TPSF has been working closely with PAC members to collate inputs on fiscal recommendations for the agricultural sector. TPSF is a stakeholder in the national budget cycle involved at various stages including Task-Force for Tax Reforms under Ministry of Finance, the Think-Tank under the Minister of Finance and Parliamentary Permanent Committee on Budget. TPSF would like to highlight the following positive changes in the budget pertaining to the agricultural sector which are part of what TPSF on behalf of the PAC took to the discussion table:
• Reduction of cess from 5% to 2% for food crops, and from 5% to 3% for cash crops
• Exemption of VAT on capital goods to reduce importation costs on machines and plants used in strategic industries e.g. edible oil, leather, textiles and pharmaceuticals
• Exemption of VAT on locally produced compounded animal feed
• Abolishment of various fees and levies related to agriculture, e.g. inspection fees charged by TBS on fertilizer and cash crops
More broadly, TPSF has also been conducting advocacy for other changes that were successfully passed in this budget. These include;
• Zero-rating of VAT on ancillary transport services for goods in transit to reduce the costs incurred by transporters when using our ports and make them more affordable and competitive.
• Exemption of VAT on fertilized eggs for incubation in support for growth of domestic poultry sector
• Lowering of excise rates for locally manufactured products as well as encouraging local content in large scale manufacturing sections
• Stay of application for the 10% excise duty on importation of crude edible oil awaiting a comprehensive sector analysis on the effectiveness of the measure and recommendation of alternative that will spur domestic production without hampering the existing processing capacities.
We are very delighted to see these and other indications of positive changes and to get commitment from the government to work continuously to improve the business environment.