Lahore, November 15, 2024 – In a significant move, the Punjab Assembly passed the Punjab Agricultural Income Tax (Amendment) Bill 2024 on Thursday, despite opposition protests and a walkout by members of the Pakistan Peoples Party (PPP) and Pakistan Tehreek-e-Insaf (PTI).
The bill, which seeks to increase taxation on agricultural income in Punjab, will now go to the governor for final approval, though insiders suggest it may be sent back to the Assembly for reconsideration.
The legislation, part of a broader push to tax agricultural income more equitably, extends the tax net to include income from livestock owned by farmers. This approach is intended to broaden the tax base by ensuring that higher-earning farmers contribute proportionately. However, the bill’s opponents argue it aligns too closely with international lending pressures, particularly from the International Monetary Fund (IMF), rather than addressing the unique needs of Pakistan’s farmers.
Under the new tax framework, higher-earning farmers will face a progressive tax rate on their agricultural income, including revenue from livestock. In addition, the bill stipulates a daily penalty of 0.1% on unpaid taxes for tax defaulters. Punjab Minister for Parliamentary Affairs Mian Mujtaba Shuja ur Rehman described the bill as part of a “new regime of agricultural income taxation,” aimed at improving equity and revenue generation.
The opposition, however, raised strong objections. PPP parliamentary leader Syed Ali Haider Gilani criticized the government for failing to consult opposition parties on the bill’s draft, describing the PPP as a “pro-farmer” party that cannot support legislation imposing undue financial pressure on farmers. He argued that the agricultural sector, a lifeline for many in Pakistan, requires policies that bolster rather than burden farmers.
PTI senior legislator Rana Aftab Ahmad Khan denounced the bill’s passage as a “black day” for agriculture, arguing that taxing the sector harms economic growth. He pointed out that the opposition’s recommendations had been ignored, stating that the law minister, not the parliamentary affairs minister, should have overseen this legislation. Khan also suggested that under Article 142 of the Constitution, agricultural taxes are beyond the provincial legislature’s mandate, potentially rendering the bill unconstitutional.
Other opposition voices echoed these concerns. PTI MPA Ahmar Rasheed Bhatti called the bill anti-farmer, while Nadeem Qureshi, an opposition MPA from Multan, argued that a 40% tax on agricultural income would economically cripple farmers, likening it to an “economic death sentence” for those in agriculture.
The bill’s passage signals a critical step toward restructuring Punjab’s tax policy, but the strong opposition highlights the ongoing debate over balancing fiscal reforms with protections for Pakistan’s agricultural community.
