The Agricultural Income Tax Act, 2025, throughout the provinces of Pakistan, touted as a progressive move to broaden the provincial tax base, may end up becoming a regressive blow to Pakistan’s already fragile agricultural economy. While it is positioned as a revenue-generating reform aligned with IMF conditions, its ground-level impact risks violating basic human rights.
Around 70-75% of the population directly or indirectly depends on agriculture for livelihood. Yet, there is no robust agricultural business model in place. Institutions and policies suffer from poor implementation, corruption or bureaucratic neglect.
In such an unstructured environment, imposing steep taxes on a sector already vulnerable to natural disasters and market failures seems unjust and short-sighted. Small and medium-sized farmers will be unable to bear these financial burdens. Many may sell their lands and migrate to urban centres in search of stable income. This forced urbanisation will contribute to overcrowded cities while reducing agricultural land, eventually accelerating food shortages.
Agricultural taxation must go hand in hand with structural reforms, investment in irrigation and storage infrastructure, subsidised inputs, crop insurance and access to modern technology. Instead of bowing to IMF conditions, the state must design policies rooted in national interest and agrarian justice.
Qazi Fahad Ahmed
Hyderabad
