Imposition of 17% sales tax damaging hybridisation in country: official

LAHORE: The imposition of 17 per cent sales tax on seeds as it will negatively impact the process of hybridisation in the country, an official said on Tuesday.

Pakistan Hi-Tech Hybrid Seed Association (PHHSA) founding Chairman Shahzad Ali Malik while chairing the first executive committee meeting of the newly formed association, briefed the participants about the future plan of action for the advocacy and promotion of the hybrid seed sector and allied technology.

“We now have a big responsibility to meet the aspiration of our members and align our goals with the national economic agenda,” Malik said, adding that there was a need to create a congenial business environment through ease of doing business and friendly regulatory framework.

He feared that the 17 per cent sales tax on the seed sector will discourage use of hybrid seed and reduce yield of major crops like cotton, rice, wheat, maize, vegetable and edible oil.

The imposition of 17 per cent sales tax has created unrest amongst all stakeholders especially Rice Exporters Association of Pakistan and All Pakistan Textile Mills Association, Crop Life Association, Farmers Associations and the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and Pakistan Hi-Tech Hybrid Seed Association, he said.

“It is unfortunate that the very first adventure for PHHSA soon after the grant of trade body licence is to resist this sales tax by giving logical and convincing arguments to the decision makers,” Malik added.

The PHHSA is committed to achieve import substitution and production of local quality seeds at affordable prices and explore export targets provided the government patronises the sector by introducing proper incentives schemes and regulatory reforms.

Malik said that the pace of new hybrids is slow in Pakistan only due to the lack of regulatory and fiscal incentives.

Challenges for the PHHSA are to encourage local production of hybrid seed which will require huge investment on research and development.

He urged the government to immediately withdraw the 17 per cent sales tax on seed sector which is the backbone of agriculture, adding that there is zero sales tax on seeds in India and the same is the case with Thailand and other seed exporting and importing countries.