KARACHI: The Sindh Cabinet has approved the Agriculture Income Tax Bill 2025, which is set to come into effect from January 2025. The announcement was made by Sindh Chief Minister Murad Ali Shah on Monday.
The new bill aims to streamline the taxation system for agricultural income while providing relief to certain sectors. Livestock has been excluded from the scope of the agriculture income tax, a move confirmed by the Sindh government to support farmers and livestock breeders.
Under the new legislation, the responsibility for collecting the tax will shift from the Board of Revenue (BOR) to the Sindh Revenue Board (SRB), and this change is expected to improve efficiency and transparency in tax collection.
In a bid to address the challenges faced by farmers, the bill includes provisions for adjustments in cases of natural disasters, ensuring that farmers are not unduly burdened during difficult times. However, penalties will be imposed on those found concealing cultivated land to evade taxes.
The tax structure under the bill differentiates between small and large companies. Small companies will be subject to a 20 percent tax rate, while larger companies will face a higher rate of 28 percent. This tiered approach is designed to balance the tax burden and promote fairness in the agricultural sector.
The Sindh government has emphasised that the new bill is part of its broader efforts to modernise the agricultural sector and ensure sustainable revenue generation. Officials have assured stakeholders that the implementation process will be closely monitored to address any concerns that may arise.
The Agriculture Income Tax Bill 2025 is expected to have a significant impact on the province’s agricultural landscape, with the government hopeful that it will contribute to economic growth and development in Sindh.
Criticism on the Bill:
Earlier, the Sindh cabinet saw strong resistance on Sunday as Murad Ali Shah pushed for the approval of the Agricultural Income Tax Bill 2025, with several ministers expressing concerns over its implications.
During the meeting, a majority of cabinet members viewed the federal government’s push for the tax as an encroachment on provincial autonomy. They argued that taxing agriculture at the same rate as industries was unjustified, given the fundamental differences between the two sectors. Ministers pointed out that while industrial workers earn fixed wages, farmers (haris) typically receive a 50 percent share of agricultural earnings, making direct taxation more burdensome.
Some cabinet members urged the chief minister to hold consultations with the federal government prior to the proceedings. However, CM Shah defended the tax, asserting that it was in the national interest and was being implemented under the conditions set by the International Monetary Fund (IMF). Despite strong opposition, he repeatedly pressed for its approval, arguing that the move was crucial for financial stability.
Concerns were also raised about the political repercussions of the tax, with ministers questioning how they would justify it to farmers in their constituencies. The debate highlighted the growing tensions between the Sindh government and federal over fiscal policies impacting Sindh.
Digitising proceedings:
Additionally, the Sindh Cabinet has decided to digitise its proceedings to reduce costs associated with handling large volumes of paper files. The cabinet approved the development of a digital application that will allow ministers to access agendas, meeting minutes, and official records through designated tablets.
These tablets will be returned to the General Administration Department if a minister is replaced. To facilitate this transition, the cabinet has allocated PKR150 million for purchasing the necessary devices.
The Cabinet has also approved a government-to-government contract for the Solar Home System, awarding it to the National Radio & Telecommunication Corporation (NRTC).