Pakistan’s new agricultural income tax, implemented under International Monetary Fund (IMF) conditions, is drawing concerns from experts. The tax ranges from 15% to 45%, with an additional 10% super tax on high-income landowners. This makes Pakistan’s agricultural tax among the highest in the region, surpassing rates in India, Bangladesh, and Sri Lanka.
The Institute of Cost and Management Accountants of Pakistan (ICMA) has raised concerns about the tax’s impact. They cite outdated land records, fluctuating farm incomes, and weak tax collection systems as major challenges. These issues, they argue, could make it difficult to collect taxes effectively and equitably.
The report also warns that the tax could burden small farmers and drive up agricultural product prices, contributing to inflation. It points out that political resistance may hinder compliance, making enforcement even more challenging. The implementation of the tax could further strain the agricultural sector, which already faces numerous difficulties.
To address these challenges, ICMA has recommended a phased approach to tax implementation. They suggest starting with large landowners and modernizing land records. Additionally, they urge the government to improve digital tax tools and offer incentives to encourage compliance.
Source - https://dailytimes.com.pk
