Sindh leads other provinces in own-source revenue mobilisation, particularly through its tax authority’s effective collection of sales tax on services. However, its fiscal autonomy remains constrained by structural limitations and continued dependence on often-delayed federal transfers.

The government of Chief Minister Murad Ali Shah recently enacted the Sindh Agriculture Income Tax Act, 2025, aligning agriculture income tax (AIT) rates with federal individual and corporate tax rates, as well as with those of other provinces. Despite this legislative effort, actual revenue collection from agriculture income in FY25 remains modest, reportedly under Rs2 billion.

“We don’t expect a major spike in AIT collection this year,” said an official familiar with the matter. “The SRB [Sindh Revenue Board] is still in the process of establishing systems to effectively administer this tax. The sharp contrast between the old and new rates may come as a shock to many taxpayers, potentially triggering resistance to compliance. Moreover, the sector is already under considerable stress due to persistent water scarcity and the abolition of the support price system for crops.”

“A clearer picture of AIT’s impact on provincial revenues will emerge once net agricultural income is assessed and declared by agriculturists in September this year,” remarked a senior board member of the SRB board.

Despite performing relatively better than other provinces and showing steady........

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