LAHORE – In a meeting of Farmers Associates Pakistan (FAP) board of directors held under the chairmanship of FAP Vice Chairman Syed Hussain Jahania Gardezi, the members expressed strong reservations on the government’s decision to levy 3.5 percent withholding tax (WHT) on agriculture produce. FAP Spokesman Dr Mohammad Tariq Bucha blamed members of the bureaucracy for creating such an anomaly totally detrimental to the interest of farmers and the agricultural sector. The government contention that this levy is on middleman is unjustified because no farmer sells his produce directly to consumers as no appropriate marketing system is available.
Bucha went on to say that the FBR has secretly imposed the 3.5 percent WHT on agriculture produce through a SRO 1161(I) 2010 issued on 31 December, 2010 applicable from 1 January, 2011.
There was consensus that the SRO will apparently bring great loss and damage to the liquidity of farmer as the middleman will either stop purchasing or will apply 3.5 percent WHT on the farmer’s produce, thereby reducing his gains. They went on to say that this notification is self contradictory given that in sub-section (b), agriculture produce had been exempted from tax and the imposition of the withholding tax will run contrary to the exemption. The spokesman said Pakistan’s policy makers seem totally oblivious to ground realities and make policies which turn out to be anti-farmer while totally ignoring the consideration, facilities, concessions and incentives provided to the farmers around the world including India.
The meeting concluded when members called upon the government to immediately take action and direct the Federal Board of Revenue to withdraw the SRO to preserve the interests and livelihood of farmers.
