Daily Times

ISLAMABAD: The Rs 600 billion agriculture package announced by the government for farmers in the current budget has come into force after the Acting President Raza Rabbani signed the budget document.

The Rs 600 billion agriculture relief package and other incentives for the agriculture sector spelt out in the Finance Act 2016 start being implemented from Saturday with a yes nod from Acting President Mian Raza Rabbani on Friday.

“The relief package and other incentives stand applied to sugar, pesticides, agriculture tractors, Urea fertilizer, mobile phones and aerated waters & beverages and cement sectors”

In his budget wind-up speech, Finance Minister Ishaq Dar had announced that the agriculture relief package would come into force before the start of July in order to facilitate the farmers in purchasing inputs before the Eid holidays.

The sales tax on pesticides and their active ingredients has been abolished with effect from Saturday. Similarly, locally manufactured and imported agriculture tractors that were subject to 10 per cent sales tax shall now be taxed at the rate of five per cent.

The sales tax on urea fertilizer has been reduced to five per cent from the standard 17 per cent. The tax reduction along with a subsidy will bring down urea prices by Rs 390 per 50kg bag.

However, the federal government has given its share of subsidies in the shape of reduction in sales tax. It will not provide cash, unlike the provinces that will give a cash subsidy..

The important measures that will be taken from the new fiscal year include powers to open up to 10-year-old accounts of companies and individuals, linking the tax-free cash withdrawal and banking transactions of Rs50,000 with a single CNIC, increase in tax rates on insurance of business and withdrawal of group tax relief facility.