The International Monetary Fund (IMF) has sought details from provincial revenue authorities on their preparedness to begin collecting Agriculture Income Tax (AIT) from July 1, 2025, as part of broader tax reforms under the National Fiscal Pact (NFP).
According to a news report, the IMF review mission, during discussions with provincial representatives, indicated flexibility regarding delays in agriculture income tax collection, as a recent World Bank-led workshop in Islamabad was tasked with developing a roadmap for its implementation.
Additionally, the IMF asked provinces to transition the General Sales Tax (GST) on services from a positive to a negative list approach in the upcoming fiscal year 2025-26, a measure aimed at reducing tax evasion.Â
Provinces informed the IMF that while they agreed to the transition under the National Tax Council (NTC), approval from their respective cabinets and assemblies would be required during the next budget cycle.
The IMF also sought updates on tax reforms aimed at expanding provincial revenue generation, including efforts to enhance corporate taxation in agriculture, standardise property tax collection, and improve GST compliance. Provinces were asked to implement administrative reforms to close tax compliance gaps and develop a unified property tax framework.
Moreover, the IMF requested details on expanding the mandate of the National Tax Council to oversee tax policy design, including legal and administrative measures for property taxation.
The IMF’s recommendations aim to enhance revenue mobilisation at the provincial level and align tax collection with broader economic reform commitments.
