Sindh to tax agricultural income up to 45 pc

The Sindh Cabinet has approved a new Agricultural Income Tax Bill, introducing a 45 percent tax rate on incomes exceeding Rs. 5.6 million annually. The bill, set to take effect on January 1, 2025, also includes a progressive super tax, with no levy on incomes up to Rs. 150 million and a maximum of 10 percent on earnings beyond Rs. 500 million.

The decision, made during a meeting chaired by Chief Minister Syed Murad Ali Shah at CM House, aligns with the National Fiscal Pact between the federal and provincial governments. The Sindh Revenue Board (SRB) will oversee tax collection and enforcement under the new framework.

Under the bill, agricultural income up to Rs. 600,000 per year remains tax-free. However, those earning beyond Rs. 5.6 million annually will be taxed at 45 percent. The law also brings corporate farming under taxation, with small companies paying 20 percent and large firms 29 percent. Livestock remains exempt, and the previous advance tax based on land cultivation has been abolished.

The new law is expected to broaden Sindh’s tax base, improve transparency, and create an equitable taxation system in the agricultural sector. The SRB, with its track record in tax collection, will ensure a smooth transition to the new system, which will be fully automated for efficiency. The cabinet also reviewed the biannual National Finance Commission (NFC) report, noting that Sindh received Rs. 3,002.43 billion over three years, falling short by Rs. 77.16 billion.

The federal government has since compensated for the deficit. Additionally, Sindh received Rs. 1,325.35 billion in Straight Transfers but faced a shortfall of Rs. 126.64 billion, which has now been addressed.

Currently, Punjab holds the largest share of the divisible pool at 51.74 percent, followed by Sindh at 24.55 percent, Khyber Pakhtunkhwa at 14.62 percent, and Balochistan at 9.09 percent. In an effort to modernize governance, the Sindh government has introduced a digital system for cabinet proceedings.

The newly launched Sindh Cabinet E-Portal, inspired by the federal government’s digitization initiatives, will enable a paperless workflow. Under this system, all cabinet members will receive iPads with SIM-based internet connectivity, replacing traditional LAN networks. The portal will provide digital access to working papers, facilitate e-approvals, and issue real-time notifications, marking a shift towards a fully digital governance framework.