The federal government is considering a new strategy to strengthen agricultural income tax collection as part of efforts to meet commitments agreed with the International Monetary Fund (IMF).
According to sources, the government has begun working with the provinces on an alternative action plan aimed at improving the collection of agricultural income tax and ensuring that the agreed revenue targets are achieved.
Under the proposed strategy, the government may move towards expanding the application of income tax on agricultural earnings. The initiative is being considered in the wake of the IMF’s emphasis on broadening the tax base and improving revenue mobilisation.
Sources said the provinces could be given additional time to implement the required measures and improve compliance among taxpayers in the agriculture sector. The proposed deadline for the provinces to meet agricultural income tax collection and tax-return targets is September 30, 2026.
The development comes as the government seeks to demonstrate progress on fiscal reforms under its IMF programme. Agricultural income taxation is largely administered at the provincial level, making coordination between the federal government and provincial authorities important for achieving the desired results.
Officials are reportedly examining different options to increase tax compliance while developing a framework for the provinces to meet their respective collection targets. The proposed measures could include stronger monitoring of agricultural incomes and improvements in the filing of tax returns.
The government is expected to hold further consultations with the provinces before finalising the alternative action plan. Any changes to the existing taxation framework would also require the relevant authorities to assess their economic and administrative implications.
