Govt to Introduce Fixed Agriculture Tax If Provinces Miss IMF Target

The government is considering a fixed tax on agricultural income if provinces fail to meet their agriculture income tax targets by September 30. The IMF has raised concerns over delays in collecting agriculture income tax, with the government currently waiting for provincial tax returns before deciding whether additional measures are needed. According to the report, government will assess the agriculture income tax collections after September 30. If the target is not achieved, the government could consult with the provinces in October on introducing a fixed tax scheme for the agriculture sector. Under the proposal, farmers and landowners could be brought under a fixed tax structure similar to the system being considered for the trading sector. The government could consider a tax of more than Rs. 5,000 per acre under such a scheme, although the final rate would depend on consultations with the provinces. Agriculture accounts for around 24.5 percent of Pakistan's economy, but its contribution to tax revenues has remained around 0.5 percent, highlighting the government's push to increase tax collection from the sector.