Acting President, Islamabad Chamber of Commerce and Industry, Sheikh Pervez Ahmed urged the government to bring the agricultural sector into the tax net in the forthcoming budget.
He observed that the agriculture sector was playing a major role in generating business, economic activities and providing jobs to majority of rural population, but was paying negligible amount to the tax revenue which was not justified, “The agriculture sector was contributing about one-fifth of the domestic output but was generating less than 0.1% of the total tax revenue.”
“Due to which the country’s revenue and fiscal deficits were on the rise, making Pakistan’s tax revenue collection one of the lowest in the region,” Sheikh Pervez said on Monday.
He said after the 18th constitutional amendment, agriculture sector was devolved to the provinces and provincial governments were expected to bring agriculture income into the tax net.
However, due to the unwillingness of the provinces to tax agriculture income, the country has become dependent on foreign borrowings which would jeopardize the future.
He said the present government enjoyed two third of the majority in the parliament and was in a good position to enact laws to bring agriculture income into the tax net.
Sheikh Pervez Ahmed claimed that the current taxation system was unfair and inequitable as it heavily taxed the industrial sector whereas the services and agriculture sectors were enjoying many tax exemptions despite the fact that they were making significant contribution to the GDP of the country.
He also called for simplify the current complex tax system, adding that lower tax rates and levy tax on agriculture income that would help in generating trillions of rupees as tax revenue for the country.