The Punjab state government on November 14, 2024 promulgated the Agricultural Income Tax Amendment Bill to include livestock income tax.

Amid strong opposition from a pro-farmers party, the government still prevailed and aimed a blow at especially livestock keepers.

From 2025, failure to pay livestock levy on time will attract a daily penalty equal to 0.1% of the total tax.

This seemingly hard stance is however tied to a previous law known as the Livestock Breeding Act 2014.

On top of this, there could also be 40% tax on the farming community, which some describe as “economic murder.”

The larger agricultural sector will thereby see a revision of the tax regime that has been in place since 1997. Defaulting farmers with earnings below 1.2 million Pakistani  rupees ($4,320) will attract a 10,000-rupee ($36) penalty while defaulters earning above 40 million Pakistani rupees ($144,000) will suffer the heaviest penalties. 

Apart from livestock, large-scale cotton farmers who dominate the country’s commercial crop sector will also toe the levy line. 

Livestock Importance 

All focus is now on the important livestock sector of Punjab, which accounts for 57% of Pakistan’s livestock numbers.

Citizenry directly involved in the raising of domestic animals number around 40  million, making the sector a major employer.

Besides, a sizable margin of the 65.7 million kiloliters of milk from Pakistan each year comes from this one state. This is especially possible because a large proportion of the 70,000 acres under livestock in the state are dairy-based.

As such, the passing of the livestock income tax in Punjab will impact millions who economically rely on domestic animals. Besides, it will also concern those who already pay the tax including large-scale cotton and wheat growers. To put this into perspective, below statistics reveal hard figures of the Punjabi agricultural taxation economy.

Punjab Agriculture and Livestock Income Tax Statistics 

Punjab ranks foremost among Pakistan’s states in terms of livestock, crop and land-based agricultural tax collection. In the 2017-18 fiscal year, the state contributed 5 billion Pakistani rupees ($18 million) in land-based tax revenue. The second place Sindh state collected half the figure at 2.5 billion rupees ($9 million). This tax represents the total crop revenue estimate of Punjab, which totaled 134 billion rupees ($482.4 million), in the 2017-18 period.

How big is the livestock sector in Punjab as a proportion of the national economy? 

Around 8 to 10% of the entire agricultural exports of Pakistan come from Punjab’s livestock sector. According to the government, the sector accounted for 14.04% of the national Gross Domestic Product in the 2021-22 fiscal year. Additionally, around 83% of all dairy farmers in Punjab are smallholder and provide 50% of the state’s milk supplies per year. 

Which are the biggest crops of Punjab? 

Wheat is the biggest commercial crop in Punjab, as it accounts for 71.17% of national production.  Cotton follows in importance, whereby again Punjab leads national output with a 79% share. 

How much is the total crop tax in Punjab?

Punjab brings between at least 34 billion Pakistani rupees ($122.4 million) worth of crop tax revenue each year (2017-18 statistics).  This is the highest in Pakistan ahead of Sindh’s 8 billion rupees ($28.8 million), as of the 2017-18 fiscal year.