Islamabad: Finance Minister Muhammad Aurangzeb announced on Wednesday that a tax on the agriculture sector will be implemented starting July 1, 2025, under the National Fiscal Pact (NFP) with the provinces. The news was reported on October 10.
As per details, the Senate Standing Committee on Finance meeting expressed optimism that discussions with provincial authorities regarding the NFP were progressing smoothly. A uniform legislation for taxing agricultural income is expected to be introduced by January, with collection beginning in July 2025.
In response to queries about energy debt reprofiling negotiations with China, Aurangzeb indicated that talks were advancing, and an MoU is anticipated to be signed soon. This comes amidst speculation about a potential agreement during Chinese Prime Minister Li Qiang’s upcoming visit to Pakistan next week.
The minister emphasised that Pakistan had formally requested reprofiling of energy sector debt due to heavy capacity payments, which have resulted in inflated energy costs and escalating circular debt. Ongoing discussions with Chinese financial institutions will focus on adjusting repayment terms to extend the current debt repayment period to ten years.
During the meeting, Yong Ye, the outgoing country director of the Asian Development Bank (ADB), informed the committee that the ADB plans to provide Pakistan with $8.4 billion over the next four years, including $2.005 billion this year.
Action Against Non-Filers
Federal Board of Revenue (FBR) Chairman Rashid Mehmood Langrial announced that income tax returns had more than doubled to four million, with no extensions granted for filing deadlines. A crackdown on non-filers is set to begin next month, as the government aims to increase compliance among tax evaders.
Banking Bill Approved
The Senate panel unanimously passed the Banking Companies (Amendment) Bill 2024, with amendments that will enhance the governance structure of the State Bank of Pakistan (SBP). The finance minister highlighted the importance of maintaining the central bank’s autonomy and hinted at future amendments regarding the dual nationality of top SBP executives.
Concerns Over Trade Imbalances with Iran
The committee also discussed imposing a 10% levy on transport and business operations between Pakistan and Iran. Reports indicated that Iranian authorities deduct 10% from fares of Pakistani vehicles transporting goods, whereas Iranian vehicles do not face similar charges. The FBR has raised this issue with the Ministry of Communications, urging them to address it with Iranian officials to ensure fair treatment in bilateral trade.
