Minister for Industries and Production, National Food Security and Research Rana Tanveer Hussain on Friday said the government has decided to introduce a track-and-trace system in the local cotton and ginning industry to prevent tax evasion.

Speaking to a delegation of Pakistan Cotton Ginners Association, who visited the minister, he said the cotton industry plays a vital role in the rural economy and can provide employment to a large section of the skilled and semi-skilled workforce in the country.

During the meeting, issues pertaining to additional tax measures on cottonseed and cottonseed cakes in the current budget were discussed, a press release said.

The minister said a track and trace system will be introduced on locally produced cotton bales to prevent tax evasion and thus protect local farming communities and the country’s industrial sector.

Rana Tanvir Hussain said that the Cotton Control Act will be effectively implemented in collaboration with the provincial governments. He also assured the delegation that their proposals regarding sales tax on cottonseed and cottonseed cakes will be considered.

The Minister also assured the delegation that the issue of the new tax measures will be discussed with the Finance Department and the Federal Tax Council to address the problems facing the local pitting industry.

Speaking on the occasion, the representatives of Cotton Ginners Association briefed the Minister about the additional tax on cotton products and said that heavy taxation was affecting the production of cotton ginning industry. They urged the need for rationalization of tax on these goods for the benefit of local industrial sector and to promote cotton crop in the country.

They said that rationalisation of sales tax would improve the tax compliance culture in the country and also help curb the growing tax evasion in the country.

The delegation informed the meeting that the country produced over 8.4 million bales of cotton last season. According to her, it is possible to increase the crop yield by as much as 20 million bales by stimulating the policy.