Agri tax won’t yield big amount: Bengali

Noted development economist Dr Kaiser Bengali has said attempts to mobilise revenue through income tax on agriculture won’t generate a substantial amount given the average farm size in the country. Speaking to journalists after holding a training workshop on budget reporting at the Karachi Press Club on Wednesday, Dr Bengali said a majority of growers work on small farms and earn barely enough to qualify for income tax. Income tax on agricultural income is a provincial subject and applies to those farmers that earn Rs600,000 or more a year. Its collection remains minimal though, drawing vocal protests from the urban segments of society. “I used to be a proponent of taxing agricultural income until 10-12 years ago. I changed my opinion after looking at data, which shows the number of large landholders is so small that it’d hardly make a significant impact on the total revenue generation,” he said. In 2021-22, the latest fiscal year for which provincial data is available, Sindh collected only Rs707.4 million in tax on agricultural income. The sum amounted to less than 0.3 per cent of total provincial tax receipts in the same year.