Fertiliser makers upset at tax hike proposal

Fertiliser makers are upset over reports that the government intends to increase the federal excise duty on key ingredients to 10 per cent in the budget for FY26. Fertilisers are currently subjected to a five per cent federal excise duty (FED), but no GST is levied. Diammo­nium phosphate (DAP) has an additional five per cent sales tax levy and there are varying levels of taxes on inputs, which push up the cost of production. Fertiliser makers say they recognise the government’s fiscal constraints and the broader objective of expanding the tax base in alignment with IMF recommendations, but at the same time call upon the government to reconsider this proposed policy measure in view of its potentially adverse effects on the agriculture sector.