In an effort to satisfy International Monetary Fund (IMF) conditions, the federal government is considering the implementation of an income tax scheme targeting farmers and landowners, alongside contingency plans for provincial agricultural tax targets.
According to official sources, the government will monitor provincial agricultural income tax collections and tax return filings until September 30. If provinces fail to meet their stipulated collection targets by the deadline, a secondary backup plan will be activated.
As part of the proposed contingency framework, consultations with provinces are scheduled for October to introduce a fixed tax scheme for the agricultural sector. Under the prospective plan, a fixed income tax rate of up to PKR 5,000 per acre is being evaluated for farmers and landholders, structured similarly to existing fixed tax models for traders.
The initiative comes amid persistent IMF concerns regarding low agricultural tax yields. Despite accounting for 24.5% of Pakistan’s gross domestic product (GDP), the agricultural sector currently contributes just 0.3% to total national tax revenues.
