Peshawar: The Agricultural Income Tax Bill, which levies a super tax on wealthy farmers, was approved by the Khyber Pakhtunkhwa Assembly. This tax will go into effect on the first day of 2025. Three divisions and four zones are established on the province’s land by the law.A number of income tax rates are specified in the bill. A super tax of 90,000 rupees and an income tax of 15% would be imposed on farmers whose annual agricultural income surpasses 1.2 million rupees. A 30% income tax and a 170,000 rupee super tax would apply to anyone making more than 1.6 million rupees.
Earnings over 3.2 million rupees will be subject to a 40% income tax and a 650,000 rupee super tax. If the income exceeds 5.6 million rupees, the tax rate will be 45% income tax plus a super tax of 1.61 million rupees. Taxes will also need to be paid by corporate farmers. Smaller companies would pay 20% in taxes, while larger companies would pay 29%.Additional tax rates based on yearly agricultural revenue are also established under the Act.
1% tax will be applied to income over 150 million rupees, 2% tax to income over 200 million, 3% tax to income over 250 million, 4% tax to income over 300 million, 6% tax to income over 350 million, 8% tax to income over 400 million, and 10% tax to income over 500 million. Land bigger than 12.5 acres will be subject to land taxes of 1,200 rupees per acre in Zone One, 2,500 rupees per acre for land larger than 25 to 50 acres, and 3,500 rupees per acre for land larger than 50 acres. Zones Two and Three will have lower tax rates than Zone One.
For every extra day that taxes are not paid, there will be a 0.1% penalty. If a defaulter’s agricultural revenue is less than 1.2 million rupees, they could be punished 10,000 rupees. Notably, the Punjab Assembly passed the Agricultural Income Tax Bill on November 14, 2024, imposing taxes on animals and imposing a super tax on affluent farmers.
This new Agricultural Income Tax Bill seems quite detailed and ambitious. It’s interesting to see how the government is targeting wealthy farmers and corporate entities with higher tax rates. The tiered system for both income and land taxes appears to be an attempt to balance fairness and revenue generation. However, I wonder how this will impact small-scale farmers who might be struggling financially. Will there be any support or subsidies for them? Also, the penalties for late payments seem strict—could this discourage compliance rather than encourage it? What’s your take on whether this bill will achieve its intended goals without harming the agricultural sector?