Govt Is Determined to Tax Agriculture Sector to Expand Tax Net: Finance Minister

Finance Minister Muhammad Aurangzeb on Tuesday made it clear that the government will tax the agriculture sector to expand the tax net

Aurangzeb acknowledged skepticism from industrialists and the International Monetary Fund (IMF) about the government’s ability to implement this plan. He said the government had no other choice but to expand the tax net and to include under-taxed sectors like agriculture to avoid further financial difficulties.

The minister stressed the need for every segment of society to contribute to the tax base so it doesn’t have to burden industrialists and the salaried class.

Aurangzeb viewed the State Bank of Pakistan’s latest policy rate cut to 19.5 percent as a positive step, noting that there is still room for further reductions despite potential inflation increases. He acknowledged the challenges posed by high interest rates, taxation, and energy costs, asserting that sustainable growth can only be achieved through macroeconomic stability.

The Finance Minister opined that rapid growth often leads to balance of payments problems. He advocated for export-led growth and identified agriculture and IT as potential growth sectors.

Aurangzeb also urged the private sector to lead economic growth. He urged banks to focus on lending to farmers and SMEs based on cash flow rather than directed lending.