Dairy, agriculture get major tax cuts

ISLAMABAD: The government has proposed in the budget for 2018-19 a number of tax cut measures, expected to provide relief to the common man, including reduction in duty on agriculture and dairy items.

In his budget speech, Federal Minister Miftah Ismail announced reduction in rate of sales tax to 3 percent across the board on all fertilizers to promote agriculture growth. It is also proposed that the rate of sales tax on supply of natural gas to fertilizer plants for use as feed stock, presently, chargeable @10 percent, may be reduced to 5 percent cater for cash flow issues of fertilizer manufacturers in view of reduction in rate of sales tax on fertilizers.

Similarly, rate of sales tax on LNG imported by fertilizer manufactures for use as feed stock is also proposed to be reduced from 5 percent to 0 percent. To fish farming, 10 percent duty on sales tax on fish feed is being removed. Similarly, sales tax is being exempted for preparation of fans and animal feed of dairy farms.

In addition, sales tax on agriculture machinery is proposed to be reduced from 7 per cent to 5 percent. These proposed measures are expected to go a long way in promoting agriculture, dairy and livestock sectors. Customs duty of 3 percent on import of bulls for breeding is proposed to be withdrawn.

Moreover, presently available concessionary rate of customs duty on the import of feeds meant for livestock sector may be further reduced from 10 percent to 5 percent. The 3 percent value addition tax on second clothes and shoes, the minister noted, was proposed to be done away with besides abolition of sales tax on import of 21 components for preparation and assembling of laptop and computer. There was also a proposal to revive zero-rating on local stationery items.

The minister said that customs duty on cancer-related medicines was proposed to be abolished while there was a proposal to reduce customs duty to 3 per cent on eye glasses. All these measures are believed to positively impact the common man.