Senate proceedings: PML-N backs agriculture income tax proposal

Urges government to introduce the tax on the agriculture sector in the new budget.

Zahid Gishkori June 05, 2012


In an unexpected move, the Pakistan Muslim League-Nawaz (PML-N) on Monday became the first major political party to call for taxing the agricultural sector to help the ailing economy.

Initiating a debate on the federal budget for the next fiscal year, Leader of Opposition in the Senate Senator Ishaq Dar said his party supported the idea of imposing taxes on the agriculture sector.

“My party supports levying an agricultural tax. We urge the government to go ahead with the proposal to broaden the tax net,” Senator Dar said, adding that the Muttahida Qaumi Movement, being a coalition partner of the government, should urge the government to introduce the tax on the agricultural sector in the new budget.

Interestingly, the proposal had first been floated by the MQM.

During Monday’s proceedings, which lasted for more than three hours, the PML-N also presented a summary to the Council of Common Interest (CCI), supporting the imposition of taxes on the agricultural sector under the existing laws.

Senator Dar, who spoke for two hours and 24 minutes on the new budget, said that Punjab had collected Rs1 billion while Sindh had collected only Rs300 million under the current agriculture tax, adding that the tax net had to be broadened to boost the economy.

He went on to add that the federal budget had set an ambitious tax revenue target of Rs2,381 billion, with direct taxes contributing only Rs932 billion.

He said the revenue target was unrealistic given the track record of our revenue collection agencies. The downward revised target for the Federal Board of Revenue (FBR) is Rs2,024 billion for 2011-12.

Senator Dar said that regrettably the tax-to-GDP ratio which was around 14% in 1998-99 now varies between 8.6 and 9.8% between the years 2000-01 and 2011-12, adding that the economic survey claimed that the setback was caused by slower growth in the agriculture sector which grew at an estimated rate of 3.13%.

The PML-N leader said poverty levels in the country had also increased as more and more people were pushed below the poverty line, which according to a current survey stands at 52%. A realistic number to determine the poverty line is a daily wage of $2, he added.

Highlighting the current expenditures for 2011-12, Senator Dar said the revised estimates now stand at Rs2,632 billion, indicating overspending close to Rs317 billion by the government.

The PML-N leader also took a shot at the defence budget, saying it was high time the revenue portion of the defence budget was brought before parliament for thorough debate and approval.

The opposition leader concluded his statements by pointing out that even though an overwhelming majority of the party wanted to boycott the proceedings, it was decided in the end that they would participate in the debate on the budget.

During the proceedings, senators belonging to the MQM staged a four-minute walkout against the law and order situation in Karachi.

Leader of the House Jahangir Badar concluded the proceeding by thanking Senator Dar for taking part in the budget debate in a positive manner while also urging him to consolidate his suggestions and recommendations and submit them to the Senate Standing Committee on Finance.

Published In The Express Tribune, June 5th, 2012.


Anwar Hakam | 10 years ago | Reply

Tax on income from agriculture is one item that non of the successive governments has been able to put into effect. Also this is one of the biggest loop holes in the tax laws that has historically helped many folks in and outside of the power corridors to accumulate wealth and encourage black market economy. Just a cursory look at the wealth that many Pakistani politicians and in most cases their financiers possess and compare that with the corresponding sums of money that they pay as income tax and one can readily see the devastating effect it has on the national exchequer and consequently on the culture of black money. Modus operandi is simple to understand. Make money by any means, corruption, black marketing, drug trade, smuggling, extortion, kidnapping for ransom, misuse of authority, you name it. As long as you own a piece of agriculture land, size doesn’t matter, your income has a perfect camouflage and your money from any of these sources, is theoretically considered white. Considering its own history on the subject matter, Nawaz league may not be demanding the enactment of such laws out of pure love for the economic well being of the masses. The intended objective, as it seems, is to cause fissures within the ruling parties. Ironically, MQM seems to be the single political platform to naturally demand the imposition of tax on income from agriculture, as its mostly urban support base is going to be least affected by such laws. As much as the well meaning folks would, regardless of their party affiliations, support the imposition of such tax, I’ll be surprised if enacting such laws is yet a possibility.

Syed Ali Raza Abidi | 10 years ago | Reply

This is a great news item. Provided PMLN is serious about it. If they are, then why not include this in their Provincial Budget for 2012-13

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