Lahore: The Punjab government has proposed an increase in agriculture tax and a revision of the water cess structure as part of the Punjab Finance Bill 2026-27.
Under the proposed amendments to the Agriculture Income Tax Rules, no tax will be imposed on agricultural landholding of up to 12.5 acres. However, for land exceeding 12.5 acres and up to 25 acres, the per-acre tax has been increased from PKR 300 to PKR 1,000.
For landholding above 25 acres and up to 50 acres, the tax rate has also been raised to PKR 1,000 per acre, up from PKR 400. Similarly, agricultural land exceeding 50 acres will now be taxed at PKR 1,000 per acre, compared to the previous rate of PKR 500.
In addition, tax on orchards has been revised. The levy on matured orchards has been increased from PKR 600 to PKR 1,000 per acre, while unirrigated orchards will now be charged PKR 500 per acre instead of PKR 300.
The provincial government has also proposed a major revision in the water cess system, shifting from a crop-based mechanism to a flat-rate structure. Under the new proposed system, water cess will be charged at PKR 1,650 per acre for the Kharif season and PKR 850 per acre for the Rabi season.
Officials said the proposed changes are aimed at restructuring agricultural taxation and improving revenue collection under the broader fiscal framework of the province.
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