Imposition of 17pc sales tax on seeds flayed

ISLAMABAD - Pakistan Hi-Tech Hybrid Seed Association (PHHSA), terming the imposition of 17 per cent sales tax on seeds as last nail in the coffin of the industry, has said it will negatively impact the access to quality seeds due to increased cost to seed industry, farmers and end users.

The observation was passed at the first executive committee meeting of the newly formed Association held the other day with its founding chairman Shahzad Ali Malik in the chair. The meeting was attended by its executive committee members. The chairman briefed on future plan of action for the advocacy and promotion of the hybrid seed sector and allied technology.  He said it is incumbent upon the members of the association to work for the common objectives of the hi-tech hybrid seed sector and to create congenial business environment. Lamenting levy of 17 per cent sales tax on the seed sector, he feared it may discourage use of hybrid seed and reduce yield of major crops like cotton, rice, wheat, maize, vegetable and edible oil etc. The levy of 17% 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 FPCCI and Pakistan Hi-Tech Hybrid Seed Association.

‘It is misfortune that the very first adventure for PHHSA soon after grant of trade body license is to resist this sales tax levy by giving logical and convincing argument to the decision makers,’ he added.PHHSA is committed to achieve import substitution and production of local quality seeds at affordable prices and explore export targets provided government patronize the sector by introducing proper incentives schemes and regulatory reforms. Shahzad Ali Malik said during the recent years the pace of new hybrids is slow in Pakistan only because of lack of regulatory and fiscal incentives and there seems challenges for PHHSA to act as game changer for turning local production of hybrid seed which will require huge investment on R&D.

He urged the government to immediately withdraw the 17% sales tax on seed sector which is backbone of agriculture and GDP of Pakistan having direct bearing on the livelihood of poor farmers and middle class depending mainly on agriculture sector and produce. He said there is zero sales tax on seeds in India and same is the case with Thailand and other seed exporting and importing countries. PHHSA executive committee had detailed deliberations and devises a strategy to persuade FBR Chairman, Finance Minister, Food & Agriculture Minister and the Prime Minister for withdrawal of this sales tax levy.


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