Agricultural Taxation in Punjab: The Missing Billions
Published - Feb 1, 2016A key objective of this paper is to estimate the revenue potential from different modes of agricultural land and income taxation in Punjab, and to allow for a more informed debate and discussion on the issue of agricultural taxation in Pakistan. We explore the revenue potential of four possible modes of taxation, including land-based taxation under PAITA 1997; a combination of land- and income-based taxes under PAITA 1997; entirely income-based taxation under PAITA 1997; and income-based taxation at rates specified by the Income Tax Ordinance (ITO) 2001 (Government of Pakistan 2014a) as amended under the Finance Act for the relevant fiscal years, for comparable non-agricultural incomes.
Our findings reveal the great differences in revenue potential from these different taxation modes and show that taxing agricultural incomes at rates comparable with non-agricultural incomes could have raised over Rs53 billion in Punjab in FY2014. This could have financed the entire provincial government‘s recurrent and development expenditure on health services in that year, which was about Rs51 billion.
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Nasim, A., & Mukhtar, H. (2016). Agricultural Taxation in Punjab: The Missing Billions Working Paper No. 01/16. Institute of Development and Economic Alternatives (IDEAS).