ISLAMABAD:
The National Finance Commission (NFC), in a meeting scheduled for November 21, will discuss the draft of a harmonised and uniform agricultural tax system for the central government and provinces under the seventh NFC Award.
According to finance ministry sources, though the central government and provinces had agreed on introducing a harmonised and uniform agricultural tax structure, but its draft could not be finalised.
The meeting will discuss the proposal of taxing sale or purchase of agricultural goods instead of land and income.
Sources said after deliberations the Centre and provinces were expected to finalise the draft in the upcoming meeting. If agreed, a uniform tax will be imposed in all provinces.
According to a study conducted by the central government, if tax is imposed on sale or purchase of agricultural products, it will generate heavy revenue for the government. The rate of tax is expected to be 0.5 per cent to one per cent, which will yield huge amounts in taxes as billions of rupees worth of agricultural goods are traded on the country’s farms.
Sources said another proposal under consideration was an increase in farm tax and advance collection from landowners. The tax charged on the size of farmland will be adjusted against income tax payment by farmers.
Provinces say agricultural tax is a provincial subject and are not willing to give collection rights to the central government. In order to improve collection of farm tax, provinces have asked the Federal Board of Revenue (FBR) to provide data of those people who have declared farm income in their tax returns. The meeting will also discuss this demand of the provinces.
Published in The Express Tribune, November 19th, 2011.
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I don't think that agriculture income will be taxed in my lifetime.
Does this article imply that sale/purchase of agriculture goods is tax free at the moment?!