President Pakistan Businessmen and Intellectuals Forum (PBIF), President All Karachi Industrial Alliance (AKIA), Senior Vice Chairman of the Businessmen Panel of FPCCI and former provincial minister, Mian Zahid Hussain on Wednesday said taxing agricultural income can help reduce poverty and unemployment.
Collection of mere Rs2 billion by provinces from a sector representing 19.2 percent of the GDP is a joke therefore the responsibility should be given to FBR, he said.
Talking to the business community, the veteran business leader said that proper inclusion of agriculture sector in the tax net can help the government achieve R5.5 trillion tax targets while reducing load on other sectors.
The former minister noted that the industrial sector is 21 percent of the GDP but it is paying seventy percent taxes, the services sector is sixty percent of the GDP but it is paying almost thirty percent of the taxes while the agricultural sector is paying less than one percent of taxes.
Mian Zahid Hussain said that the taxation system is not balanced leading to deindustrialization and protests by trading community and it can be improved by imposing a tax on the agriculture sector.
He said that the majority of legislators have an agricultural background; they always claim to be serving masses but would not pay taxes. They should walk their talk by introducing a Constitutional amendment to make agriculture a federal subject.
Provinces lack capacity and will to collect agricultural tax and all they can do is collect Rs2 billion in taxes. Punjab pays Rs1.28 billion, Sindh Rs650 million, KP Rs88 million and Balochistan Rs12 million which is nothing as compared to potential.
He said that it is amazing that provinces would collect tax on the basis of the size of land and not on the basis of income which must be changed. Provincial tax authorities are very active in taxing the services sector but inactive when it comes to agriculture due to political pressure which is keeping provinces resource-starved and backward.