IMF Wants More Tax on Farmers

The International Monetary Fund (IMF) has expressed dissatisfaction with Pakistan's inadequate revenue collection from farmers, despite significantly higher income tax rates. While agriculture income tax rates have been raised from 15 percent to 45 percent, the revenue targets continue to be unmet. In Sindh, the collected amount was Rs.

1.1 billion against a Rs. 2 billion target. The province had set a Rs. 6 billion goal for the current fiscal year but is expected to fall short by at least Rs. 3 billion. Punjab, on the other hand, collected Rs. 4 billion against its Rs. 10.5 billion target last fiscal year and has now increased its agriculture income tax target to Rs.

12.5 billion for the present fiscal year. The IMF is also questioning how the provinces intend to enhance collection and whether the Federal Board of Revenue (FBR) can offer more precise information regarding agriculture income. The FBR has provided data to Sindh on 44,350 individuals who reported agriculture income in their tax returns for the 2025 tax year.

However, Sindh has stated that it requires real-time data sharing between the FBR and the Sindh Revenue Board to improve tax collection. The province has also implemented digital registration and filing systems, with 3,650 people registering under the new system and 1,912 returns filed so far. This situation of weak agriculture tax collection arises as the FBR itself fell short of its downward-revised tax target by Rs.

929 billion last fiscal year. The FBR has assured the IMF that it will fulfill its key performance targets this year, but it remains uncertain if collecting the full annual tax target of Rs. 15.263 trillion will be achieved.