Pakistan plans to implement a track and trace system (TTS) to prevent tax evasion in the local cotton and ginning industry, announced RanaTanveerHussain, Minister for Industry and Production and National Food Security and Research at a meeting with the Pakistan Cotton Ginners Association (PCGA).
Emphasising the critical role of the industry in the rural economy,Hussain highlighted its potential to generate employment for the skilled and semi-skilled workforce. The meeting also addressed concerns regarding additional taxation on cotton seed in the federal budget for FY2024-25.
Hussain stated, application of the TTS to locally produced cotton bales would help prevent tax evasion and protect both local farming communities and the industrial sector. The government also plans to enforce the Cotton Control Act in collaboration with provincial governments, he added besides assuring the delegation of considering proposals regarding sales tax on seed cotton and cotton seed cake.
Further, the minister pledged to discuss the new taxation measures with the Finance Division and Federal Board of Revenue to address the challenges faced by the local ginning industry. During the meeting representatives from the Cotton Ginners Association called for the rationalisation of taxes to benefit the local industrial sector and promote cotton crop output.
The delegation noted, having produced over 8.4 million cotton bales last season, Pakistancould potentially increase this crop output to 20 million bales with supportive policies. Rationalising sales tax will enhance tax compliance and help curb tax evasion in the country, it added.
