Islamabad:
The background contacts between President Asif Zardari and the Vice Prime Minister Ishaq led to an advance on the issue of the new Law on Agricultural Income Tax They managed to break the dead point, the indesters revealed. Tuesday.
Government sources told Express PAkGazette that the multiple attempts of the Ministry of Finance to convince the Sindh government to immediately introduce the Agricultural Income Tax regime to save the International Monetary Fund Program (IMF).
They said that due to the delay of more than four months when approved and implement the law; The IMF was not ready to give dates for the first review conversations. This had also been revealed by Sindh Prime Minister Murad Ali Shah, on the floor of the Chamber, while talking about the legislation.
“They told us without surroundings that the IMF team would not arrive, and that the country would not breach if the agricultural tax bill was not transmitted to a law,” said Prime Minister Shah to the session of the Sindh Assembly.
After the efforts of the Ministry of Finance remained unsuccessful, the sources said, Ishaq, together with the economic team, visited the presidency a few days ago to convince the president on the matter.
The president said for the first time that he would ask the Government of Sindh to enter the bill after his return from a five -day China visit that began on Tuesday.
However, at the insistence of Dar, the president immediately telephoned Prime Minister Shah, and also to Baluchistan Prime Provinces.
According to the sources, the Government recognized the positive contribution of giving to convince President Zaradri to eliminate an important obstacle on the path of the IMF visit. An official of the Ministry of Finance said that the political insight of giving helped to achieve the result, the ministry had been trying to achieve in recent months.
On Monday, after the Sindh Assembly unanimously approved the bill of the Law on Agricultural Income Tax, 2025, the Minister of Finance, Muhammad Aurangzeb, thanked the provincial governments for implementing the key condition of the IMP
The Ministry of Finance is now sure of the success of the first review of the IMF program. Last week, Aurengzeb had said that the IMF team could come at the end of February or early March.
The IMF had imposed the condition that the provincial governments increase the rate of abysmally low agricultural income tax to 45% and impose up to 10% of Super Tax on high income owners.
At the end of October, “each province modifies its legislation and regime of Agricultural Income Tax to completely align it with the Federal Personal Income Tax Regime for small farmers and the Federal Corporate Tax Regime for Income for Commercial Agriculture, so that taxes can begin from January 1, 2025, “according to the IMF program documents.
The deadline had been lost by all provincial governments, but then the provinces began introducing these laws due to the hard position of the IMF. The National Fiscal Pact, signed by all provinces, also declared that the provinces would tax agricultural income under a new regime since January 1, 2025, with collection for the second half of the fiscal year 2024-25.
Currently, federal fees for personal income tax are as high as 50% and corporate rates are 29%, excluding the Super Income Tax. Even the IMF mission chief to Pakistan, Nathan Porter, had said during the internal meetings that his fingers crossed when it was the introduction of the Agricultural Income Tax Law in Sindh, the sources said.
The sources said that the IMF was now expected to communicate a date for the review mission and that its successful completion would unlock the second section of loan worth more than $ 1 billion.
Speaking on the floor of the Chamber, Prime Minister Shah had criticized the Federal Government for not involving the provinces in conversations with the IMF, although the agricultural tax was a provincial issue.
The Sindh agricultural income tax bill proposes that the annual agricultural income of up to RS600,000 will be exempt from taxes, while the maximum tax rate for revenues greater than RS5.6 million annually will be 45%.
A super progressive tax has also been introduced; without a super tax on annual agricultural income of up to RS150 million and a maximum of 10% of super tax that applies to revenues greater than RS500 million annually. For small agricultural companies, the new rate will be 20% and for large companies it will be 29%, excluding the impact of the Super Tax.
