Fertiliser makers seek Rs70bn in tax refunds

LAHORE: Fertiliser manufacturers have urged the government to clear over Rs70 billion in sales tax refunds and subsidies pending since 2016, as the textile sector gets a boost from a new revival plan.

The Fertiliser Manufactures of Pakistan Advisory Council (FMPAC) said in a letter to Commerce Minister Ghaor Ijaz that the fertiliser sector plays a vital role in ensuring food security and supporting the agriculture sector, which accounts for nearly 20 percent of the country’s GDP.

The council said the fertiliser sector provides import substitution worth nearly $2.5 billion and offers fertilisers at affordable prices to the farmers, thereby contributing significantly to the agricultural sector’s growth.

However, the fertiliser sector faces its share of financial challenges, particularly in the form of long-outstanding sales tax refunds and subsidies. Considering that the fertiliser sector is one of the leading contributors to the national exchequer in the form of direct and indirect taxes.

FMPAC Executive Director Sher Sha Malik urged that, similar to the textile industry, the fertiliser sector should receive due support to alleviate its financial burdens and enable it to continue playing a crucial role in the national economy.

Specifically, the FMPAC is requesting the release of over Rs70 billion in sales tax refunds owed to the fertiliser sector over the past 5/6 years and an additional Rs19.2 billion on account of pending subsidy payments since 2017. The release of these long-outstanding legitimate claims in the current high-finance cost regime is essential to save the fertiliser sector from incurring substantial financial costs that could ultimately threaten its sustainability.

According to the details, Fauji Fertiliser claimed Rs18.97 billion in refunds owed to the FBR, Engro Fertiliser Rs12.41 billion, Fauji Fertiliser Bin Qasim Rs17.86 billion, Fatima Fertiliser Rs12.93 billion, Pakarab Fertilisers Rs3.48 billion, Fatimafert Rs2.77 billion, and Agritech Rs2.91 billion. The FMPAC had approached the former finance minister Dr Miftah Ismail in September 2022 for the release of their pending GST refunds with the FBR. However, no action was initiated on the request.

The FMPAC assured continued operation and its ability to fulfill its role in national economic development and food security. Providing this much-needed support to the fertiliser sector would not only safeguard the livelihoods of countless farmers but also strengthen the country's overall economic resilience, the FMPAC stated.

Malik mailed requested Ghaor Ijaz's intervention in the matter, recognizing the importance of both the textile and fertiliser sectors to Pakistan's well-being.