IMF-driven agricultural income tax law passed by Sindh Assembly amid reservations
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Sindh Chief Minister, Syed Murad Ali Shah addresses to media persons during press conference, at CM House in Karachi on July 13, 2022. — PPI
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According to Pakistan’s responsibilities under the International Monetary Fund (IMF) Bailout Program, the Sindh Assembly hesitated Monday, with a hesitant Sindh Agricultural Income Tax Bill 2025, with a lender, with a lender. Negotiations have been criticized for excluding provinces.
Under the IMF’s $ 7 billion contract was viewed as part of Pakistan’s economic reforms, which covers 37 months, it increases tax on agricultural income while to complete the loan program. Emphasize the need to increase revenue collection and reduce repeated deficit.
A meeting of the provincial cabinet, headed by Sindh Chief Minister Murad Ali Shah, had approved the proposed law.
Addressing the Sindh Assembly session, Shah, while defending the province’s tax policies, pointed out that agricultural tax was already and being collected.
Criticizing the move to transfer the Federal Government’s tax collection to the Federal Board of Revenue (FBR), the CM accused the federal government when they discussed the agreement with the IMF by management. So they deliberately keep the provinces away from the loop.
Murad said, “The FBR itself told the IMF that agriculture has not been taxed,” Murad added that the federal government initially assigned the FBR to collect taxes last May. What was but the provinces were later forced to implement the move.
“The FBR has failed to meet its goals by putting more burden on taxpayers,” the CM said. Shah also highlighted Sindh’s position on provincial sovereignty, which claims that the Sindh Revenue Board (SRB) has fulfilled its goals permanently and the sales tax should be handed over to the provinces. Should
He said that Punjab and Khyber Pakhtunkhwa have already approved the agricultural tax bill, while the Balochistan cabinet has also approved it.
“We do not want the IMF program to suffer because of us, but this tax will quickly cause trouble,” he said, adding that the implementation timeline on January 2025 and later. I was moved until September 30.
Referring to the conditions like drought in some parts of Sindh, it highlighted that the permanent shortage of irrigation water is affecting thousands of acres of fields, including its own, which built the dam. Due to the cause.
“Taxing decisions related to taxation can disrupt farming,” CM said, emphasizing the importance of agriculture to protect food.
Earlier, Law Minister Zia Lanjar, while presenting the bill, said that the tax formula has been formed under the present government, and emphasizing that Pakistan meets several agreements under the IMF program. Have to do
The purpose of this progressive legislation is to strengthen the province’s tax collection framework and increase financial responsibility in the agricultural sector.
Under this new law, the Sindh Revenue Board (SRB) is responsible for collecting and implementing agricultural income tax, which will ensure a systematic and effective process.
The law suggests that agricultural income of up to Rs 600,000 annually will be exempted from tax, while the maximum tax rate for income over Rs 5.6 million will be 45 % annually.
Despite contributing 23 % to GDP, 35 % labor force and earning annual income of about Rs 9 trillion in annual income, agricultural income has historically been paid much less tax than other sectors.
A progressive super tax has also been introduced, which has no super tax of up to Rs 1550 million on annual agricultural income and the maximum 10 % super tax is applicable to more than Rs 500 million annually.
In addition, the purpose of this law is to include corporate farming in the tax net.
Small companies will be subject to a 20 % tax rate on their annual agricultural income, while large companies will face the tax rate 29 %.
In particular, cattle have not been included in the tax net, and the advance agricultural income tax based on land cultivation will no longer be imposed on it. Agricultural income tax payment, deposit and filing will be fully automated for maximum performance.
According to a Sindh government statement, the new historical law represents a change in an important policy by assigning the SRB to the agricultural income tax administration, which proves a track record in tax collection.
The statement added that “it is expected that this new legislation will expand the tax base, improve transparency, and ensure equal partnership with the agricultural sector, which is very much for the Sindh economy. Essential. “
Pakistan, which aims to increase its financing after receiving the $ 7 billion IMF bailout in September 2024, with the first review at the end of February, struggling with boom and boot cycles for decades. There has been 22 IMF bailouts since 1958.
