Ministry of National Food Security & Research (NFS&R) has practically launched its Agriculture Fiscal Package for the financial year 2020-21. Finance Division has released funds for the White Fly Pesticide subsidy. The quantum of this subsidy is Rs. 6 billion (bn). The provinces will disburse this subsidy to registered growers. The Sales Tax subsidy on locally manufactured tractors is also being disbursed.
There are two main manufacturing units in Pakistan viz. Massey Ferguson and Al-Ghazi having market share of 60% & 40%, respectively. At present 5% sales tax is applied on the sale of each tractor. Annual sale of both the units during 2019 was 41,000 units and average sales tax is around Rs.60.000 per tractor. Sales tax subsidy to locally manufactured tractors is being offered for one year. The total cost of subsidy is Rs.1.5 billion. Federal Board of Revenue will notify GST subsidy (set aside 5% GST on locally manufactured tractors for one year). Local Tractor manufacturers will report to FBR and the Ministry on 5th day of every following month. Ministry of National Food Security & Research may ensure through Forensic Audit on quarterly basis to confirm proper utilization of the subsidy for the benefit of farmers.
The Agriculture Fiscal Package was announced by the Prime Minister in wake of Covid-19 pandemic. Mechanism has been developed for mark-up subsidy on all loans for 12.5 acres of land holding, disbursed by ZTBL with pass book as collateral, during financial year 2020-21 only. An amount of Rs. 6.861 Billion (bn) has been allocated. All Agri-loans (Production & Development) shall be eligible under the subsidy scheme. Loans disbursed during fiscal year 2020-21 and outstanding as of June 30th, 2020 (for which mark-up will be accrued during July 1, 2020 to June 30, 2021) shall be eligible in the subject scheme. The borrowers availing any other subsidy scheme shall not be eligible for this scheme. The defaulted borrowers, who repay/settle their loans, shall be eligible for the scheme for the subsidy period. The borrowers availing deferment/re-schedulement facility of State Bank of Pakistan shall be eligible for this scheme.
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