Aasma Aslam

M.PhilUniversity of LahorePakpattan Campus

MechanizationMechanization or mechanisation is the

process of changing from working largely or exclusively by hand or with animals to

doing that work with machinery.

Comparison

Mechanization of agriculture to increase crop yieldChemical Technology

fertilizer Plant protection measure

Hybrid seeds

Mechanization of agriculture to increase crop yieldHydrological Technology

Drip Irrigation system

Embankment of water channelsTube wells

Mechanization of agriculture to increase crop yieldMechanical Technology

• During fiscal year 2013-14, the overall performance of agriculture sector witnessed a growth of 2.1 percent due to positive growth in agriculture related sub sectors. Crops grew at 1.2 percent, Livestock 2.9 percent, Forestry 1.5 percent and Fishing 1.0 percent.

Table : Agriculture growth percentages (Base=2005-06)

Sector 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Agriculture 1.8 3.5 0.2 2.0 3.6 2.9 2.1• Crops -1.0 5.2 -4.2 1.0 3.2 2.3 1.2• i) Important Crops -4.1 8.4 -3.7 1.5 7.9 1.2 3.7• ii) Other Crops 6.0 0.5 -7.2 2.3 -7.5 6.1 -3.5• iii) Cotton Ginning -7.0 1.3 7.3 -8.5 13.8 -2.9 -1.3 • Livestock 3.6 2.2 3.8 3.4 4.0 3.5 2.9• Forestry 8.9 2.6 -0.1 4.8 1.8 1.0 1.5• Fishing 8.5 2.6 1.4 -15.2 3.8 0.7 1.0 • Source: Pakistan Bureau of Statistics

PRODUCTION INDEX OF IMPORTANT CROPS 2005-06 BASE

Crops 2011-12 2012-13 2013-14

Wheat 110.3 113.8 118.8

Maize 139.5 135.7 145.6

Rice 111.1 99.8 122.5

Sugarcane 130.7 142.7 148.8

Cotton 104.4 100.1 98.1

Source: Pakistan Bureau of Statistics(fiscal year 2013-14)

Should there be mechanization in agriculture?

Against

• Capital Intensive

• Technology for big farmer bias

• Displace labour

• Divert Capital & foreign exchange

Should there be mechanization in agriculture?

Favour

• Encourage multiple cropping

• Package of modern inputs

• Lowers the Cost of production

• Reduce the dependency upon animal

Agriculture Income Tax AGRICULTURAL INCOME TAX in PAKISTAN — A BRIEF SURVEY

• In 1860 the British Imperialists levied income tax in India. Agricultural Income was also taxable.

• In 1882 Agricultural Income was exempted from taxation.

• In 1922 Income Tax Act was promulgated and Agricultural Income was exempted from taxation.

• In 1925 Indian Taxation Enquiry Committee (TEC) was constituted, which recommended taxation of all incomes including the agricultural incomes.

• In 1935, the taxation system was divided been the central and provincial governments. Agricultural tax was removed from the purview of the central government.

• In 1944, a law for the imposition of Agricultural Income Tax was promulgated in the Province of Bengal.

• In 1948 in Pakistan, the Provinces of Punjab-Bhawalpur and N.W.F.P. promulgated similar laws.

• In 1956, with the promulgation of the constitution, the agricultural tax was removed from the purview of the central government.

• IN 1959, Taxation Enquiry Committee recommended taxation of agricultural income but the Food and Agricultural Committee recommended exemption of Agriculture from taxation.

• In 1963, Fact Finding Committee on Agriculture opposed imposition of tax on agriculture.

• In 1964, Taxation and Tariff Commission recommended the imposition of tax on agriculture and handing over the subject to the Federal Government, but the Government of West Pakistan vetoed the proposal.

• In 1970, the Enquiry Committee on Agriculture recommended the imposition of income tax on agricultural income on a very limited scale, but it was not accepted.

• In the 1973 Constitution, agricultural income was again exempted from taxation.

• In 1977, the Federal Government repealed the I.T. Act of 1922.

• In 1977 the Assembly passed the Financial Ordinance, which exempted 25 Acres irrigated and 50 Acres non irrigated land from taxation. Due to the imposition of Martial Law, it could not be Implemented.

• In 1979, Agricultural Income was exempted from taxation by the I.T. Ordinance.

• In 1986, the National Taxation Reform Commission examined the imposition of Agricultural Income tax but there was no outcome.

• In 1992 there was a serious deficit in tax revenue. Serious consideration started to be given to the imposition of agricultural income tax.

• In 1993 The Care-taker Prime Minister Moin Qureshi rescinded the Section 5-a of the Wealth Tax Act (1963) so that agricultural income may be taxed on a limited scale.

• From the above it is clear that during the last Century and Half the question of Agricultural income tax has been a subject of debate, but without any result. The taxation policy throughout the world is on income- period

The Issue of agricultural taxation

Should agriculture be taxed?

There are number of arguments presented for and against a tax on agriculture.

Arguments Against Income Tax on Agriculture

• Difficult assess to net income

• Inaccessible approach to farmers

• Uncertain agriculture income

Arguments in favor of Income Tax on Agriculture

• Agricultural income

• Evasion on income tax

• More Elastic Income