ISLAMABAD: Finance Minister Muhammad Aurangzeb on Monday thanked the provincial governments for imposing the agriculture income tax (AIT), in line with the commitment made to the IMF.
According to a statement issued by the Ministry of Finance, Mr Aurangzeb praised the passage of the AIT law, a key milestone in efforts to broaden the tax base.
The statement followed the Sindh Assembly’s passage of the AIT law, which occurred on the same day the provincial cabinet approved the draft bill.
Sindh was the last province to pass the law, ensuring that agriculture income tax will be implemented nationwide from July 1, 2025.
The other three provincial assemblies had already passed similar legislations, including Khyber Pakhtunkhwa, led by the PTI, which approved the law last week. With this, the provinces have now completed uniform legislation for agriculture income tax.
Originally, the IMF had set a deadline for the introduction of the bills in the provincial assemblies by the end of October 2024, with their passage required by January 1, 2025.
Despite a month-long delay, the completion of the legislative process is still within an acceptable margin of slippage.
As part of Pakistan’s $7 billion Extended Fund Facility with the IMF, the country is obligated to recover taxes from all sectors, including real estate, wholesale, and agriculture — sectors that had previously been exempt from taxation. This has led to an inequitable tax burden on salaried individuals.
Published in Dawn, February 4th, 2025
