The Khyber Pakhtunkhwa government has tabled the KP Agricultural Income Tax Bill 2025 in the provincial parliament (Khyber Pakhtunkhwa assembly).
The bill, if approved, will take effect in January, introducing a structured taxation system on agricultural income across the province.Under the KP Agricultural Income Tax Bill 2025, individuals earning between 600,000 and 1.2mn rupees ($2,145-$4,290) annually from agriculture will pay a 15% tax. Earnings from 1.2mn to 1.6mn rupees ($4,290-$5,720) will be taxed at 20%, while income between 1.6mn and 3.2mn rupees ($5,720-$11,430) will incur a 30% levy.
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For income ranging from 3.2mn to 5.6mn rupees ($11,430-$20,010), the tax rate is set at 40%, with a 45% tax on earnings exceeding 5.6mn rupees ($20,010).
Additionally, a super tax will apply to agricultural incomes exceeding 150mn rupees ($536,250).The bill requires landowners with holdings in multiple Patwar Circles to disclose location details, while cultivable land exceeding 150 kanals or uncultivated land over 100 acres will also be taxed. Heirs will be liable for any unpaid agricultural taxes and dues upon the death of the taxpayer.
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Revenue collection will be streamlined through zonal divisions, with daily penalties of 0.1% for tax defaulters.The proposed legislation divides agricultural land into four zones, with taxes ranging from 1,200 rupees ($4.30) per acre in Zone 1 to 500 rupees ($1.79) in Zone 3. Zone 4 exempts land below 12.5 acres but imposes a 300-rupee ($1.07) tax on holdings between 12.5 and 125 acres. Corporate farming will also come under the tax framework, with large companies facing a 29% levy.
The KP government has also proposed a police-style regulatory force to enforce 19 laws, including those on environmental protection, price control, and food safety. The force will operate with dedicated police stations and uniforms to ensure compliance.
