The Government has taken a significant step to provide substantial relief to the lowest and medium income sectors, proposing a four percent decrease in income tax in various slabs.
Presenting the Federal Budget for Fiscal Year 2025-26, the Minister of Finance, Muhammad Aurengzeb, declared that the prime minister had constantly struggled to reduce taxes to salaried persons.
“Taking into account this objective, we have proposed a decrease in income tax in all slabs,” he said. “This measure will not only facilitate the existing fiscal structure, but will also achieve a crucial balance between inflationary pressures and payment to bring individuals to relieve fiscal burden.”
According to the new budget, people who earn between RS0.6 million (RS50,000 per month) and RS1.2 million per year (RS100,000 per month) are destined to receive a significant tax relief, since the government has reduced its tax rate of five percent to one percent. For those who earn up to RS100,000 per month, the federal budget also proposes a reduction in the amount of the total RS30,000 tax to RS6,000.
Similarly, people who earn up to RS2.2 million per year will see a four percent decrease in taxes on their salaries, which reduces the rate from 15 percent to 11 percent.
Some relief have also spread to the highest income group. People who win up to RS3.2 million will benefit from a two percent cut, reducing their tax rate from 25 % to 23 % for the next fiscal year.
Meanwhile, in a movement to mitigate the phenomenon of cerebral drainage, which sees the professional human resources that face the highest tax burden in the region, the Government has proposed a one percent decrease in the surcharge applied to people who earn more than RS10 million per year.
Previously, it was revealed that the salaried class paid an amazing income tax of RS331 billion in the eight months of the current prosecutor, which is 1,350% more than the taxes paid by retailers, but it is not yet enough for the government to seek the relief of the International Monetary Fund (IMF) for the marginalized segment.
Total income tax contributions by salaried persons during the July period -February of this fiscal year were RS120 billion, or 56% higher than the RS211 billion raised during the same period of the last fiscal year.
Last year, the salaried class paid RS368 billion in taxes. But despite this exhausting load for salaried persons, who pay taxes on their gross income without adjusting expenses, the government did not occupy the issue of decreasing this load with the IMF during recently held conversations.
