The Government has assured International Monetary Fund that tax on agriculture income will be imposed from July 1, 2025. The International Monetary Fund released a set of conditionalities as part of the new loan programme finalized with Government of Pakistan.
According to Ministry of Finance, revenue amounting to Rs1,723 billion will be generated under the head of extra taxes and duties during the current financial year. International Monetary Fund said that Rs357 billion will be collected through personal and corporate income tax while an end in sales tax exemption will help to generate Rs286 billion.
The IMF further revealed that after expansion in limits of Withholding Tax Rs240 billion will be collected and exemption in sales tax will be completely withdrawn and percentage for applying sales tax will also be enhanced from 5 percent to 10 percent.
According to IMF conditions, 5 percent federal excise duty will be imposed on pesticides, and additional excise duty of 5 percent will be levied on fertilizers.
IMF said that provincial governments will amend agriculture laws after these amendments provincial agriculture tax will be equal to income tax and corporate tax collected by the federal government.
IMF sources said that amendments in agriculture tax laws will be completed till January 1, 2025 and government will start collecting tax on agriculture
income from July 1, 2025. IMF source said that a government will obtain approval for new national revenue accord after that provincial government will be responsible for higher education, health and social security expenditure. Provincial government will take measures to enhance revenue and will establish a Tax Policy Office.
Pakistan will not announce any kind of amnesty scheme and no tax exemptions will be notified. Ministry of Finance will obtain approval of additional budget from the parliament. A comprehensive report will be finalized to stop intervention of the federal government.
