K-P governor signs disputed agri tax bill

Kundi calls it unjust to farmers, warns of corruption loopholes

PESHAWAR:

Despite expressing concerns over Agricultural Income Tax Bill, Khyber-Pakhtunkhwa Governor Faisal Karim Kundi has signed the bill.

Governor Kundi said the bill is an injustice to farmers, which cannot be accepted. He highlighted that the landowners and farmers across the province were strongly protesting against the bill, adding the provincial government is opening new avenues for corruption through the bill.

The governor added that the landowners and farmers from across the province visited the Governor's House to record their protest against the bill. He asserted that the bill contained numerous errors that contradicted its legal requirements. The flaws and text of the bill reflect that the provincial government does not want to promote agriculture but to legalise black money, said the K-P governor.

The governor observed that the bill should have exempted disputed land from the tax imposition. The taxes mentioned in the bill are too high for small landowners, which will render the bill ineffective and discourage the agricultural sector in the province. Moreover, the bill also imposes very huge super tax .

According to Khyber-Pakhtunkhwa governor, the bill should have specifically addressed the disputed land issues in war-torn areas and provided tax exemptions for these lands till determination of ownership of the land. He added the bill should have included the provision of appellate forum to address the tax disputes.

The governor said there is an ambiguity in Section 3 and 10 of the bill regarding the zoning area for the tax imposition. He suggested that the income from livestock could have been included in the agricultural income tax, just like Punjab did. It will not only increase revenue but also set a good tax practice in the region, Kundi added.

The K-P governor said that the bill could have provided provisions for withholding agricultural income tax on the purchase of agricultural produce from sugar mills, flour mills, rice mills, and GLT units, similar to Punjab and Sindh. The explanation of Section 2 could also have been provided in more detail, he said.

Earlier on February 7, a large delegation of landowners and farmers from Malakand Division met with Khyber-Pakhtunkhwa governor. During the meeting, Faisal Karim Kundi stated that the bill would be sent back to the Speaker of the Provincial Assembly with reservations and concerns.

Earlier, The Khyber-Pakhtunkhwa Assembly passed the bill to impose agricultural income tax. The Khyber-Pakhtunkhwa Agricultural Income Tax Bill 2025 stipulates that a 15% tax will apply on annual agricultural income between Rs0.6 million and Rs1.2 million, 20% tax on income between Rs1.2 million and Rs1.6 million, and 30% on income between Rs1.6million and 3.2million. Agricultural income above Rs5.6 million will be taxed at 45%.