AIRLINK 72.59 Increased By ▲ 3.39 (4.9%)
BOP 4.99 Increased By ▲ 0.09 (1.84%)
CNERGY 4.29 Increased By ▲ 0.03 (0.7%)
DFML 31.71 Increased By ▲ 0.46 (1.47%)
DGKC 80.90 Increased By ▲ 3.65 (4.72%)
FCCL 21.42 Increased By ▲ 1.42 (7.1%)
FFBL 35.19 Increased By ▲ 0.19 (0.54%)
FFL 9.33 Increased By ▲ 0.21 (2.3%)
GGL 9.82 Increased By ▲ 0.02 (0.2%)
HBL 112.40 Decreased By ▼ -0.36 (-0.32%)
HUBC 136.50 Increased By ▲ 3.46 (2.6%)
HUMNL 7.14 Increased By ▲ 0.19 (2.73%)
KEL 4.35 Increased By ▲ 0.12 (2.84%)
KOSM 4.35 Increased By ▲ 0.10 (2.35%)
MLCF 37.67 Increased By ▲ 1.07 (2.92%)
OGDC 137.75 Increased By ▲ 4.88 (3.67%)
PAEL 23.41 Increased By ▲ 0.77 (3.4%)
PIAA 24.55 Increased By ▲ 0.35 (1.45%)
PIBTL 6.63 Increased By ▲ 0.17 (2.63%)
PPL 125.05 Increased By ▲ 8.75 (7.52%)
PRL 26.99 Increased By ▲ 1.09 (4.21%)
PTC 13.32 Increased By ▲ 0.24 (1.83%)
SEARL 52.70 Increased By ▲ 0.70 (1.35%)
SNGP 70.80 Increased By ▲ 3.20 (4.73%)
SSGC 10.54 No Change ▼ 0.00 (0%)
TELE 8.33 Increased By ▲ 0.05 (0.6%)
TPLP 10.95 Increased By ▲ 0.15 (1.39%)
TRG 60.60 Increased By ▲ 1.31 (2.21%)
UNITY 25.10 Decreased By ▼ -0.03 (-0.12%)
WTL 1.28 Increased By ▲ 0.01 (0.79%)
BR100 7,566 Increased By 157.7 (2.13%)
BR30 24,786 Increased By 749.4 (3.12%)
KSE100 71,902 Increased By 1235.2 (1.75%)
KSE30 23,595 Increased By 371 (1.6%)

ISLAMABAD: The province-wise income tax collection from agricultural income revealed Punjab collection stood at Rs913 million; Sindh Rs559 million; KP Rs100 million and Balochistan collection amounted to Rs 17 million during tax year 2018.

According to the FBR report on "Tax-Gap Analysis of Agricultural Income" revealed that the agricultural income is exempt from income tax under section 41 of the Income Tax Ordinance 2001. However, it falls under the provincial domain as per the Constitution of Pakistan, and the provinces have the mandate to levy tax on agricultural incomes. The said breakup is the provincial collection of income tax on agricultural income for FY 2018.

In order to measure the actual potential of revenue from agriculture, an estimation has been carried out using data from 2010 Agricultural Census, FBR said.

The key assumption in this estimation is that the average income per acre earned by farmer has been taken at Rs 50,000, keeping in view current year's average price levels of commodities. Farm sizes have been categorized as per column 2 of the table below. Farms smaller than 7.5 acres have not been considered being of subsistence income level. Income for each farm size (column 5) is estimated by multiplying cultivated area (acres) for each category with average income per acre (Rs 50,000). If statutory slab wise tax rates are applied on average income per farm for the six categories of farm sizes, the estimated revenue forgone due to this exemption comes to Rs 69.5 billion annually.

It is estimated that Rs 69.5 billion is a tax gap under section 41 of the Ordinance on account of provinces having the mandate to levy tax on agricultural incomes, FBR added.

Copyright Business Recorder, 2020

Comments

Comments are closed.