ISLAMABAD: Pakistan is set to introduce a long-anticipated tax on the agriculture sector, with legislation expected to be finalized by January 2025 and tax collection commencing on July 1, 2025, Finance Minister Muhammad Aurangzeb announced a day earlier.
Speaking to the media at the Parliament House following a session of the Senate Standing Committee on Finance, Aurangzeb revealed that substantial groundwork was underway to ensure the tax’s timely implementation.
During the briefing, Aurangzeb also highlighted the government’s ongoing negotiations with China regarding the restructuring of the energy sector’s debt. He expressed optimism that a formal memorandum of understanding (MoU) with China would soon be finalized, enabling further debt re-profiling discussions.
In a related development, the Chairman of the Federal Board of Revenue (FBR) reported a significant surge in income tax return filings, which have more than doubled to four million this year. The Chairman emphasized that the government would not extend the filing deadline, as a large-scale crackdown on non-filers is slated to begin next month. With a vast data set at the government’s disposal, the FBR intends to take stringent action against tax evaders. Prime Minister’s firm directives have reinforced the government’s resolve to widen the tax net and ensure that no tax defaulters escape accountability.
The Senate Standing Committee on Finance, chaired by Senator Saleem H. Mandviwalla, unanimously passed the Government Bill titled “The Banking Companies (Amendment) Bill, 2024,” after introducing several amendments. The bill, referred to the committee by the House on August 27, 2024, includes provisions for the State Bank of Pakistan (SBP) to enforce its “fit and proper” criteria for financial entities and their boards, with the finance minister overseeing appeals to safeguard the autonomy of the central bank.
However, Finance Minister Aurangzeb cautioned that such a provision might undermine the SBP’s independence and its governance framework. Some committee members raised concerns that certain clauses within the SBP Act might extend beyond the bank’s autonomous status and require revision. Aurangzeb proposed a comprehensive amendment package to address these concerns while suggesting a removal of restrictions on dual nationality for senior SBP officials, excluding the governor. The committee supported the idea for future legislation and approved the bill, which also empowers commercial banks to establish microfinance subsidiaries as part of their corporate social responsibility efforts.
The committee further resolved a contentious issue involving an illegal demand by a commercial bank for payment of Rs 603 million under Islamic Finance prior to the delivery of a vehicle. The matter was successfully addressed by the bank.
Additionally, a detailed briefing was delivered by the Karakoram Initiative on the concept of a “National Tax Authority,” followed by a presentation from the Country Director of the Asian Development Bank (ADB). The briefing underscored ADB’s critical role in Pakistan’s development, with recent support including $802 million in aid, $500 million for COVID-19 vaccine procurement, and $1.5 billion for recovery efforts following the 2022 floods.