Punjab Province

Lahore | ReNews Pakistan
The Punjab government has proposed significant changes to agricultural taxation and irrigation charges under the Punjab Finance Bill 2026, introducing higher tax rates on larger landholdings and orchards while offering targeted relief measures aimed at supporting the province’s agricultural economy.
According to the proposed amendments to the Agriculture Income Tax Rules, agricultural landholdings of up to 12.5 acres will remain exempt from agricultural tax. However, landowners possessing more than 12.5 acres and up to 25 acres will face a substantial increase in taxation, with the rate proposed at Rs 1,000 per acre compared to the existing Rs 300 per acre.
Similarly, landholdings exceeding 25 acres and up to 50 acres will also be taxed at Rs 1,000 per acre, replacing the current rate of Rs. 400 per acre. For holdings above 50 acres, the proposed tax has been increased from Rs 500 to Rs 1,000 per acre.
The government has also proposed higher taxation on orchards. Under the new framework, mature orchards would be taxed at Rs 1,000 per acre, up from the current Rs 600 per acre. Tax on unirrigated orchards is proposed to increase from Rs 300 to Rs 500 per acre.
In another major policy shift, the provincial government has proposed replacing the existing crop based water cess mechanism with a uniform flat rate system. Under the proposed structure, water charges will be levied at Rs. 1,650 per acre during the Kharif season and Rs 850 per acre during the Rabi season, regardless of crop type.
Officials say the reforms are intended to simplify tax administration, improve revenue collection and ensure a more uniform framework for agricultural taxation and irrigation charges across the province.
At the same time, the government has proposed relief measures for the agriculture sector by abolishing the cotton fee currently charged on the arrival of raw cotton at ginning factories. Authorities believe the move will help revive the cotton industry, which has faced severe challenges in recent years due to declining production levels.
According to government estimates, falling cotton output has led to the closure of numerous ginning units, particularly in South Punjab, affecting farmers, industrial activity and employment. The proposed abolition of the cotton fee is expected to reduce operational costs for the sector and encourage greater agricultural and industrial activity.
The proposed measures will be considered as part of the provincial budget process for FY2026-27 and, if approved, will significantly reshape Punjab’s agricultural taxation and irrigation revenue framework while providing targeted support to key segments of the farming economy.

Lahore | ReNews Pakistan
The Punjab government has proposed allocating Rs 752 billion for development projects in the annual budget for fiscal year 2026 27. The total size of the provincial budget has been set at Rs 5.9 trillion, with priority given to public welfare, infrastructure, health, education, transport and urban facilities.
According to budget documents, the Punjab government intends to move forward with ongoing and new projects through development spending during the next fiscal year. The development budget includes projects across various sectors aimed at improving urban facilities, strengthening public service delivery and promoting economic activity.
The government has also allocated significant funds for major projects in the health sector, including the Nawaz Sharif Medical District, cancer hospitals, children’s hospitals and emergency services-related initiatives. Similarly, funds have also been proposed for mass transit, the electric bus programme and regional railway projects in the transport sector.
Experts say the proposed Rs 752 billion allocation for development projects could have a positive impact on construction activity, urban development and employment opportunities across the province. Real estate circles believe that if development funds are used in a timely and transparent manner, improvement may be seen in land values, housing projects and commercial activity across major cities as well as various districts.
The Punjab government says the budget has been prepared with public welfare, development and economic stability in mind, while efforts will be made to ensure the provision of basic facilities and long-term growth in the province through development projects.

Lahore | ReNews Pakistan
Punjab has presented its annual budget for 2026 27. The budget places significant emphasis on reforming the property related tax system to make it more effective and enhance provincial revenue. According to official budget documents, the Government of Punjab has set a target to improve collections through long-discussed policy changes in the Urban Immovable Property Tax system, expansion of the tax base and digital reforms.
The budget strategy states that the tax net will be expanded through measures aimed at increasing digitization and efficiency in Punjab’s revenue system. The policy is intended to make the process of property records, valuation and tax collection more transparent and effective.
The Punjab government has already made a policy decision to shift the basis of property tax from rental value to capital value. Later, a self-assessment system was also introduced for Urban Immovable Property Tax. According to official documents, these measures are part of efforts to modernize the tax system in line with the actual value of properties.
Real estate experts say that if the property tax system is implemented through digital records and transparent valuation, it could increase provincial revenue on the one hand, while also improving property transactions and ownership records on the other. However, market circles believe that the government must avoid placing an additional burden on ordinary citizens and small property owners while implementing tax reforms.