Islamabad, Oct 11: Govt to Tax Agriculture Income by July 2025, Promises IMF Compliance
The provinces will begin collecting Agriculture Income Tax (AIT) by July 2025, the government has promised the International Monetary Fund (IMF). This will be achieved by increasing the federal excise duty (FED) on fertilizer by five percent and the FED rate on pesticides by five percent in the upcoming fiscal budget (2025–2026).
The four provinces have agreed to modify their agriculture income tax (AIT) regimes in order to fully align them with the federal personal income (small farmers) and corporate income (commercial agriculture) tax regimes by the end of October 2024, through the necessary legislative changes, according to the staff report of the IMF for Extended Fund Facility (EFF) released on Friday.
Under the new system, Tax agricultural income from each province will be taxed starting on January 1, 2025, with the second half of 2024–2025 agricultural income being collected in July of that same year.
Any province that requires technical support to administer and evaluate this tax may get it from the FBR. Because income from agriculture will be taxed equally under this alignment of income tax regimes, the tax system will be more equitable.
similar to other sources of income. In order to prevent tax evasion, the provinces have decided to change the services GST from a positive list to a negative list approach, which will go into effect from the beginning of 2025–2026.
