Sindh cabinet approves Agriculture Income Tax Bill 2025

KARACHI: The Sindh cabinet has just approved the Agriculture Income Tax Bill 2025, as reported by ARY News, in a move to meet the conditions set by the International Monetary Fund (IMF).

The decision came at the meeting of the provincial cabinet, headed by Sindh Chief Minister Murad Ali Shah, effective from January 2025. 

Among the salient features of this bill is that agriculture income tax will not be levied on livestock, according to a statement by the Sindh CM. It would include the responsibility of the Sindh Revenue Board in collecting taxes. 

The bill would also ensure the adjustment of the agriculture income tax in the wake of a natural disaster.

Penalty would also be given for concealing cultivated land. That is an essential measure for making sure everything gets done and within the limit, with full compliance. The new tax structure will tax small companies at 20% while large companies at 28%.

Additionally, the agricultural income up to Rs150 million will not be taxed. Income above the threshold will be taxed progressively; for instance, it will begin at 1% for income between Rs150 million and Rs200 million and reach 10%  for incomes above Rs500 million.

However, the cabinet meeting raised concerns that the agriculture income tax would increase the prices of vegetables and the cost of essential grains like wheat and rice.

Sindh CM Murad Ali Shah emphasized that Sindh should have been consulted before the federal government engaged in discussions with the IMF on taxation matters. 

However, he maintained that the imposition of the tax was a decision taken in the larger national interest. This measure is likely to have far-reaching implications on the agriculture sector of Sindh and will be interesting to watch if it pans out in the coming months.