Government considers 2.5pc reduction in income tax for salaried class
Business
Individuals with monthly income of Rs333,000 may see revised tax rate of 27.5pc, down from 30pc
ISLAMABAD (Mudassir Ali Rana) - The federal government is considering a 2.5 percent reduction in income tax rates for the salaried class and corporate sector in the upcoming budget, sources in the Federal Board of Revenue (FBR) told.
According to the proposals, all salary brackets are expected to see a reduction in tax. For instance, individuals earning Rs100,000 per month may see their tax rate drop from 5pc to 2.5pc. Salaries of Rs183,000 per month may be taxed at 12.5pc instead of the current 15pc.
Similarly, for those earning Rs267,000, the rate could be slashed to 22.5pc from 25pc, while individuals with a monthly income of Rs333,000 might see a revised tax rate of 27.5pc, down from 30pc. Incomes exceeding Rs333,000 per month could be taxed at 32.5pc, compared to the current 35pc.
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Sources further revealed that the government is also planning Rs200 billion in withholding tax relief on imported raw materials for the industrial sector. However, implementation of these relief measures will be dependent upon approval from the International Monetary Fund (IMF).
The federal budget for the fiscal year 2025-26 is likely to be tabled in the National Assembly on June 2 or 3.
