ISLAMABAD: Finance Minister Muhammad Aurangzeb on Monday expressed gratitude to provincial governments for implementing the Agricultural Income Tax (AIT), fulfilling Pakistan’s commitment to the International Monetary Fund (IMF).
In a statement from the Ministry of Finance, Aurangzeb hailed the passage of the AIT law as a crucial step in expanding the country’s tax base.
The announcement came after the Sindh Assembly passed the AIT bill on the same day its provincial cabinet approved the draft. Sindh was the final province to enact the law, ensuring that agricultural income tax will be uniformly enforced across the country starting July 1, 2025.
The other three provinces had already approved similar legislation, with Khyber Pakhtunkhwa, governed by the PTI, giving its nod just last week. This completes a nationwide framework for taxing agricultural income.
IMF-Backed Reforms on Track Despite Delays
Under Pakistan’s $7 billion Extended Fund Facility with the IMF, the country committed to bringing previously untaxed sectors—such as real estate, wholesale trade, and agriculture—into the tax net. Historically, these sectors had enjoyed exemptions, placing a disproportionate burden on salaried individuals.
The IMF initially set an October 2024 deadline for provinces to introduce AIT legislation, with formal approval required by January 1, 2025. Although the process faced a brief delay, the finalization of these laws remains within an acceptable timeframe.
With all four provinces now aligned on agricultural taxation, the government moves closer to fulfilling its obligations under the IMF program, reinforcing broader tax reforms aimed at economic stabilization.
