ISLAMABD / PESHAWAR / MULTAN : August 28, 2024 : On the call of All Pakistan Fertilizer Dealers Association (APFDA), fertilizer dealers have observed a countrywide shutter down strike today (Wednesday) . The dealers are demanding withdrawal of implementation of section 236-H on the sale of fertilizers. Seeing the government’s indifference to its demand, APFDA had given a call for the countrywide strike against inclusion of the sale of fertilizers in section 236-H in the Finance Bill 2024-25. Under the section 236-H of the Finance Bill, the dealers are required to collect withholding tax from the growers under two slabs. For growers who are non-filers are required to pay withholding tax at the rate of 2.5 % whereas the growers who are filers have to pay withholding tax on purchase of fertilizer at 0.5 percent.
Since majority of the growers are non-filers , they will have to pay 2.5 % withholding tax on purchase of the fertilizers. The government decision to include fertilizers sale in section 236-H and force the dealers to collect 2.5 % withholding tax from the growers on the sale of fertilizer will add around Rs 300 to the price of a urea bag and will add to the growers community’s woes as they are already protesting against higher agri input costs and they are demanding relief from the government. Imposition of withholding tax on fertilizers’ sale will cause irreparable loss to the agriculture sector. Fearing negative impact and systematic complications , APFDA has rejected imposition of withholding tax on the sale of fertilizers. The government decision to include the sale of fertilizers in withholding regime is a dangerous move. It will damage the agriculture sector and subsequently undermine Pakistan’s exports of agri produces which can deprive Pakistan of huge foreign exchange. Currently, Pakistan is earning sizeable foreign exchange through export of agri produces.
Imposition of withholding tax on sale of the fertilizers is against the government’s declared policy. In recent weeks, the federal and provincial governments had announced to introduce relief in taxes for agriculture sector. Inclusion of the sale of fertilizers in Section 236-H of the Finance Bill 2024-25 indicates that the Finance minister, Mohammad Aurangzeb, who is a banker by his profession , has no background of the agriculture sector and he is also not aware of the bottlenecks which are being faced by the farming community of Pakistan. There is no practice worldwide that any government in any country ever imposed withholding tax on the sale of agri inputs including the fertilizers.
Giving his reaction on today’s strike ,APFDA pattern- in- Chief Mr Ghulam Ahmad , said “ The fertilizer dealers are on shutter down strike across Pakistan today against the government decision to include the sale of fertilizers in Section 236-H and they will not accept it in any case”. Mr Ghulam Ahmad called today’s shutter down strike of the fertilizer dealers as a great success and noted that APFDA afwill announce the future line of action after consultation with all representative bodies of the fertilizer dealers in a couple of days.
