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Tax On Agriculture in Pakistan
Tax On Agriculture in Pakistan
It is very old issue in Pakistan. A number of commissions were set up in the past to decide this
problem.
A common man simply says that when govt. of Pakistan is imposing taxes on all the areas so
why the agricultural income is exempted from tax. The budget deficit of Pakistan is increasing
day by day. This deficit can be reduced by imposing tax on agricultural income.
Following are the main arguments in favor and against the agriculture tax :
FAVORABLE ARGUMENTS
1. Canon of Equality :
The traders, producers, industrialist, servants are paying taxes. So why not the agriculturist.
There are big land lords in the country. So they should also contribute their share to the state.
2. Subsidies to the Farmers :
Govt. provides subsidies on inputs, like fertilizers and electricity. Govt. also provides them
loans on low rate of interest. The burden of taxes is small as compared to concessions. So farmer
must pay the tax on his income.
3. Increasing in the Value of Land :
As the infrastructure facilities like roads, electricity, and education is increasing the value of
land property is also increasing. Govt. is spending a huge amount on these facilities, so it
should receive the agriculture tax.
4. Greater Share in GDP :
The agriculture share in GDP is 26% while its contribution to total tax collection is 4% so there is
logic to impose the tax on agricultural income.
5. Low Rate of Savings :
According the contribution in GDP of this sector its savings are low. This sector is spending the
money very lavishly. So another way is that compulsory savings should be received from this
sector.
6. Income Tax is Elastic :-
Income tax on agriculture is more elastic than land revenue. As the output per acre is increasing
due to better inputs revenue of the Govt. should also increase.
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already living below the subsistence level.
6. Big Landlords Will Escape :
Technically big lords have very small holdings in their account. Because in the books they have
transferred lands to save themselves. So they will escape from the tax net and there will be
small collection of revenue.
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