IMF targets: Govt weighs fixed farm tax scheme

The federal government is preparing an alternative plan to meet its agricultural income tax commitments under the International Monetary Fund (IMF) programme, considering a fixed tax scheme of up to Rs5,000 per acre if provinces fail to achieve the required revenue targets.

The sources said the government would wait until September 30 for the provinces to meet the agreed targets for agricultural income tax collection and tax return filing.

Under the proposed alternative, consultations with the provinces on a fixed agricultural tax scheme could begin in October, the sources said.

They added that the government was considering imposing a fixed income tax of up to Rs5,000 per acre on the agricultural sector under such a scheme. The proposal could bring farmers and landowners under a fixed tax arrangement similar to schemes introduced for other sectors.

The sources said the government was making efforts to persuade the IMF regarding agricultural income tax implementation, as the lender has repeatedly raised concerns over delays in collecting revenue from the sector.

The IMF has pointed out that although the agricultural sector accounts for around 24.5% of Pakistan's economy, its contribution to overall tax revenues remains extremely low at just 0.3%.