After the Sindh Cabinet, the provincial assembly approved the Sindh Agricultural Income Tax Bill 2025, which will come into effect from January. The new tax framework, however, excludes the livestock sector from its ambit.
Under the new structure, annual agricultural income up to Rs600,000 will be exempt from tax, while higher income brackets will face progressively increasing tax rates.
For individuals earning more than Rs5.6 million annually, the maximum tax rate will be 45%. Additionally, the cabinet has introduced a super tax on high-income earners. Those with annual earnings exceeding Rs500 million will be subject to a super tax, with a maximum rate of 10% applied to incomes above Rs150 million.
Sindh Chief Minister Murad Ali Shah chaired a cabinet meeting that determined that the Sindh Revenue Board (SRB) -- instead of the Federal Board of Revenue -- will be responsible for collecting the agricultural income tax.
Additionally, the cabinet has set a minimum agricultural income tax at 1% and a maximum at 10%. It has also introduced penalties for those who conceal cultivated land and agreed to allow adjustments in case of natural disasters affecting agricultural production.
During the meeting, the Sindh CM expressed concerns over the federal government's approach, stating that Islamabad should have consulted Sindh before engaging with the International Monetary Fund (IMF) on economic policies.
The implementation of the agricultural tax is expected to impact prices of essential commodities such as vegetables, wheat, and rice. However, the Sindh Cabinet justified the move in the national interest, emphasizing the need for economic reforms and revenue generation.
The Sindh Cabinet decided to digitalise its proceedings to reduce paperwork and expenses. During a cabinet meeting chaired by CM Murad Ali Shah, it was approved that a dedicated mobile application will be developed for cabinet proceedings. As part of this initiative, cabinet members will be provided with tablets containing only meeting agendas, minutes, and discussions.
In case of a minister's transfer, the tablet will be returned to the General Administration Department. The Sindh Cabinet allocated Rs150 million for procuring the necessary equipment.
Additionally, the cabinet approved a government-to-government supply contract for the Solar Home System project. The contract has been awarded to NRTC (National Radio & Telecommunication Corporation). Those earning up to Rs150 million from agriculture will be exempt from the tax.
Sindh agricultural tax slabs
Tax slabs are as follows:
- Rs150 million – Rs200 million: 1% tax
- Rs200 million – Rs250 million: 2% tax
- Rs250 million – Rs300 million: 3% tax
- Rs300 million – Rs350 million: 4% tax
- Rs350 million – Rs400 million: 6% tax
- Rs400 million – Rs500 million: 8% tax
- Above Rs500 million: 10% tax
Taxation on agricultural companies:
- Small agricultural companies will be taxed at 20%.
- Large agricultural companies will face a tax rate of 28%.
Concerns over inflation & IMF
During the meeting, Murad Ali Shah criticized the federal government for not consulting Sindh before engaging with the International Monetary Fund (IMF).
He warned that the agricultural tax would lead to higher prices of vegetables, wheat, and rice, but emphasized that the cabinet approved the tax in the national interest.
Murad Ali Shah also stated that he would engage with the federal government again to discuss the province’s concerns over economic policies.
Balochistan also passes agri tax bill
The Balochistan Assembly also passed a new law imposing taxes on agricultural income, targeting both individual landowners and farming companies. According to the legislation, agricultural income exceeding Rs600,000 will now be subject to taxation, and separate taxes will be levied on agricultural lands larger than 12.5 acres, calculated on a per-acre basis.
Additionally, farming companies will face taxes ranging from 20% to 29%.
During the assembly session, Provincial Finance Minister Asim Kurd Gello presented the draft law, outlining six income slabs for agricultural taxation:
- No tax on agricultural income up to Rs600,000.
- 15% tax on income between Rs600,000 and Rs1.2 million.
- A fixed tax of Rs90,000 on income of Rs1.2 million, plus an additional 20% tax on the amount exceeding Rs1.2 million up to Rs1.6 million.
- An additional 30% tax on income exceeding Rs1.6 million.
- A fixed tax of Rs650,000 on income between Rs3.2 million and Rs5.6 million, plus an additional 40% tax on income exceeding Rs3.2 million.
- A fixed tax of Rs1.61 million on income up to Rs5.6 million, with an additional 45% tax on income above that threshold.
Furthermore, a super tax has been introduced:
- 1% to 8% on annual agricultural income between Rs150 million and Rs500 million.
- A 10% super tax on income exceeding Rs500 million.
The opposition parties strongly opposed the new law, labeling it as "economic murder" of landowners. They argued that the taxation measures would disproportionately affect farmers and agricultural stakeholders, potentially destabilizing the province's agrarian economy.
