Tractor manufacturers in Pakistan have raised concerns over the frequent changes in the general sales tax (GST) regime and called for a stable GST framework as part of the upcoming tractor policy. In a recent meeting, industry representatives highlighted the challenges posed by fluctuating GST rates, excessive regulatory duties, high markup rates, and inconsistent policy frameworks, which they say are undermining the growth of the sector.
The manufacturers stressed that these issues—along with erratic tractor loan schemes, varying provincial subsidy programs, unpredictable commodity support prices, and the absence of a national tractor policy—are creating an unstable environment for business operations. They urged the government to implement a stable GST system and announce a comprehensive national tractor policy to provide long-term stability to the sector.
The local tractor manufacturing industry is composed of approximately 250 family-owned small and medium enterprises (SMEs), employing between 30,000 and 35,000 people. These manufacturers produce 44,203 tractors annually and generate tractor parts worth Rs48.62 billion every year. The industry contributes Rs32.10 billion in taxes, making it a significant player in Pakistan’s agricultural economy.
These concerns were raised during a high-level meeting between tractor manufacturers and Haroon Akhtar Khan, Special Assistant to the Prime Minister on Industries and Production. The discussion included the need for a national tractor policy to provide a stable regulatory framework for the sector’s growth.
Government Calls for Price Reduction
Meanwhile, the government has directed tractor manufacturers to propose solutions that would help reduce tractor prices, making them more affordable and accessible to farmers. The price range for tractors in Pakistan currently spans from Rs2.2 million to Rs5 million, depending on the model and horsepower.
For instance, Millat Tractors offers models priced between Rs2.22 million and Rs5.213 million, while Al-Ghazi Tractors (New Holland) prices range from Rs2.369 million to Rs3.849 million. Bull Power Tractors’ prices range from Rs2.34 million to Rs4.75 million.
Haroon Akhtar Khan emphasized that protecting the local industry is central to the Prime Minister’s vision. “Agriculture, export, and manufacturing sectors are closely linked and must be developed together to drive economic growth,” he said. He further highlighted that increasing exports and improving the overall economy remain key priorities for the government. The suggestions made by tractor manufacturers will be carefully reviewed as part of ongoing efforts to address the challenges facing the sector.