The International Monetary Fund (IMF) mission is set to meet with provincial government officials today to assess the progress on implementing a 45% tax on agricultural income, a critical condition of the IMF’s $7 billion loan program.
According to sources at ProPakistani, none of the four provinces—Punjab, Khyber Pakhtunkhwa (KPK), Sindh, and Balochistan—met the October 31 deadline to enact this tax. Punjab’s cabinet approved the bill, and Khyber Pakhtunkhwa has prepared a draft, but Sindh and Balochistan have yet to make any progress.
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Under the National Fiscal Pact, all provinces agreed that the agricultural income tax collection would begin on January 1, 2025. The IMF mission will be briefed on the legislative delays and the provinces’ responsibilities in economic and tax reforms, including federal obligations for higher education, health, and infrastructure development.
The IMF is also expected to evaluate provincial budget performance. Provinces were collectively projected to achieve a budget surplus of Rs. 342 billion in the first quarter; however, due to a Rs. 160 billion deficit in Punjab, the actual surplus was reduced to Rs. 182 billion from July to September.
