New tax slabs range from 15% to 45%, with higher rates for larger incomes and corporate farming.
The Sindh government has approved a bill imposing a tax on agricultural income, a move reportedly demanded by the International Monetary Fund (IMF) as a condition for the resumption of the bailout program.
Income between Rs600,000 to Rs1.2 million to be taxed at 15%, while higher brackets face 30% tax with a fixed collection of Rs170,000.
The Sindh Revenue Board (SRB) has released details of the new tax structure. Agricultural income up to Rs600,000 will remain tax-exempt. However, income between Rs600,000 and Rs1.2 million will be taxed at 15%. Higher income brackets face progressive tax rates, with 30% tax on income between Rs1.6 million and Rs3.2 million (with a fixed collection of Rs170,000), 40% on income between Rs3.2 million and Rs5.6 million (with a fixed collection of Rs650,000), and 45% on income exceeding Rs5.6 million (with a fixed collection of Rs1.61 million).
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Furthermore, a 10% super tax will be applied on income exceeding Rs500 million, while a 1% super tax will apply on income exceeding Rs150 million.
The bill also introduces corporate tax rates for agricultural companies, with small companies taxed at 20% and larger companies facing a 29% tax rate.
The SRB has emphasized that the tax collection and filing system will be fully automated, aiming for efficient and transparent administration.
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This move by the Sindh government is a significant step towards broadening the tax base and increasing government revenue. However, its impact on agricultural productivity and the concerns of farmers will need to be closely monitored.
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