Millat Tractors’ 10-day shutdown: the story behind the decision

Millat Tractors recently hit the brakes on its operations for 10 days, only to restart production shortly after. The company cited financial strain and tax headaches. But is this the full story, or just another chapter in a long-running saga of finger-pointing?

When the government rolled out its latest budget, the agricultural sector took a hit. Historically, many of its inputs had enjoyed tax exemptions or zero-rated status. This year, the government shifted gears, slapping a reduced sales tax on these inputs. Tractors, which had long benefited from a zero-tax bracket, suddenly found themselves under the tax hammer.

Within two months, the cracks began to show. The industry was rattled as manufacturers struggled to get their due sales tax refunds from the Federal Board of Revenue (FBR). Millat Tractors, one of Pakistan's largest tractor manufacturers, was the first to cry foul. With no mechanism in sight for refund disbursements, the company saw no choice but to shut its doors temporarily.

But was this shutdown just about taxes, or is there more to the story?