IMF talks: Pakistan 'agrees' to slap tax on agriculture income

ISLAMABAD: Pakistan has ‘agreed’ to the imposition of tax on agriculture income during talks with the International Monetary Fund (IMF), ARY News reported on Thursday, citing sources.

International Monetary Fund (IMF) officials held virtual negotiations with the provincial officials of Pakistan for the new loan programme.

Sources said the IMF officials urged the provincial authorities to slap tax on agricultural income, which the provinces of Pakistan reportedly agreed upon.

The provincial governments of all four provinces of Pakistan sought time to submit a plan for imposing tax on agricultural income. The plan would be submitted to the IMF by July 12.

The sources further said that the tax on agriculture income will be slapped from yearly income of Rs600,000.

Read more: Pakistan ‘hopes to secure’ fresh IMF loan program in July

Subject to signing of the new agreement, the sources said that the global lender has set the October 2024 deadline to amend the existing provincial laws to bring them at par with the federal income tax law. The IMF has also asked for rescinding any income tax exemption for the livestock sector by October this year.

It is to be noted that finance ministry officials anticipate that an agreement for the new loan program will be finalized in July. The new program is expected to range between $6 billion and $8 billion, although the exact amount has yet to be finalized.

The new loan program with the IMF is projected to span three years.

The National Assembly (NA) on July 28 approved the Federal Budget for the fiscal year 2024-25 with a total outlay of Rs18,870 billion.