THE challenge of collecting agriculture tax is a significant one for the Federal Board of Revenue (FBR). However, overlooking this issue and failing to find an effective way to collect tax from the farm sector in the country any further would be like committing economic suicide, as the sector constitutes a substantial portion of the economy.

One potential solution for collecting agriculture tax from farmers could be adapted from the current model that is used by retailers who obtain CNIC copies from consumers when purchases exceed Rs50,000.

A such, in the agriculture sector, a similar method could be implemented with a focus on pesticides, which is a core input. Pesticides are essential for every farmer, and their regular purchase offers a viable point of taxation.

The FBR should implement a system where CNIC copies are obtained from those who purchase pesticides above a certain predefined threshold. The data collected through the process could provide insights into the projected yield of each farmer. Based on this data, a fixed tax could be applied and collected accordingly.

Moreover, while the collection process may initially face some challenges due to corruption as well as lack of direction, systematic and consistent collection of data could eventually lead to a more substantial revenue stream for the government. Over time, as the data pool grows and the system becomes more refined and effective, this method could significantly enhance tax collection from the agriculture sector. Finally, this will contribute to the overall economic stability and growth of the country.

Ahmer N. Jakartawala
Karachi

Published in Dawn, August 1st, 2024