KARACHI, QUETTA: Agricultural income became taxable across Pakistan on Monday with the passage of bills by the Sindh and Balochistan assemblies.
Sindh and Balochistan were the only two provinces left after the Punjab and Khyber Pakhtunkhwa assemblies unanimously passed the agricultural income tax bills into laws recently.
The Sindh Assembly also approved new slabs for levying tax on the farming income. As per the newly passed law, a maximum of 45 percent tax will be collected on annual agricultural income exceeding Rs5.6 million. A super tax will also be levied if the annual farming income exceeds Rs150 million.
Additionally, the bill aims to include corporate farming in the tax net. Small farm sector companies will be subject to a 20 percent tax rate on their annual agricultural income, while large companies will face a tax rate of 29 percent.
The bill states that agricultural income up to Rs600,000 annually will be exempt from tax. The Sindh Revenue Board (SRB) will collect the agricultural income tax. Sindh Law and Parliamentary Affairs Minister Ziaul Hassan Lanjar moved the bill.
Speaking on the bill, Chief Minister Syed Murad Ali Shah said they had been pushed to a tight spot by the federal government. He said the new law was being introduced out of compulsion to protect the country’s accord with the IMF.
He said the Pakistan People’s Party govt in the province had implemented the decision for the country’s sake. He told the house that the SRB always met its annual revenue collection targets but the Federal Board of Revenue failed to meet its targets in many sectors.
He disclosed that tax on farming-related income in the country had already been imposed for the past 30 years. He opined that to cover up its failures, the FBR came up with the stance that the farming sector in the country hasn’t been paying any tax.
He said the country might face a threat to food security if the concerned growers desisted from farming activities due to the reduction in their agricultural income. Shah told the House that the federal government had informed them a few days ago that the IMF team was not ready to visit Pakistan.
Pakistan’s current accord with the IMF would come to an end if the latter’s team didn’t visit Pakistan, he said, adding, “We didn’t want that we should become the cause behind the annulment of this accord.”
He told the concerned legislators that Punjab and Khyber Pakhtunkhwa had already passed similar bills whereas the Balochistan cabinet had passed the same proposed law. “First they gave the green signal to someone and later they pointed a gun at us to approve this (law),” said the CM while commenting on the federal government’s dealings with the IMF.
He urged the federal government not to treat the provinces in such a harsh manner. Shah informed the house that he and many key members of his cabinet had already been paying taxes on agricultural income.
Shah said the payment of farm taxes by them exceeded the taxes paid by people associated with other sectors. “We are apprehensive that the owners of farmlands would start doing any other business if their income is affected,” he said.
He informed the House that a large part of his income was based on farming activities so he needed to indulge in agricultural work. In a related development, several members of the Sindh cabinet Monday stiffly opposed the move of Chief Minister Syed Murad Ali Shah to get approved the draft of the new Sindh bill to impose taxes on the farming income in the province.
According to the sources privy to the cabinet proceedings, several cabinet members termed the move the federal government’s interference in the affairs of provinces. The cabinet members who opposed the move said raising the ratio of farming income tax to meet the rate of taxes levied on industries would be a great injustice to the Sindh agriculture sector.
They said there were differences between the regulatory affairs of the farming and industrial sectors. They said the small growers who worked on the farmlands of the affluent feudal lords were entitled to 50 percent of agricultural income generated at the end of a farming season. Whereas, the industrial sector is mainly based on the salaried-class workers.
They said apart from the fixed salaries, the industrial workers didn’t get any share in the annual profit of an industrial unit. The concerned cabinet members asked the chief minister to first contact the federal government to get the issue resolved. It is learnt reliably that the Sindh chief minister requested his cabinet colleagues repeatedly to approve the draft of the bill in question.
Mohammad Zafar Baloch from Quetta reports: The Balochistan Assembly Monday passed the Balochistan Tax on Land and Agricultural Income Amendment Bill and the Balochistan Civil Servants Amendment Bill.
The session, chaired by Deputy Speaker Ghazala Gola, started with a half-hour delay. Parliamentary Secretary Barkat Ali Rind presented a report on the Balochistan Tax on Land and Agricultural Income Amendment Bill on behalf of the chairman Standing Committee on the Board of Revenue.
Following that, Provincial Minister Mir Asim Kurd Gelo introduced the amended Balochistan Tax on Land and Agricultural Income Bill, which was passed by the House. Assembly member Maulana Hidayat-ur-Rehman opposed the bill, calling it a colonial law.
Later, Parliamentary Secretary Barkat Ali Rind presented the report of the Standing Committee on Finance regarding the Balochistan Civil Servants Amendment Bill. Subsequently, Provincial Minister Mir Shoaib Nosherwani introduced the amended Balochistan Civil Servants Bill, which was also approved by the assembly.
Mehtab Haider adds: Meanwhile, Federal Finance Minister Muhammad Aurangzeb Monday called upon the private sector to take an active role in Pakistan’s economic turnaround, while the government is committed to providing a supportive framework.
He expressed optimism about the country’s economic direction, citing increased investments and solid performance of the existing investments. He said the country’s economy had stabilised during the last 12 months and the policy rate had come down, local and foreign investments had increased and most importantly, the inflation rate had come down to 2.41 percent and that the government will make sure that its benefit should go to the masses.
Aurangzeb emphasized the government’s role in providing a stable policy framework and continuity, which he believed was crucial for attracting further investment. Speaking at the pre-budget discussion session with the Islamabad Chamber of Commerce and Industry (ICCI), Aurangzeb said that to achieve economic stability, the government had initiated the budget-making process for the fiscal year 2025-26, seeking to align the national budget with its economic vision, “Uraan, Pakistan.”
He said the Federal Board of Revenue (FBR) had also solicited tax-related proposals from the stakeholders to broaden the tax base, introduce progressive taxation, and simplify tax laws. He expressed hope that the policy rate will also come down to a single digit and that the government will extend every possibility support to capacity-building and financing of the SMEs.
In his address, Minister of State for Finance Ali Pervez Malik said the sitting government under the visionary leadership of Prime Minister Shehbaz Sharif had taken bold decisions for the economic well-being of the country.
“He emphasized the need for export-led growth, stating, “Every entity in the country must contribute to exports.” Nasir Mansoor Qureshi, President Islamabad Chamber of Commerce and Industry ( ICCI ) in his welcome address appreciated the federal government, especially the finance minister and the minister of state for finance, for taking on board the chambers with regard to compiling proposals for the next budget.
He said both the government and business community together could pull the country out of the economic mess and put it on the road to sustainable growth. He not only appreciated the government for take bold steps for the economic stability of the country but also pledged full support of the chamber for the purpose.
Atif Ikram Sheikh, President Federation of Pakistan Chamber of Commerce and Industry (FPCCI), commended the government for the measures which led to economic stability by underlining the need for taking more drastic measures for the ease of doing business.
Rashid Mehmood Langrial, Chairman FBR, assured that the business community’s problems concerning his department will be addressed in a transparent way. Chairman Founder Group ICCI Tariq Sadiq by mentioning the services of the Founder Group for the community said that both the government and the business community unitedly will address the economic challenges.
Sardar Tahir Mehmood, executive member of the ICCI mentioned the real estate sector problems by expressing the optimism that the government’s measures will surely address this sector’s problems. Mian Akram Farid=, former President ICCI, performed as the moderator in an excellent manner.
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