The Sindh cabinet has approved the Agricultural Income Tax Bill 2025, which will take effect from January 2025, according to Chief Minister (CM) Sindh, Syed Murad Ali Shah. The announcement was made in a statement issued by CM House on Monday.
CM Murad stated that the decision to approve the agricultural tax was made in the national interest. He clarified that the livestock sector has been excluded from the scope of the agricultural income tax. Additionally, the Sindh Revenue Board (SRB) will now be responsible for collecting the tax, replacing the Board of Revenue (BOR).
The provincial government has also introduced provisions to adjust the tax in the event of natural disasters. However, fines will be imposed on individuals who conceal information about cultivated land, the government warned.
Here is the table summarizing the agricultural income tax rates:
| Agricultural Income (Rs) | Tax Percentage (%) |
|---|---|
| 150-200 million | 1 |
| 200-250 million | 2 |
| 250-300 million | 3 |
| 300-350 million | 4 |
| 350-400 million | 6 |
| 400-500 million | 8 |
| Exceeding 500 million | 10 |
Additionally:
- Small Companies: 20% tax
- Large Companies: 28% tax
During the cabinet meeting, concerns were raised about the federal government’s lack of consultation with Sindh before engaging in negotiations with the International Monetary Fund (IMF). CM Murad stated, “I will discuss the matter with the federal government once again.”
The IMF has long advocated for the imposition of an agricultural income tax as part of its broader economic reforms agenda. Last year, Finance Minister Muhammad Aurangzeb announced that legislation for taxing the agriculture sector would be finalized by January 2025, with tax collection set to begin on July 1, 2025.
Experts estimate that the government could generate up to Rs. 300 billion in revenue from the agricultural income tax with the cooperation of provincial authorities. However, CM Murad cautioned that the new tax could lead to higher prices for essential commodities, including vegetables, wheat, rice, and other grains.
“The imposition of agricultural income tax may result in an increase in vegetable prices,” he warned, highlighting the potential economic impact of the new policy.
