A Note on Estimates of Agricultural Income Tax in Pakistan

In the last two years, changes in public policy affecting agriculture in Pakistan have come in rapid succession. Of these, the announcement in January 1977 of the introduction of tax on agricultural incomes came as a major surprise to this author. For one thing, leading spokesmen for the government in 1974 saw “little potential surplus” which a tax on incomes in agriculture could generate without adversely affecting the prospects of agricultural growth. The agricultural lobby had quite obviously won the argument then. More importantly, there existed no estimates to counter the much publicized low magnitudes. I have found in only one published study a systematic attempt to derive estimates of agricultural tax in Pakistan [2].