ISLAMABAD – Pakistan agreed to introduce a tax on agricultural income as part of recent discussions with the International Monetary Fund (IMF), the sources said on Thursday.
The sources said that the officials from the IMF conducted virtual meetings with provincial representatives of Pakistan to negotiate terms for a new financial assistance program.
The IMF, according to the sources, recommended that provincial authorities implemented a tax on agricultural income, a proposal which was accepted by the provinces.
The Fund also gave time until July 12 to the provincial governments of the country to come up with a detailed plan for the new agricultural income tax to the IMF.
“The proposed tax will apply to annual incomes exceeding Rs600,000,” said the sources while quoting the IMF officials.
Besides it, the IMF set a deadline of October 2024 for amending provincial laws to align with federal income tax regulations, contingent on the finalization of the new agreement.
The IMF, they said, also required that any existing income tax exemptions for the livestock sector be abolished by October.
Finance ministry officials expect that the new loan agreement will be concluded by July. This program is anticipated to be valued between $6 billion and $8 billion, with the exact amount yet to be determined. The loan arrangement is planned to last for three years.
On July 28, the National Assembly approved the Federal Budget for the fiscal year 2024-25, which has a total allocation of Rs18,870 billion.
