IMF Policy Discussion Papers

Taxing Agriculture in Pakistan

Author/Editor:

Mahmood Hasan Khan ; Mohsin S. Khan

Publication Date:

May 1, 1998

Electronic Access:

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Summary:

Pakistan’s economic performance has been marred by persistently high fiscal deficits which have resulted largely from the inability to raise sufficient revenues. Agriculture is a dominant sector of the economy, but generates very limited revenue from direct taxes on agricultural producers. The paper first reviews the history of attempts to tax agriculture in Pakistan, the purpose of which is to underscore the difficulty in adopting and implementing a sound agricultural tax policy. It then examines various alternatives with regard to the taxation of agricultural land and incomes. Finally, it presents the outlines of a full-fledged agricultural income tax that could be implemented within the Constitutional framework in the next three to five years.

Series:

Policy Discussion Paper No. 1998/003

Subject:

Agricultural tax Income and capital gains taxes Income tax systems Land tax National accounts Personal income Taxes