The All Pakistan Fertiliser Dealers Association (APFDA) has expressed serious concern over multiple taxes imposed on fertiliser dealers, warning that the measures are eroding already thin profit margins and could affect the smooth distribution of fertilisers to farmers across the country.
Tax Burden Under Finance Act 2026-27
In a statement, APFDA said the fertilizer dealership sector is a fully documented and GST-registered segment of the economy that plays a vital role in ensuring the uninterrupted supply of fertilizers, a key component of national food security. According to the APFDA, the Finance Act 2026-27 has increased the minimum tax on turnover applicable to fertilizer distributors, dealers, sub-dealers and wholesalers from 0.25% to 0.50%.
In addition, fertilizer dealers continue to be subject to withholding taxes under Sections 236G and 236H of the Income Tax Ordinance, 2001, besides banking charges, financing costs, transportation expenses, warehousing costs and other regulatory compliances.
Thin Profit Margins Under Pressure
The Association maintained that fertilizer dealers operate under Government-notified Maximum Retail Prices (MRP) with an overall profit margin of only around two percent, leaving them with no commercial flexibility to pass these additional costs on to farmers. As a result, the cumulative tax and compliance burden continues to erode the already limited margins of fertilizer dealers.
APFDA said the additional tax burden has significantly reduced dealers’ earnings and created serious concerns within the sector. It stressed that fertilizer dealers stand shoulder to shoulder with the farming community and remain committed to maintaining a stable supply chain for agricultural inputs.
Impact on Supply Chain and Food Security
The association warned that shrinking margins could undermine the viability of dealership businesses, making it increasingly difficult for them to continue providing services to farmers across the country. APFDA also expressed concern over the proposed Cess by the Punjab government, stating that the additional levy would further increase the overall cost of doing business at a time when the sector is already facing multiple taxes, rising operational costs and extensive regulatory compliance requirements.
The Association emphasized that any additional fiscal burden should be carefully evaluated to avoid adversely affecting the agricultural supply chain and the broader economy.
Call for Immediate Relief
Calling for immediate relief, APFDA urged the federal government to abolish the taxes imposed on fertilizer dealers and review provincial levies that add to operational costs. The association said easing the tax burden would help ensure the continued availability of fertilizers to farmers, support agricultural productivity and contribute to the country’s food security objectives.
