GDP share no measure of farm tax

Agricultural experts in Pakistan say the sector's tax capacity cannot be read from its GDP share, The Express Tribune reported. Their case is that farm profits depend on unstable crop rates, harvests, cultivation costs, adverse weather and shifting markets. Equating farm output with taxable income, they warned, could lead to unrealistic revenue targets, especially for small growers who often receive less than official rates.

Mahmood Nawaz Shah, president of the Sindh Abadgar Board, argued that economic output and actual farm income are distinct, using wheat as his example. He noted that the government announced Rs4,000 per 40 kg for the 2024-25 wheat season, later revised to Rs3,900, yet growers in major producing areas sold well below those figures. He proposed estimating tax potential from average profitability over five to seven years instead of relying on GDP share.

Muhammad Ali Iqbal of Concave Agri Services said more than eight million farmers work the land, most on small holdings, which makes one uniform tax structure hard to apply. He wants tax assessments to consider production costs, harvests and the prices farmers actually receive. He also suggested that satellite imagery, yield-estimation algorithms and remote sensing could estimate crop output at district and tehsil level. Aamer Hayat Bhandara of Agriculture Republic urged electronic weighing of produce in mandis, creating a digital farm-to-fork record that could reduce under-reporting.