Tax on middlemen opposed by
The recently-imposed tax on commission netted by middlemen
from growers is likely to put the burden on final consumers
of food items.
“The government is trying to fool us, claiming the tax will
not be applicable on growers,” said Sindh Abadgar Board
President Abdul Majeed Nizamani, adding that it was just
another indirect tax on agriculture. “A commission agent
charges farmers around eight per cent of the amount paid for
purchase of farm produce. Now the same grower will have to
let the agent deduct 18 per cent from that amount.”
A circular issued by the Federal Board of Revenue (FBR) on
Saturday had announced the new 10 per cent advance tax or
brokerage fee on middlemen, and withholding tax of 1.5 per
cent on sale of cotton seeds, rice and edible oils.
Nizamani expressed disappointment at the decision, saying it
had become impossible for a new tax to be levied without
growers being affected.
An office-bearer of Sabzimandi Hyderabad’s Commission Agents
Union espoused Nizamani’s views on the issue, saying that
the commission agents spend over half of the amount charged
from growers on expenditures.
“Out of the eight per cent we earn from transactions, around
four per cent is spent on transport and other expenditures.
Therefore, it is beyond the realms of possibility for us to
pay the tax from our pocket,” said the agent, adding that
the burden would definitely be passed on to the growers, and
ultimately, the final consumer.
Another agent maintained that they were already paying
multiple taxes including income tax, market committee tax,
and professional tax. “A new tax to the tune of 10 per cent
on top of the eight per cent commission earned by the agents
is nothing but irrational,” said Hyderabad Chamber of
Commerce and Industry former vice president Javed Ahmed. He
added that the impact of the levy would definitely be passed
on to the final consumer, leading to an inevitable surge in
Courtesy: The Express Tribune
However, Sindh Chamber of Agriculture has said it will come
with a complete response to the new tax after their meeting
scheduled for Friday. “Although we reject the withdrawal of
subsidies and the imposition of new taxes, we have called a
meeting on Friday; we will also consult growers in Punjab to
deliberate on the issue,” said chamber president Muhammad
Growers have already expressed dismay over a host of
government policies deemed detrimental for their sector.
Withdrawal of the government subsidy and successive hikes in
petroleum prices have already negatively impacted the
In its monthly meeting, the Sindh Abadgar Board strongly
demanded withdrawal of taxes on fertilisers, pesticides,
hybrid seeds, and agricultural machinery.