Pakistan is struggling to collect agriculture income tax, with Punjab and Sindh likely to miss their targets again this fiscal year despite higher tax rates.

The International Monetary Fund (IMF) was informed that agriculture income tax collection remained low last fiscal year after provincial governments increased rates from 15 percent to 45 percent.

Sindh collected only Rs1.1 billion against its Rs2 billion target last fiscal year. Its target for the current fiscal year has been raised to Rs6 billion, but officials expect the province to fall short by at least Rs3 billion.

Punjab collected Rs4 billion against its Rs10.5 billion target last fiscal year. The province has set a higher target of Rs12.5 billion for the current fiscal year.

The IMF also asked about efforts to improve agriculture tax collection through better data sharing between the Federal Board of Revenue (FBR) and provincial authorities.

The FBR provided Sindh with data on 44,350 people who declared agriculture income in their tax returns for tax year 2025.

Sindh, however, said it needs real-time connectivity between the FBR and the Sindh Revenue Board to improve tax enforcement.

The province has shifted agriculture income tax administration from the Board of Revenue to the Sindh Revenue Board and introduced digital registration and filing systems. It has so far registered 3,650 taxpayers and received 1,912 returns.

The IMF also questioned the FBR about its own tax collection performance. The FBR missed its downward-revised target by Rs929 billion last fiscal year.

The government has assured the IMF that provincial authorities are working to improve agriculture tax collection as part of broader efforts to strengthen tax revenues.