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10% Sales Tax Crushes Tractor Industry

10% Sales Tax Crushes Tractor Industry

July 27, 2024 by shoaibayan463

An acute crisis is observed in the manufacturing of tractors and their parts that play an important role in the economy of the country. The export value of this sector is $20 million, the number of supported vendors is 200, current employment – 200 thousand people, while the level of sector’s localization is at 95%. The troubles started with the propose of imposing a 10% sales tax on tractors from the start of the June of 2024. Earlier, tractors used to enjoy tax free status, which helped organizations like Millat Tractors Limited (MTL) to work efficiently. This new tax policy has put MTL back to the refund regime a situation that the company experienced after the passing of SRO 363 that set a refunding mechanism that was to be effective within a span of three months. More twists were introduced early in 2022 when SRO 563 (1)/2022 placed conditions for tractor buyers, for refund only to be made to farmers with authentic land documents. This left out many people as they could not meet the set standards/demands. However, the industry has failed in realizing the refunds the same as the required conditions have been met due to which the industry has been affected financially severely. Recently, Millat Tractors has entertained a delegation from Pakistan Association of Automotive Part & Accessories Manufactures (PAAPAM) led by its Chairman Abdul rehman Aizaz and Sr. Vice Mshad Ali where these crucial focal issues were explained. They termed it as very important and said that two months have passed after the budget announcement and FBR has even not come up with the method for the process of sale tax refund despite of letters and appeals. Thus, specific MTL operations have been temporarily shutdown from the July 1st, without orders or invoices, and the company loss much more than last year when it was selling 30,000 units.

An acute crisis is observed in the manufacturing of tractors … Read more

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