Sources told Business Recorder here on Wednesday that the FBR is expected to propose measures to encourage domestic industries like dairy, stationery, agriculture and livestock sectors.
The livestock sector continues to be the largest sub-sector of agriculture in Pakistan. It provides livelihood and employment to millions in the rural areas of the country and the commitment of the government to sustain it remains a key aspect element to alleviate poverty. To sustain the growth in this vital sector of the economy and provide further relief, the FBR is examining different budget proposals.
According to sources, budget-makers are reviewing to continue zero-rating regime for the dairy industry as part of Finance Bill 2019-20. The industry has proposed one national food standards implementation by all provinces.
The FBR is also planning to clear billion of rupees outstanding sales tax refunds of the dairy industry, sources said.
The budget-makers are reviewing proposals which are critical for livestock farms competitiveness & development. The FBR is considering zero-rating on dairy farms livestock feed resources, zero-rating on local semen production (high priority sector) for 10 years, dairy industry tax benefit to support farmers for breed improvement and exemption of sales tax on local & imported semen.
In budget (2018-19), sales tax was exempted for preparation of fans and animal feed of dairy farms. In addition, sales tax on agriculture machinery was reduced from 7% to 5%, as these proposed measures are expected to go a long way in promoting the agriculture, dairy and livestock sectors.
The multiple food regulatory regimes resulted in trade barriers among provinces, complex regulatory landscape, increased cost of doing business, negative impact on sales and new investments, and limiting exports.
In budget (2018-19), customs duty of 3% on import of bulls meant for breeding was withdrawn, concessionary rate of customs duty on the import of feeds meant for livestock sector was further reduced from 10% to 5% and fans meant for use in dairy farms were allowed at concessionary rate of 3% to members of the Corporate Dairy Association. This has been instrumental in substantially reducing their cost of inputs and boosting further expansion.