The FBR is considering two different modes of taxing agriculture, neither of which may yield much in terms of revenue, given the current state of the tax infrastructure, said FBR chairman Salman Siddiqui.
“If production is taxed, we can generate between Rs60 billion and Rs70 billion,” said Siddiqui, though he was quick to point out that
this would be very difficult since it would involve a massive documentation exercise for which the FBR does not currently have the manpower.
The other method would be what is known as a presumptive tax, which is based on the amount of land owned by a single individual. This would be much easier, but would generate only about Rs6 billion in revenues, according to Siddiqui.
“More than 85 per cent of landholdings in Punjab fall in the subsistence level bracket and cannot be taxed,” explained the FBR chairman. “Only about 5 per cent of total cultivable land would be taxable if agricultural sector is taxed on acreage.”
Published in The Express Tribune, March 20th, 2011.