Islamabad: Finance Minister Muhammad Aurangzeb declared on Wednesday that a tax on agricultural income is slated to begin on July 1, 2025, as part of the National Fiscal Pact (NFP) between the central government and provincial administrations. The announcement came amid discussions of various financial strategies and reforms aimed at enhancing Pakistan’s fiscal structure.
According to Zameen.Com, during the Senate Standing Committee on Finance meeting, there was a consensus that discussions with provincial authorities on the NFP are progressing well, with plans to introduce uniform legislation for taxing agricultural income by January, paving the way for its implementation in mid-2025. Additionally, Minister Aurangzeb addressed the ongoing negotiations with China regarding the reprofiling of Pakistan’s energy sector debt, indicating that discussions were advancing favorably with an MoU expected soon, likely during Chinese Prime Minister Li Qiang’s anticipated visit next week.
The finance minister noted the urgency of restructuring the energy sector’s debt, highlighting its impact on Pakistan’s energy costs and circular debt. The discussions with Chinese financial bodies are aimed at extending the repayment terms to a ten-year period. Furthermore, the outgoing Asian Development Bank (ADB) country director, Yong Ye, informed the committee of the ADB’s commitment to provide Pakistan with $8.4 billion over the next four years, including an immediate disbursement of $2.005 billion this year.
Other key issues addressed included the Federal Board of Revenue (FBR) Chairman Rashid Mehmood Langrial’s announcement of a crackdown on income tax non-filers set to begin next month, following a significant increase in tax return submissions. Additionally, the Senate panel passed the Banking Companies (Amendment) Bill 2024, enhancing the governance structure of the State Bank of Pakistan and preserving its autonomy.
The committee also expressed concerns over trade imbalances with Iran, discussing the imposition of a 10% levy on transport and business operations to counterbalance the deductions applied to Pakistani vehicles by Iranian authorities. This issue has been escalated to the Ministry of Communications to ensure equitable treatment in bilateral trade agreements.