Pakistan could rake in Rs1.5tr as farm income tax: expert

ISLAMABAD: Under the structural benchmark proposed for the upcoming International Monetary Fund (IMF) programme, Pakistan could fetch up to Rs1,500 billion in revenues from larger landholders sitting in parliament or otherwise on an annual basis.

But there is an attached condition that if the provincial governments slapped similar rates as being charged from salaried/ non-salaried class up to a maximum 45 percent rate, then the collection could go up to the desired level.

Renowned economist and former finance minister Dr Hafiz A Pasha says that there is a potential to fetch up to Rs1,500 billion from farm income but keeping in view the practical difficulties, the provinces could collect a maximum Rs60 to 70 billion at the moment. “There are one percent big feudal landlords who owned 22 percent land in the country, while 5 percent landowners possessed 44 percent land. Under fairness and equitable taxation regime, these big landlords must be brought into the tax net,” Dr Pasha said while talking to The News on Friday. He said that Pakistan’s economy was passing through a difficult phase and agricultural income would have to be brought into the tax net as suggested by the IMF. According to his estimates done based on research studies, he said that there was a potential to fetch up to Rs1,500 billion but there would be hardly a collection of Rs60-70 billion on a per annum basis. When contacted, FBR’s former Member Inland Revenue Dr Iqbal said that it would be very hard to collect AIT from the farm sector.