IMF to Meet Provinces Today Over Delay in 45% Agricultural Income Tax

The International Monetary Fund (IMF) mission will meet with provincial government representatives today to review progress on implementation of the 45 percent tax on agricultural income, a key requirement condition of the lender’s $7 billion loan program. Sources told ProPakistani that none of the four provinces—Punjab, Khyber Pakhtunkhwa (KPK), Sindh, and Balochistan—met the October 31 deadline for imposing the agri income tax. While the Punjab cabinet approved the bill and Khyber Pakhtunkhwa drafted it, Sindh and Balochistan have made zero progress so far. As per the National Fiscal Pact signed by all provinces, the agricultural income tax collection should begin on January 1, 2025. The IMF mission will be briefed on the legislative delays and the provinces’ role in economic and tax reforms, which include taking on certain federal responsibilities such as higher education, health, and infrastructure development. The lender is also expected to review provincial budget performance. The provinces were collectively expected to maintain a budget surplus of Rs. 342 billion in the first quarter, but a shortfall occurred due to Punjab’s deficit of Rs. 160 billion which spiked the actual surplus to Rs. 182 billion for July to September.