Hafiz Mudassir Rizwan
In a contentious move, the Punjab Assembly passed the Punjab Agricultural Income Tax Bill 2024 with a majority vote, despite strong opposition from its coalition partner, the Pakistan Peoples Party (PPP). The bill, which introduces significant reforms to the agricultural taxation system, was approved after the ruling party, the Pakistan Muslim League-Nawaz (PML-N), accepted all amendments proposed by the opposition. However, the passage of the bill was far from smooth, as the PPP staged a walkout in protest, signaling deep divisions within the coalition.
The bill’s passage marks a notable shift in the provincial government’s approach to agricultural taxation, with the Punjab government demonstrating its resolve to push forward with reforms despite internal opposition. The bill will come into effect in 2025, and it introduces a range of penalties for farmers failing to comply with the new tax regime. For instance, farmers with incomes under Rs 12 lakh will face fines of Rs 10,000, while those with earnings under Rs 4 crore will be penalized Rs 25,000. High-income farmers earning more than Rs 4 crore will incur a Rs 50,000 fine. Furthermore, late payment of taxes will incur a daily penalty of 0.1%, which could add significant pressure on farmers.
The passage of the bill was achieved after a session of the Punjab Assembly, chaired by Speaker Malik Muhammad Ahmad Khan, in which the majority vote was secured. Despite this success, the PPP’s objections remain central to the debate, with the party accusing the government of not adequately consulting them on the bill’s provisions. PPP’s Ali Haider Gillani voiced his dissatisfaction, claiming that while the opposition’s amendments were accepted, the bill still amounted to an “economic murder” of farmers. The PPP’s decision to walk out during the session underscored the gravity of their opposition and pointed to the internal rifts within the ruling coalition.
In response to the criticism, Mian Mujtaba Shuja-ur-Rehman, the Minister for Parliamentary Affairs, defended the bill, stressing that the government’s goal was to reform the agricultural and livestock sectors in Punjab. He assured that the new measures were designed to provide substantial support to farmers in the province, but these reassurances did little to quell the growing discontent among opposition ranks. The PPP’s dissatisfaction highlights a broader concern about the imposition of additional taxes on an already struggling agricultural sector, which many see as an unfair burden on small farmers.
This bill introduces a super tax on high-income farmers, a measure that has been contentious from the outset. While the government’s intention is to increase revenue from the agricultural sector, critics argue that the tax burden could disproportionately affect farmers already struggling with rising costs and insufficient support from the state. In an economy where agriculture remains a cornerstone, there is concern that the new tax regime could stifle growth and exacerbate economic hardships for those in the sector.
The approval of this bill also included the Punjab Registration Amendment Bill 2024, which grants the Chief Minister’s Advisor the authority to speak in the Assembly. This was passed with little controversy compared to the agricultural income tax bill, and the session was prorogued shortly after the completion of the agenda.
