Farmers too must pay income tax, says Finance Minister AMA Muhith

Farmers have so far been exempted from income tax but the tax holiday will not last long, Finance Minister AMA Muhith has said.

He plans to bring farmers under the tax net within two years. 

“It is time for farmers to realise that they, too, must pay taxes because many have meanwhile become big farmers,” Muhith said at a discussion on the 2016-17 budget on Saturday.

“The area has not grown, but land productivity has increased so much that they can be taxed. They have been exempted from taxes until now. But their income will have to be taxed, not their entire produce,” he said.

At present, salaried people, business persons and other professionals have to pay taxes if their annual income exceeds Tk 250,000.

Muhith was speaking at a discussion on ‘Post National Budget 2016-17 evaluation: Perspective Bangladesh’ held at Dhaka’s Krishibid Institute.

Muhith, who was the key speaker, also advocated putting an end to sugarcane cultivation in Bangladesh.

“I am discouraging sugarcane cultivation. It will be gradually phased out.”

He pointed out that sugarcane cultivation takes about nine months, during which time the mills remain shut. “The country is losing several billions of taka because of the sugar mills. Besides, a lot of land remains locked up.”

The government provides subsidies to the mills to help them run.

Food Minister Qamrul Islam spoke of several government initiatives to ensure fair price of paddy to farmers but former food minister Abdur Razzak took a different view.

“The government is unable to buy directly from growers because they are unable to reduce the moisture content to 14 percent. So paddy has to be bought from the mills,” Razzak said.

This time the government has fixed a paddy procurement target of 700,000MT at a cost of Tk 920 per maund (37.32 kg).

It set May 5 to Aug 31 as the purchase period. But farmers are selling paddy at the reduced rate of Tk 500-700 per maund to traders at the peak of the Boro season, reports from districts say.

A maund of rice is reportedly selling at Tk 400 in Sirajganj while a kilo of beef costs more. 

The food minister had announced on May 31 that middlemen would be allowed to buy from farmers, who would be encouraged to sell directly to the government.

Planning Commission member Shamsul Alam chaired the discussion organised by the Bangladesh Agriculture Economists Association.