LAHORE  -  Amid strong opposition from the PPP and other opposition parties, the Punjab Assembly on Thursday passed the Agricultural Income Tax (Amendment) Bill removing all exemptions on the agricultural income which will now be taxed under the new law.  The new legislation will empower the government to levy a super tax on farmers with higher incomes. Taxes will also be imposed on the income earned from livestock, according to the bill. The PML-N dominated House rejected all amendments proposed by the opposition with a majority vote. The PPP, an allied party of the PML-N in the center and Punjab,   staged a boycott from the Assembly when the bill was presented for approval. Taxes on livestock will also be considered part of the agricultural tax, according to the bill. The concept of livestock will be defined as per the Punjab Livestock Breeding Act 2014. The International Monetary Fund (IMF) has long advocated for taxing agricultural income as a condition for loan eligibility. An IMF team is currently in Pakistan and engaged with the provincial governments to ensure that they comply with the set conditions. Successive governments in the past have avoided bringing agricultural income under the tax net fearing a loss in their vote bank. Over 60 percent of representation in the country’s legislatures comes from the rural areas. Once signed into law by the Punjab governor, the bill will enforce penalties on agricultural income tax defaulters, charging a 0.1 percent penalty on the tax amount for each additional day of delay. Defaulters earning below 1.2 million rupees could face fines up to Rs 10,000; those earning under 40 million rupees could be fined Rs 25,000; and those with incomes exceeding 40 million rupees could face fines of Rs 50,000. The 2024 Act also abolishes the tax schedule set by the 1997 Agricultural Income Tax Act.  The PPP, part of the ruling coalition, strongly opposed the 2024 Act, with its Parliamentary Leader in the Punjab Assembly, Ali Haider Gilani, stating that the Punjab government did not consult the PPP on the bill. “It seems the government doesn’t need our votes. They may pass the bill with their majority, but PPP will not support it,” Gilani told the media following the PPP’s walkout. The Agricultural Income Tax Act 2024 also abolishes the tax schedule from the 1997 Agricultural Income Tax Act. The PPP  will never support imposing any tax on farmers, he said, adding that the PPP was a pro-farmers party. “We are opposing the bill because the government did not share the draft of the bill with us”, he remarked.

He further stated that the government had not even engaged in any dialogue with the PPP on the bill. He said the issue of farmers was very sensitive, and the PPP will not allow any pressure to be put on them. During discussion on the bill, the PTI-led opposition parties opposed the approval of the Agricultural Income Tax Bill. PTI Parliamentary Leader Ali Imtiaz Warraich stated that the agriculture sector in Punjab was already in decline, and all economic indicators show that farmers were at a loss.

 “Farmers have already sold their wheat at a loss, and they are forced to buy fertilizers, pesticides, and electricity at exorbitant prices. Now, the government is going to impose an income tax, which will further burden the farmers”, he told the House. Opposition’s Rana Aftab Ahmad said that his party’s members had proposed some amendments and also submitted a dissenting note during the discussion in the Standing Committee, but these were not included in the report. “Today is the darkest day, the day when a tax is being imposed on agriculture”,he remarked. Citing article 142 of the Constitution, Rana Aftab said that taxes cannot be imposed on agriculture. “Therefore, this bill is in conflict with the Constitution”, he maintained.

Brigadier (Retd) Mushtaq Ahmad of the PTI said it was not the PTI but the present regime  who surrendered to the IMF dictates. Another opposition member Ahmar Rashid Bhatti remarked that it seemed the government was taking revenge on the farmers because the farmers and the public did not vote for them.

Rashid Bhatti highlighted that the tax base is being altered, and taxes will now be imposed on holdings exceeding 12.5 acres. Farmers earning between 6 to 12 lakh rupees will pay a 15 per cent  agricultural tax while those with an income of over 12 lakh rupees will pay a 20 per cent tax.

He further explained that a farmer earning between 16 lakh and 32 lakh rupees will pay a tax of Rs 170,000 while a farmer earning between 32 lakh and 56 lakh rupees will pay a tax of Rs 650,000.

Defending the new legislation, Punjab Minister for Parliamentary Affairs, Mujtaba Shujaur Rehman said that the government was introducing a new regime in agriculture.  

In the statement of objects and reasons which is part of the bill, it has been stated that there is a need to levy equitable agricultural income tax according to the income generated from the agricultural income. Further, income from livestock is also required to be included in the agriculture income for the purposes of the tax under Punjab Agricultural Income Tax Act , 1997. Further, for the purpose of amendments in the Schedules of the said Act, were required to be made time and again in line with the rates to be determined at the federal level. Therefore, it is proposed that such rates on agricultural income may be fixed through rules made by the Government for smooth functioning and timely execution.