IMF to Finally Reveal Bailout Review Date After Breakthrough in Sindh Agriculture Tax Law

President Asif Ali Zardari and Deputy Prime Minister Ishaq Dar brokered a breakthrough behind the scenes to make the Sindh Cabinet approve the new agriculture income tax law earlier this week. The Sindh Assembly unanimously passed the Sindh Agricultural Income Tax Act, 2025, on Monday. This was a key International Monetary Fund (IMF) condition. The federal government had failed to convince Sindh to pass the bill for 4 months before its passage this week, reported Express Tribune. The delay in implementing the law had stalled Pakistan’s IMF program review. The lender had demanded provincial governments align agricultural income tax with federal personal and corporate income tax regimes and introduce a super tax on high-income landlords. After the finance ministry’s repeated attempts to convince Sindh failed, Ishaq Dar met Zardari to address the issue and immediately called CM Murad Ali Shah and Balochistan Chief Minister Sarfaraz Bugti to expedite the legislation. The Bill states that agricultural income up to Rs. 600,000 annually will be exempt from tax, while the maximum tax rate for income exceeding Rs. 5.6 million annually will be 45 percent. A progressive super tax has also been introduced there will be no super tax on annual agricultural income up to Rs. 150 million, while a maximum super tax of 10 percent will apply to income exceeding Rs. 500 million annually. Additionally, the Bill aims to include corporate farming in the tax net. Small companies will be subject to a 20 percent tax rate on their annual agricultural income, while large companies will face a tax rate of 29 percent. Following Sindh’s approval of the law, Finance Minister Muhammad Aurangzeb expressed confidence in securing a successful IMF review to unlock over $1 billion in the second loan tranche. The IMF is now likely to announce review dates. The finance ministry expects the mission’s arrival by late February or early March.