Minister for Industry and Production and National Food Security and Research Rana Tanveer Hussain on Friday said that the government has decided to introduce the track and trace system (TTS) in the local cotton and ginning industry aimed at avoiding tax evasion.
Talking to a delegation of the Pakistan Cotton Ginners Association (PCGA), the minister said that the cotton industry has a pivotal role in the rural economy and the potential to provide employment opportunities for a large portion of the skilled and semi-skilled workforce in the country.
The meeting discussed matters relating to additional taxation measures on cotton seed in the federal budget for FY2024-25, according to a press release.
The minister said that a TTS will be implemented on locally produced cotton bales in order to avoid tax evasion to protect local farming communities as well as the industrial sector of the country.
Rana Tanvir Hussain said that the Cotton Control Act will be implemented in real terms in collaboration with the provincial governments and assured the delegation that their proposals regarding sales tax on seed cotton and cotton seed cake will be considered.
The minister also assured the delegation that the matter of new taxation measures will be taken up with the Finance Division and Federal Board of Revenue for consideration to address the issues faced by the local ginning industry.
Speaking on the occasion, the representatives of the Cotton Ginners Association apprised the minister about the additional taxation on cotton products and said that heavy taxes were affecting the production of the cotton ginning industry.
They urged the need for rationalisation of taxation on these commodities for the benefit of the local industrial sector as well as promoting cotton crop output in the country.
They said that the rationalization of sales tax would enhance tax compliance culture in the country, besides helping to curb increasing tax evasion in the country.
The delegation apprised the meeting that over 8.4 million cotton bales were produced in the country during the last season, adding that there was potential to enhance crop output by up to 20 million bales by encouraging policy.
