From 2025, provinces to shift from rent-based to capital-based property valuations, aligning with IMF-backed reforms.
The International Monetary Fund (IMF) has confirmed that all four provinces in Pakistan are working on a uniform property tax system, set to launch in fiscal year 2025-26. This new system will replace the current rent-based valuation with a capital value approach, aiming to improve fairness and increase tax revenues.
Big Tax Changes Ahead: Agriculture and Property Sectors Under New Rules
New income tax rules for farmers and landowners begin in 2025 with stricter enforcement by 2026.
According to the latest IMF report, Pakistan’s provinces have also taken a bold step by reforming Agriculture Income Tax (AIT). The updated laws bring small farmers under federal personal income tax rules, while larger commercial farmers will follow corporate tax laws. These changes apply to income from January 1, 2025, with taxes collected in September 2025.
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In partnership with the World Bank and IMF, provinces are creating detailed enforcement plans. These will focus on improving compliance, detecting underreported income, and launching public awareness campaigns by June 2025.
GST on Services Also Revamped Across Provinces
Provinces switch from ‘positive list’ to ‘negative list’ GST model, effective FY26.
Another major reform includes the move from a positive list to a negative list system for GST on services. While not identical across provinces, the list will exempt essential services like health, education, and government utilities.
These updates will be finalized in the upcoming National Tax Council (NTC) meeting in April 2025, where provincial authorities will discuss harmonizing these new frameworks further.
