According to the OICCI, the GDP includes some sectors which are exempt from Income Tax. The biggest exempted sector is agriculture which does not make any contribution to the national exchequer, despite the fact that over 65% of Pakistan's population is directly or indirectly linked with the agricultural sector. The original rationale of keeping agriculture out of tax net was to facilitate the small agriculturists. However due to non-implementation of land reforms the benefit of the tax exemption is being availed by big landowners earning huge incomes. Unscrupulous elements also transfer their income and wealth to businesses fronting as agriculture sector.
OICCI recommended that the exemption given to agriculture income should be withdrawn and agriculturists should file income tax returns and wealth statements. Suitable provisions should be incorporated in the Income Tax Ordinance to enable tax authorities to implement the requirement of filing of income tax returns and wealth statements, effectively. All incomes should be taxed and as a general rule exemptions be given only for attracting FDI and for under privileged and poor sections of society or, in exceptional circumstances, as motivation to encourage the registration of individuals and all legal entities, it said. The rationale of the proposal is that it will ensure a level playing field for all income earners. It will eliminate the incidence of income earners from other sectors parking their wealth and income in agriculture sector to avoid taxes. Documentation of all financial transactions will substantially reduce the size of the black economy and consequentially expand the documented economy leading to improved decision making for economic planning, OICCI added.