The federal government has decided to delay a planned increase in taxes on fertilizer and pesticides, offering temporary relief to the agriculture sector.
According to the latest development, the government has formally informed the IMF in writing that it is putting off the proposed tax hike for now.
The measures under consideration included a 5 percent increase in Federal Excise Duty on fertilizer and pesticides. However, the government has now decided to postpone the move.
Officials told the IMF that fertilizer carries strategic importance, which is why the increase in Federal Excise Duty is being deferred at this stage.
Pakistan has also informed the IMF about the sharp fluctuations in oil and fertilizer prices, which appear to have played a role in the decision to avoid further pressure on the farm sector.
The move is significant because any increase in taxes on fertilizer and pesticides would have added to input costs for farmers and could have further strained agricultural production.
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