In a major development on the taxation front, the Sindh cabinet on Monday approved the Agricultural Income Tax Bill 2025.
The bill will come into effect from January 2025, said Chief Minister (CM) Sindh, Syed Murad Ali Shah, according to a statement from CM House.
“The Sindh cabinet is approving the agricultural tax in the national interest,” stated CM Murad.
The provincial government has excluded the livestock sector from agricultural income tax, Murad clarified. He added that the Sindh Revenue Board (SRB) will collect agricultural income tax instead of the Board of Revenue (BOR).
Adjustments will be made to the tax in case of natural disasters, while fines will be imposed for concealing cultivated land, the provincial government warned.
The Sindh cabinet also voiced concerns over not being consulted before negotiations with the International Monetary Fund (IMF).
“I will discuss the matter with the federal government once again” CM Murad said.
The Washington-based global lender has long pushed for the imposition of agricultural income tax as part of its economic reforms agenda.
Last year, Finance Minister Muhammad Aurangzeb said legislation for the imposition of tax on the agriculture sector would be completed by January 2025, which would become effective for collection from July 1, 2025.
Experts believe that the government can collect a maximum amount of Rs300 billion from agriculture income tax with the help of provinces.
However, CM Murad warned that the imposition of agricultural income tax may lead to an increase in vegetable prices in the province.
“Taxing agriculture will also result in higher wheat, rice, and other grain prices,” he added.