA, Mr Nazar Muhammad Gondal MNA, Mr Sajjad ul Hassan MNA, Mr Liaqat Ali Khan MNA, Capt (Retd) Rai Ghulam Mujtaba Kharal MNA, Syed Sumsam Ali Shah Bukhari MNA, Mr Mehmood Hayat Khan Alias Tochi Khan MNA, Mian Abdul Sattar MNA, Mr Jehangir Tareen MNA, Mr Javed Iqbal Warraich MNA, Mr Nazir Ahmed Bughio MNA, Mir Ejaz Hussain Jakhrani MNA, Syed Ghulam Mustafa Shah MNA, Syed Amir Ali Shah MNA, Nawab Muhammad Yousuf Talpur MNA, Nawab Abdul Ghani Talpur, Mr Roshan Uddin Junejo, MNA and senior officials of the Prime Minister’s Secretariat.
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