Agricultural tax now on par with corporate tax rates in Pakistan, IMF told

ISLAMABAD: Policy negotiations between Pakistan and the International Monetary Fund (IMF) are ongoing, during which Pakistan has informed the IMF about the legislation aimed at imposing taxes, as per the fund’s conditions.

This includes updates on the provincial governments’ move to increase the agricultural income tax rate. The IMF has also been apprised of the tax rate under this new agricultural income tax legislation.

According to reports, the tax rate on agricultural income in Pakistan has been aligned with that of corporate income. No tax will be levied on agricultural income up to Rs600,000 annually.

The documents further detail that an annual agricultural income between Rs600,000 and Rs1.2 million will be subject to a 15 per cent tax. For income between Rs1.2 million and Rs1.6 million, a fixed tax of Rs90,000 will be imposed, with any income exceeding Rs1.2 million being taxed at a 20 per cent rate.

Moreover, annual agricultural income between Rs1.6 million and Rs3.2 million will incur a fixed tax of Rs170,000. Income exceeding Rs1.6 million in this slab will be taxed at a rate of 30 per cent.

For those earning between Rs3.2 million and Rs5.6 million annually, a fixed tax of Rs650,000 will be applicable, with any income exceeding Rs3.2 million being taxed at 40 per cent. Agricultural income above Rs5.6 million annually will face a 45 per cent tax rate.

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