Islamabad: Prime Minister Shehbaz Sharif on Wednesday appreciated the International Monetary Fund (IMF) for accepting Pakistan’s request to exclude the agriculture sector from new taxation measures, including levies on fertilizers and pesticides.
Addressing a federal cabinet meeting in Islamabad, the prime minister stated that the government had made it clear to the IMF that the agriculture sector was already under pressure and could not bear additional tax burdens. He said the exclusion of fertilizers and pesticides from taxation was critical to supporting farmers and ensuring food security in the country.
“We had made it clear that we will not impose agriculture tax, particularly on fertilizers and pesticides, as this sector is already under pressure,” the premier told cabinet members.
The IMF’s decision to accommodate Pakistan’s position comes amid negotiations related to the upcoming fiscal year’s economic framework and tax policy under the broader financial assistance program. The agreement not to tax key agricultural inputs is expected to bring relief to the farming community, which has been impacted by rising input costs, climate-related disruptions, and inflation.
Prime Minister Shehbaz also highlighted other key budgetary initiatives in the meeting, including an increase in the Public Sector Development Programme (PSDP) allocation to PKR 1,000 billion for FY2025–26. He expressed hope that these funds would be fully utilised to support infrastructure, health, education, and other development sectors.
Additionally, the prime minister noted that the government had introduced a more progressive taxation structure in the current budget, reducing the income tax rate for individuals earning between PKR 600,000 to PKR 1.2 million annually from 5% to just 1%.
He reaffirmed the government’s commitment to economic recovery and fiscal responsibility, noting that Pakistan had successfully averted a sovereign default in 2023 and is now on a path to stability and growth.
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