Budget 2026-27 raises super tax exemption threshold to Rs500 million and aligns tax rate with federal income tax regime.
KARACHI: The Sindh government has announced significant relief measures for taxpayers in the agricultural sector, including a reduction in the super tax rate on agricultural income and a rationalisation of penalties for non-filing of agricultural income tax returns.
Presenting the Sindh Budget 2026-27 on Wednesday, Chief Minister Syed Murad Ali Shah said the measures are being introduced in line with commitments made under the National Fiscal Pact and are aimed at encouraging compliance while reducing the tax burden on the agriculture sector.
According to the chief minister, the provincial government has proposed reducing the quantum of penalties imposed on taxpayers who fail to file their agricultural income tax returns. The move is intended to make the tax regime more practical and encourage greater participation in the tax system.
Murad Ali Shah stated that the government has also decided to provide substantial relief regarding the super tax levied on agricultural income. Under the proposed changes, the exemption threshold for super tax will be increased from Rs150 million to Rs500 million.
In addition, the super tax rate on agricultural income will be reduced from 10 per cent to 8 per cent, providing significant tax relief to higher-income agricultural taxpayers.
The chief minister said the revised rate structure has been designed to align Sindh’s agricultural income tax framework with the federal income tax regime, ensuring consistency and reducing disparities between provincial and federal taxation policies.
The reduction in the super tax rate and the increase in the exemption threshold are expected to lower the tax burden on agricultural businesses and large-scale farming operations while promoting investment and growth in the agriculture sector.
Officials believe the measures will improve tax compliance, simplify the agricultural taxation framework and support the government’s broader efforts to modernise tax administration in accordance with national fiscal reform objectives.
The announcements form part of the Sindh Budget 2026-27, which includes a range of fiscal reforms and tax relief measures aimed at strengthening economic activity and improving the ease of doing business across the province.
With the latest changes, taxpayers earning agricultural income above the revised threshold will benefit from lower super tax rates, while non-filers will face reduced penalties under the proposed rationalised framework.
