The federal government is considering imposing an income tax on farmers to address concerns raised by the International Monetary Fund (IMF) over delays in agricultural income tax collection.
According to sources, the government has pushed efforts to satisfy the IMF regarding implementation of the agricultural income tax framework. However, the government will initially wait for provinces to report progress on tax collection and the filing of agricultural income tax returns, since agricultural income tax falls within the provincial domain.
Moreover, sources stated that the provinces have been given time until September 30 to meet the required targets for agricultural income tax collection and tax returns. Their performance will be reviewed after the deadline.
However, if the provinces do not achieve the required targets by September 30, the government is expected to move towards an alternative taxation plan. Authorities could hold meetings with provincial governments in October over introducing a fixed agricultural income tax scheme in which farmers could be charged an income tax of up to Rs5,000 per acre.
In addition, IMF has repeatedly expressed concern over continued delays in collecting agricultural income tax.
On the other hand, previously, the Agriculture Department was assigned the responsibility of formulating a comprehensive strategy to attain self-sufficiency in wheat and other vital crops.
Key agricultural proposals include the provision of modern machinery to farmers, the development of command areas for 22 small dams, interest-free loans for agricultural graduates, and scholarships for students in the sector.
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