THIRUVANANTHAPURAM:In a major decision aimed at addressing the crisis in plantation sector, the government has decided to do away with plantation tax for the time being.A Cabinet meet on Wednesday took the decision taking into consideration the demands from plantation managements and workers’ unions in this regard.Big players would benefit from the government’s decision.
Though the government has imposed plantation tax, the revenue from the same is only nominal. In 2016-17, the it was only `1.7 crore, an officer said.The decision was taken based on the recommendations of the Krishnan Nair Commission, which looked into the issues in the sector. “A decision has been taken to modify the plantation tax and abolish certain tax components for the time being.The land tax will remain. The decision is aimed at supporting the sector,” a source said.
The government will extend support to repair the labourers’ accommodation (layams) in the plantations. It would be done in a collective manner with the government and the managements sharing the cost equally. The Cabinet also decided to do away with the fee for cutting rubber trees.The decision will come up in the Assembly on Thursday as the government tables the decisions under Rule 300.
Association of Planters of Kerala chairman Thomas Jacob said the government decision to do away with plantation tax is a big relief to the sector, which plummeted from `20,000 crore in 2012 to `8,000 crore last year.“Though it has come a bit late, the government move will help planters reinvest in the sector. Also, they’ll be able to manage finance from the banks, who have been denying loans to the sector due to lack of profitability,” said Jacob.
The agriculture income tax alone formed 50 per cent of the big planters’ profits, Jacob pointed out.
National Federation of Rubber Producers Society (NFRPS) head Suresh Koshy, who is also the Kerala Karshaka Congress (KKC) state vice-president, said he has been taking up the tax issue with various governments since 1990.
The Krishnan Nair Committee was set up based on the NFRPS and KKC’s representations. In the last budget, the government removed agriculture income tax for planters owning up to 10 acres.
“Taking out rubber from the forest wood category is a big relief. The government has done a huge favour to small and big planters as forest wood attracts 24 per cent GST,” said Koshy.
Kerala Farmers Federation general secretary Joshy Joseph Maniparambil said the LDF Government “has done whatever it could within its limitations.”“Among the packages, abolishing of seigniorage on rubber is a great relief for its growers. Freezing of agriculture income tax now benefits the corporates. At present there’s no agriculture income tax for small and medium growers,” Joshy said.
No burden on govt, says Finance Minister
T’Puram: The state government will not have major burden following the decision to scrap plantation tax, said Finance Minister Thomas Isaac. “In the last budget, the government had brought in a major reduction in rates. Hence the revenue from plantation tax could be anywhere between H3-4 crore only. But the plantation managements feel it’s a major burden on them. That’s why a decision was taken to abolish the same,” said Isaac. With the sector facing major crisis, the plantations have been crying foul over various restrictions including those for replanting and cutting of trees. It is in this backdrop the Cabinet decided to scrap plantation tax.