Dr Shaikh has come out with a lame excuse that tax on agricultural income cannot be levied by the federal government.
ISLAMABAD: This refers to your report of April 27 titled “Agricultural income unlikely to be taxed” which shows that even Dr Abdul Hafeez Shaikh has come out with the rather lame excuse that tax on agricultural income, being a provincial subject, cannot be levied by the federal government.
The minister should know that Article 162 of the Constitution empowers the president to accord sanction for introduction of an amendment to the existing definition of the expression ‘agricultural income’ as given in Article 260(1), on the basis of which total exemption has been granted under Section 41 of the Income Tax Ordinance, 2001.
With the previous sanction of the president, the National Assembly can vary the meaning of the expression ‘agricultural income’ so as to tax all incomes from rents and revenues and earnings from activities like sericulture and horticulture, including production of fruits, flowers, shrubs, vegetables and livestock. With this amendment in the income tax law, exemption to the agricultural income can, therefore, be limited to incomes derived from cultivation and production of crops like wheat, rice, cotton, sugarcane and tobacco, which may remain within the domain of the provincial governments.
Jameel Bhutto
Ex-member (tax policy) CBR
Published in The Express Tribune, April 28th, 2011.
