Islamabad (TDI): The government has shared some headlines of the proposed taxation measures with the International Monitory Fund (IMF) for the upcoming budget 2025-26, including a reduction in the tax burden of salaried class up to 10 percent in different income slabs.
If approved by the global lending agency, the proposed tax rate cuts across various income slabs for the salaried class could provide up to Rs50 billion in relief in the upcoming budget.
The IMF team and the Pakistani side will begin discussions on finalizing the upcoming budget for 2025-26 this week from May 14 to 22. However, the venue of the meeting is yet to be finalized, The News reported.
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The Pakistani team aims to hold talks solely to address the revenue gap resulting from proposed relief measures. For example, to offset the Rs50 billion tax cut suggested for the salaried class, the FBR plans to introduce alternative taxation measures.
In the first 10 months from July to April, the salaried class paid out over Rs450 billion in taxes, which is much higher than retailers and exporters. In fiscal year 2023-24, the salaried class paid Rs368 in taxes.
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Although the previous budget projected an additional Rs100 billion from this segment, the FBR has actually targeted an extra Rs225 to Rs250 billion for the current year.
As a result, total contributions from the salaried class are expected to reach Rs550 billion by June 2025.
Farkhund Yousafzai is an Associate Editor at The Diplomatic Insight.
