Consultative Meetings with Stakeholders
The National Assembly Standing Committee on National Food Security and Research has directed the Federal Board of Revenue (FBR) to seek the viewpoint of the International Monetary Fund (IMF) if current tax policies fail to generate sufficient revenue and continue to negatively impact the cotton sector.
During a recent meeting, the Standing Committee also instructed the Ministry of National Food Security and Research to conduct consultative meetings with all relevant stakeholders, including the Ministry of Law and Justice. The Ministry is expected to provide updates on recommendations aimed at resolving key issues affecting the agricultural sector.
Review of Pakistan Animal Science Council Bill, 2024
Furthermore, the Ministry of National Food Security and Research has been tasked with formally requesting the Ministry of Law and Justice to review “The Pakistan Animal Science Council Bill, 2024.” The review should determine whether the Bill falls under the Federation’s jurisdiction as per Article 144 of the Constitution and whether Cabinet approval is necessary for a Private Member Bill.
Addressing Disparities in Cotton Taxation
A key concern raised during the meeting was the disparity in tax rates between imported and locally produced cotton. The Standing Committee has sought recommendations on eliminating these discrepancies to create a more balanced taxation structure.
Comprehensive Report on Cotton Sector
The FBR has been directed to submit a comprehensive report on various aspects of the cotton sector. This report should include data on sales tax collected and refunded over the past five years, import and export figures, potential revenue losses due to the existing tax system, and an economic analysis of the industry. Additionally, the FBR must provide updates on the implementation of track and trace systems and RFID technology to control production and monitor sales effectively.
In a letter issued to the relevant ministries, the Committee Secretariat emphasized that if existing tax policies are ineffective in generating revenue and continue to harm the cotton sector, the FBR must consult with the Ministry of Commerce and engage with the IMF to explore potential policy adjustments.
Relief Measures for the Agricultural Sector
Recognizing the financial challenges faced by the agricultural sector, the Ministry of Energy (Power Division) has been asked to develop immediate relief measures for farmers struggling with high electricity costs. These proposals should focus on short-term solutions to ease the financial burden, especially in light of ongoing efforts such as the cancellation of contracts with five Independent Power Producers (IPPs).
Addressing Over-Billing Concerns
Additionally, the Ministry of Energy has been directed to submit a detailed report on the over-billing practices of electricity distribution companies. This report should outline the criteria used for over-billing, the mechanisms available for addressing complaints, and the actions taken against those responsible for excessive billing.
Next Steps
To ensure accountability and transparency, the Standing Committee has instructed that all Chief Executive Officers (CEOs) of Distribution Companies (Discos) attend the next meeting via Zoom. They are expected to provide a comprehensive explanation of the over-billing issue and participate in discussions aimed at identifying viable solutions.
By addressing tax policy concerns, engaging with international financial institutions, and implementing sector-specific relief measures, the government aims to safeguard the interests of the cotton industry and the broader agricultural sector.
