The All Pakistan Fertiliser Dealers Association (APFDA) has expressed serious concerns over the growing tax burden on fertiliser dealers, warning that multiple taxes and rising operational costs are squeezing already narrow profit margins and could disrupt the efficient supply of fertilisers to farmers across Pakistan.
According to APFDA, the Finance Act 2026-27 has doubled the minimum tax on turnover for fertiliser distributors, dealers, sub-dealers, and wholesalers from 0.25 percent to 0.50 percent. In addition to this increase, dealers remain subject to withholding taxes under Sections 236G and 236H of the Income Tax Ordinance, along with banking charges, transportation expenses, warehousing costs, financing charges, and regulatory compliance requirements.
The association noted that fertiliser dealers operate under government-notified Maximum Retail Prices (MRPs) and typically earn profit margins of around two percent. As a result, dealers have little flexibility to absorb or pass on additional costs, making the cumulative tax burden a significant challenge for the sector.
APFDA cautioned that shrinking margins could undermine the viability of dealership businesses and affect the smooth distribution of fertilisers, a critical input for Pakistan’s agricultural sector and food security objectives. The association further highlighted concerns regarding a proposed cess by the Punjab government, arguing that any additional levy would further increase the cost of doing business at a time when dealers are already facing mounting fiscal pressures.
The concerns come shortly after an APFDA delegation met Minister of State for Finance and Revenue Bilal Azhar Kayani to discuss tax and regulatory issues affecting the fertiliser distribution network. During the meeting, government officials acknowledged the importance of fertiliser dealers in supporting agricultural productivity and assured stakeholders that their recommendations would be considered.
Calling for immediate relief measures, APFDA urged the federal government to withdraw additional taxes imposed on fertiliser dealers and review provincial levies that add to operational costs. The association believes that easing the tax burden would help maintain an uninterrupted fertiliser supply chain, support farmers, and contribute to sustainable agricultural growth and national food security.
Source: https://www.nation.com.pk/21-Jun-2026/apfda-concerned-imposition-multiple-taxes-fertiliser-dealers
