Govt Considers Income Tax on Farmers to Satisfy IMF
ISLAMABAD: The government has started considering imposing income tax on farmers as part of efforts to convince the International Monetary Fund (IMF) over the collection of agricultural income tax.
According to sources, the government has accelerated efforts to address the IMF’s concerns regarding agricultural income tax, while preparations for an alternative plan concerning provincial agricultural tax collection targets have also begun.
Sources said the government would wait until September 30 for the provinces to submit agricultural income tax returns and meet the required collection targets.
If the provinces fail to achieve the required targets for agricultural income tax and the filing of returns by September 30, an alternative plan will be prepared, sources added.
According to sources, consultations with the provinces on introducing a fixed agricultural income tax scheme could be held in October. If a fixed tax scheme is introduced for the agriculture sector, the government may consider imposing income tax of up to Rs5,000 per acre.
Sources further said that, similar to the fixed tax scheme being considered for the business community, farmers and landowners could also be offered a fixed taxation scheme in October.
The IMF has repeatedly raised concerns over delays in the collection of agricultural income tax. Although the agriculture sector accounts for around 24.5% of Pakistan’s economy, its contribution to overall tax revenues remains extremely low at just 0.3%.
The proposed measures are aimed at increasing the agriculture sector’s contribution to tax revenues and addressing the IMF’s concerns over the implementation of tax reforms.
