FMPAC riles over non-disbursement of fertilizer subsidy claims

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Karachi: On Tuesday, Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC) denounced the government for not having disbursed the pending claims to the fertilizer industry.

Last month, the PM’s office had instructed the Ministry of National Food Security and Research (MNFSR) to release the outstanding amounts owed to the fertilizer industry, but till now they haven’t been disbursed said FMPAC.

The meeting held last month had issued directives to release 80pc of the claims at once and 20pc of those would be settled within a period of three months after third party go-ahead.

According to FMPAC, the finance division had already released the requisite amount, but the payments still remain outstanding and the excuse being cited is a lack of funds availability, FMPAC stated.

And the government recently introduced a new clause for subsidy mechanism, which would need the national tax number (NTN) of each fertilizer dealer for successful processing of claims.

But FMPAC mentioned that since 90pc of the fertilizer dealers weren’t registered with the tax authorities, this clause would make the scheme impractical.

FMPAC commented “Moreover, the subsidy claims are based on sales tax which has no relationship with the NTN. Hence, such a step may ultimately hamper the distribution of urea denying the subsidy-benefits to the farmers.”

Terms of reference in regard to the third-party audit of fertilizer subsidy claims have also not been reached, said FMPAC.

FMPAC decried that fertilizer dealers are owed over Rs20b in subsidy claims, which was creating cash flow issues but the prices of urea were being kept low irrespective.