LAHORE: Seed, rice and textile industries have decided to join hands for lobbying against imposition of 17% general sales tax on seed industry arguing the levy will negatively impact agriculture production as well as tax collection.
“The levy of 17% GST on locally produced or imported seed coupled with 3% additional tax on unregistered seed firms will have a cumulative effect of 25% on farmers, leading to hike in their cost of production, endangering national food security and hurting research & development efforts in the agriculture sector,” Hi-tech Hybrid Seed Association (PHHSA) president Shehzad Ali Malik said at a media briefing here on Wednesday.
Rice Exporters Association (Reap) chairman Ali Hussam Asghar was also present, who claimed that the All-Pakistan Textile Mills Association (Aptma) has also assured its support for the cause.
“We’ve planned that a representative delegation of all three associations will call on Federal Finance Minister Shaukat Tarin, Advisor to PM on Commerce Razzaq Dawood, National Food Security & Research Fakhar Imam as well as the Federal Board of Revenue chairman to inform them that the taxes will impact the agriculture sector hard,” said Malik.
A presentation containing all local and international data was being prepared for their briefing, he added.
He feared that the taxation would lead to a drop in the total tax collection because the farming community would abandon the certified seed and turn towards informal sources for meeting their seed requirements which would ultimately result in reduced per acre agriculture output.
He said that to improve agriculture output the government was advocating for adopting Chinese model, which succeeded on the basis of cheap hybrid wheat, rice and cotton seeds, while here the government was taxing and thus dis-incentivizing the seed industry.
Malik suggested that the government should at least exempt the local seed developers from the GST and impose it only on the seed importers, if it had to, for encouraging transfer of hybrid seed technology and local production of seeds.
Asghar announced his association’s support for the cause of the PHHSA and assured the seed industry that the Aptma had also been taken on board and it would too be part of the lobbying against the 17% GST on seed.
He said through hybrid seed the country was able to increase its rice production from around 4.83 million tonnes to 8.14mt in a decade that made available export surplus and rice exports shot up from a mere $300 million to over $2.3 billion.
He said this year the country could have exported more had there not been the container availability problem.
“For exporting more we need to grow more and for the purpose promotion of hi-tech hybrid seeds is a must and the government should exempt the whole seed industry, including importers, from the GST.”
PHHSA senior vice-chairman Dr Shafiqur Rehman said hybrid maize is another success story in the country as locally developed seeds of the crop increased per acre yield from 47 to 60 maunds per acre.
He said local seed companies are taking care of the smallholders as the poultry sector which is developing at an annual rate of 11 to 12% and needs more and more maize production.
He warned that the country would need to import maize next year if local production failed to achieve 8.0mt target.
