LAHORE: The Lahore Chamber of Commerce and Industry (LCCI) has supported the cause of the seed industry and has urged the prime minister to withdraw the 17 per cent sales tax imposed on import and local supply of seed.

In a letter to PM Shehbaz Sharif, LCCI senior vice-president Mian Rehman Aziz Chan said the agriculture sector together with agro-basedindustryfetches around80pc of the country`s total export earnings. He cautions that the 17pc ST on seeds will result in a sharp cut in farm yields and exports.

Forwarding a communiqué from Pakistan Hi-Tech Hybrid Seed Association chief Shahzad Ali Malik detailing negative impacts of the levy on yields, inflation, tax collection and labour market, Mr Chan demands that the government should withdraw the levy introduced through the Finance (supplementary) Act, 2022.

The seed association has calculated that the 17pc ST will lead to at least 20pc hike in the prices of essential crops and the burden will be transferred to the growers and endconsumers. This will make growers to rely on low-quality cheap seeds.

Mr Malik asserts that the levy is unlike to have any meaningful impact on revenue collection as it will lead to informal sector growth which in turn will increase the sale of undeclared, undocumented and untaxed seeds, and encourage unf air competition between the illegal and legal businesses and also a drop in total tax collection.