By Uzma Ehtasham
The Pakistan People’s Party (PPP), long branded as a party of feudal interests, has made an unexpected move by introducing an agricultural income tax law in Sindh. In a country where landowners have historically evaded taxation while industries and salaried class have carried the burden of revenue generation, this development holds the promise of long-overdue fiscal equity. However, the success of such legislation does not merely rest on its passage; it depends on an unwavering commitment to its implementation, free from the usual loopholes that serve to shield the privileged.
For decades, Pakistan’s landed aristocracy has wielded enough political influence to keep their wealth largely untaxed. The agricultural sector, which contributes nearly 23 percent to the country’s GDP, has functioned with little to no formal taxation, despite the state’s desperate need to expand its revenue base. The new tax law, therefore, seems like a meaningful attempt to correct a historical imbalance. Yet, there are already murmurs that the province’s most influential landowners have been reassured that this legislation is not meant for them. The law may exist on paper, but whether it bites where it should remains uncertain. If history is any indication, the burden will likely fall on small and medium landowners—those without deep political ties—while the true feudal elite, cloaked in their vast networks of influence, remain untouched.
The Sindh Agricultural Income Tax Act 2025 outlines a structured taxation model. It exempts agricultural incomes below Rs600,000 annually, levies a 15 percent tax on those earning between Rs600,000 and Rs12 lakh, and imposes escalating rates up to 45 percent for incomes exceeding Rs5.6 million. Additionally, a super tax has been proposed, ranging from 1 percent for those earning over Rs150 million annually to 10 percent for those making more than Rs500 million. The framework appears progressive, at least on the surface. But Pakistan’s taxation system has often been marred by selective application, bureaucratic inefficiencies, and political interference, all of which have historically ensured that those meant to pay the most, end up paying the least.
The necessity of this law is undeniable. For far too long, salaried individuals and urban businesses have been treated as the government’s financial lifeline. Their incomes are taxed at every turn—directly through income tax and indirectly through levies on fuel, electricity, and consumer goods. Meanwhile, Pakistan’s wealthiest landowners have continued to enjoy tax exemptions under the guise of protecting the agricultural sector. The state has, time and again, opted for the easier route: squeezing those already within the tax net instead of going after those who remain outside it. If this new law is to be taken seriously, it must be enforced with an iron resolve, and not merely serve as another showpiece for political posturing.
But bringing agriculture under taxation is only a fraction of the battle. There remains an urgent need to widen the tax net beyond this sector. Fertilizer and cement industries, for instance, continue to enjoy undue privileges, while large-scale traders and real estate giants manage to dodge tax obligations through various legal and bureaucratic manoeuvres. The government’s fixation with taxing salaried individuals and imposing regressive indirect taxes has stifled economic growth and widened income disparities. If Pakistan is to move towards sustainable fiscal policies, it must move beyond patchwork solutions and implement a holistic tax structure that ensures fair contribution from all economic sectors.
The Sindh Assembly is expected to approve this law soon, but passing it is merely the first step. The true test will be in its implementation. Will the government resist the inevitable pressure from powerful landowning elites? Will it close potential loopholes that might allow selective exemptions? Will it prove, for once, that Pakistan’s taxation system is not just another tool to shield the privileged while squeezing the lower and middle classes? The fate of this legislation will determine whether Pakistan is finally ready to break away from its long history of economic inequity or if it will continue to protect the wealthiest while burdening those already struggling. If genuine political will exists, this could mark the beginning of a fairer taxation system. If not, it will merely be another instance of a well-intentioned law reduced to a paper tiger, roaring only for those too weak to resist its bite.
(The writer is a public health professional and possesses expertise in health communication, having keen interest in national and international affairs, can be reached at uzma@metro-morning.com)
