LAHORE   -  Senior vice president of the Lahore Chamber of Commerce and Industry, Zafar Mahmood Chaudhry has urged the government to take immediate steps to revitalise the tractor industry, which is currently facing severe challenges. He made this appeal during a meeting with a delegation led by Muhammad Naeem, Vice President of the Tractors Dealers Association of Pakistan.

The delegation informed the senior vice president that due to the lack of clarity in the policy regarding General Sales Tax (GST) on tractors by the Ministry of Finance and the Federal Board of Revenue (FBR), several plants in the tractor industry have been shut down, potentially leading to the unemployment of millions of households. The delegation further highlighted that, in a country where many mills and factories are already closed, unemployment and inflation have made life difficult for the public, and now even operational units are being forced to shut down.

As of June 30, 2022, the GST on tractors was 5%, and the tax on parts was 17%. Currently, billions of rupees are owed by the FBR, which have yet to be paid. The FBR has stated that the tax is 5% on agricultural tractors and 18% on non-agricultural tractors.

The delegation further informed that the tax on tractors was eliminated from July 1, 2022, to June 30, 2024, but a 10% tax on tractors was re-imposed starting July 1, 2024. Now, the tax on parts is 18%, and the tax on tractors is 10%. Due to the lack of a clear policy from the FBR, uncertainty regarding refunds has arisen. The Millat Tractors Association of Pakistan has made a strong appeal to the government to promptly provide a clear policy so that the closed plants of the tractor industry can reopen and unemployment can be reduced.