The implementation of the IMF’s condition to impose income tax on agricultural income will not begin in January.
Provinces will impose income tax on agricultural income starting from July 2025 under the National Fiscal Pact. The federal government has requested more time from the IMF to impose taxes on agricultural income, sources told ProPakistani.
Under the National Fiscal Pact, provinces have not yet completed the legislation required to impose taxes on agricultural income. The IMF was assured that taxes on agricultural income would be imposed starting next month. However, as per IMF conditions, all provinces failed to complete the required legislation on agricultural income tax by October 30.
According to the conditions, provinces are required to impose taxes on small farmers at the federal income tax rate, and commercial farmers are to be taxed at the federal corporate income tax rate.
Sources from the Ministry of Finance reveal that provinces have not yet been informed about imposing taxes on agricultural income starting in July.
The failure to impose taxes on agricultural income may create difficulties in upcoming negotiations, according to sources.