ISLAMABAD - Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb on Monday said that provinces would need to amend their agricultural income legislation to align with federal tax codes, with implementation set for January 2025.
The minister made these remarks during the meeting of the National Assembly Standing Committee on Finance and Revenue, which was held in the Parliament House, Islamabad, under the chairmanship of Syed Naveed Qamar, MNA/Chairman. Due to the sensitivity of the discussions, the department requested an in-camera session, which was partially agreed upon by the Committee, allowing select discussions and Q&A to be held in-camera. The minister for finance and revenue briefed the committee on the government’s commitments to the IMF, quantitative performance criteria, structural benchmarks on fiscal, governance, social, monetary and financial, energy sector, state-oriented enterprises and investment policy, continuous performance criteria, indicative targets and expectations from provinces. Federal minister briefed the committee about notable achievements which included the successful implementation of measures such as the zero new flow of State Bank credit to the government, the rationalization of deposit insurance legislation, and the ceiling on the govt’s primary budget deficit.
A key topic of discussion was the role of provincial governments in meeting IMF targets, especially regarding agricultural income tax reform. The minister informed the committee that all provinces were engaged before the current IMF program and that provinces would need to amend their agricultural income legislation to align with federal tax codes, with implementation set for January 2025. The committee acknowledged the necessity of increasing revenue but raised concerns about the potential negative impact of tripling agricultural income taxes. A recommendation was made to consider incentivized reduced rates to encourage tax compliance. The minister assured the committee that he would engage with provincial authorities to develop a comprehensive plan to enhance tax compliance and expand the tax base.
The chairman FBR briefed the committee on the revenue slippages, measures envisaged to offset the shortfalls, to meet the commitments. The committee required a comprehensive briefing from the chairman FBR on the transformation plan in the next meeting of the committee. The committee also desired a detailed briefing on structural benchmarks, performance criteria and indicative targets from the minister for finance and revenue in the next meeting. The meeting concluded with a shared resolve to continue working collaboratively to meet the government’s fiscal commitments and strengthen Pakistan’s economy.
The meeting was attended by Bilal Azhar Kayani, Omar Ayub Khan, Rana Iradat Sharif Khan, Ms Zeb Jaffar, Muhammad Usman Awaisi, Kesoo Mal Kheal Das, Ms Hina Rabbani Khar (ON ZOOM), Dr. Mirza Ikhtiar Baig, Dr. Nafisa Shah, Muhammad Jawed Hanif Khan, Arshad Abdullah Vohra, Muhammad Mobeen Arif (ON ZOOM), and Ms. Shahida Begum, MNAs. The meeting was also attended by Muhammad Aurangzeb, Minister for Finance, secretary Finance, chairman FBR, chairman SECP, and other senior officers from the Ministry.