Shafaqna Pakistan: The government is preparing a significant tax relief package for the salaried class in the upcoming federal budget, with proposals aimed at revising income tax slabs and reducing tax rates for various income groups.
According to sources, work on the package has been completed and includes proposals to lower income tax rates for individuals earning between Rs100,000 and Rs300,000 per month.
Sources further revealed that the government is considering abolishing the 10 percent surcharge currently imposed on annual salaries of Rs10 million or more. In addition, the number of income tax slabs may be increased from six to eight to provide greater flexibility in the taxation structure.
Officials have briefed Prime Minister Shehbaz Sharif on the proposed measures. However, final approval from the International Monetary Fund is still awaited.
According to sources, three separate relief options involving tax reductions of 3 percent, 5 percent, and 10 percent have been shared with the IMF for consideration. A final decision between the Federal Board of Revenue (FBR) and the IMF regarding the proposed relief package is expected within the next day.
According to informed sources, tax relief proposals have been shared for salary brackets of Rs1.2 million, Rs2.2 million and Rs3.2 million annually, suggesting possible reductions in income tax rates under different slabs.
The highest slab, currently covering individuals earning up to Rs4.1 million annually, may be extended to Rs7 million, along with the introduction of a new slab for those earning Rs10 million or more annually.
The existing 35 percent tax rate for high-income earners may also be revised downward, according to the proposals under review.
Sources added that around 550,000 individuals earning between Rs200,000 and Rs300,000 per month are expected to benefit from the proposed relief measures.
In addition, the government has decided to abolish the 1 percent advance income tax on exporters in the 2026–27 budget, which could provide relief of up to Rs60 billion to the export sector.
Source: Dunya News
