ISLAMABAD: The government is set to potentially collect up to Rs 300 billion in agriculture income tax with the support of provincial authorities. Sources have informed Business Recorder that the Federal Board of Revenue (FBR) has urged provinces to adopt the federal income tax schedule to streamline the collection process.
To align agricultural income tax (AIT) regimes with federal standards, provincial governments will need to make legislative amendments. This new taxation framework is expected to come into effect on January 1, 2025, applying to both small farmers and commercial agriculture.
Additionally, provinces plan to shift the Goods and Services Tax (GST) from a positive list to a negative list approach starting in the 2025-26 fiscal year to help combat tax evasion.
The collective aim of the provinces is to boost revenues from corporate tax in agriculture and improve GST collection on services, while also exploring new revenue streams through a unified property taxation strategy.