Islamabad, July 11, 2024: During negotiations with the International Monetary Fund (IMF), Pakistan has agreed to impose a tax on agricultural income.
Officials from the International Monetary Fund (IMF) held virtual negotiations with provincial officials of Pakistan regarding the new loan program.
Sources indicated that the IMF urged provincial authorities to impose a tax on agricultural income, to which the provinces reportedly agreed.
The provincial governments of all four provinces of Pakistan requested time to submit a plan for imposing a tax on agricultural income. This plan is to be submitted to the IMF by July 12.
Sources further stated that the tax on agricultural income will be levied on yearly incomes of Rs600,000 and above.
Sources indicated that, subject to the signing of the new agreement, the global lender has set an October 2024 deadline for amending existing provincial laws to align them with federal income tax laws. The IMF has also requested that any income tax exemptions for the livestock sector be rescinded by October this year.
It is worth noting that finance ministry officials anticipate the agreement for the new loan program will be finalized in July. The new program is expected to range between $6 billion and $8 billion, although the exact amount has yet to be determined.
The new loan program with the IMF is projected to span three years.
On July 28, the National Assembly (NA) approved the Federal Budget for the fiscal year 2024-25, with a total outlay of Rs18,870 billion.
