Islamabad, Dec 18: The federal government has deferred the implementation of income tax on agricultural income, a key condition under the IMF agreement, until July 2025. Initially planned for January, the delay comes as part of the National Fiscal Pact, with provinces requiring additional time to enact the necessary legislation.
Legislative Delay: Provinces have not completed the legislation required to impose agricultural income tax as stipulated by the IMF. The deadline to finalize the legislation was October 30, 2024. New Timeline: Taxes on small farmers and commercial farmers will now be imposed starting July 2025. Small farmers will be taxed at the federal income tax rate, while commercial farmers will face taxation at the federal corporate tax rate.
Federal Request to IMF: The federal government has sought additional time to meet the IMF’s requirements, citing the provinces’ lack of readiness. Potential Implications: The delay may create challenges in upcoming IMF negotiations, potentially affecting Pakistan’s broader economic commitments and fiscal credibility.
Provinces are yet to be formally notified about the July implementation timeline, as revealed by the Ministry of Finance sources. The federal government and provinces must now expedite legislative processes to ensure compliance with IMF terms and avoid future complications.
