Agriculture income declarations: FBR cannot share info due to legal restrictions, provinces told

The Federal Board of Revenue (FBR) has informed provinces that there are legal restrictions in Income Tax Ordinance 2001, barring the FBR from sharing information of declarations of agriculture income by income taxpayers with the provincial tax authorities. Sources told Business Recorder here on Monday that the Finance Division NFC Secretariat has issued revised minutes of meeting of the provincial finance secretaries which was held here under the chairmanship of additional finance secretary (budget) at the Finance Division. The meeting was held two months back and now the Finance Division NFC Secretariat has issued its revised decisions on agriculture income tax and communicated the same to the stakeholders.
The advisor Sindh Revenue Board stated that the government of Sindh would second the proposals of Punjab that agriculture income, as declared by any person in his federal income tax return, should be subjected to the AIT of the respective province. However, this will be possible only when FBR/PRAL share that declaration of agriculture income with the respective provincial governments/BORS Secondly, the government of Sindh has already conveyed the proposal that the land tax levied by the province should be re-named "Advance Agriculture Income Tax" and made adjustable against the final AIT payable to the provinces and also that the marketable surplus of cash crops may be levied to the withholding AIT adjustable against final AIT liability, provincial land tax and AIT laws may be reviewed to harmonize for uniform application in all the provinces.
The FBR member informed that there are legal restrictions in Income Tax Ordinance due to which it was not possible to share the information of income taxpayers. He, however, assured that the FBR is ready to extend full cooperation and facilitate the government of Sindh for further deliberations in this regard and to find out solution of the issue and chalk out the modalities which include removal of legal restrictions. He, however, advised that the government of Sindh should strengthen its own revenue collection system otherwise sharing of data would be of no use for them. It was finally agreed that the provinces would coordinate with the FBR in order to arrange a meeting with the FBR in the matter.
The additional secretary finance Punjab reiterated their earlier proposals that it should be at par with the income tax and be levied on income rather than landholdings. He informed that in Punjab, 80% of the landholdings get exemptions from AIT because the landowning communities get their holdings bifurcated in order to avoid AIT. He admitted that the existing AIT law needs drastic changes by plugging the lope holes and making it a progressive tax.
The representative from Sindh reiterated that land tax should be adjustable against AIT. He informed that the government of Sindh is considering reviewing its Land Tax & Agriculture Income Tax laws. The reports on Agriculture Income Tax by the World Bank and by M/S A. F Ferguson & Co. need to be studied in this regard. The special finance secretary Sindh also informed that the government of Sindh was making efforts to take administrative measures as well as for making agriculture income tax more effective, but such an effort has to be made by all provinces alike.