ISLAMABAD: The government is planning to enhance income tax in the upcoming budget to financially support the fight against terror, especially operation Zarb-e-Azb.
According to official sources at the finance ministry, the proposal was discussed during a meeting of senior finance officials, under the chairmanship of Finance Minister Ishaq Dar. They said that the tax would likely be imposed on individuals who fall in higher income tax brackets. The officials said that the minister has given his consent and that the proposal would now be sent to Prime Minister Nawaz Sharif for approval.
As per proposal, the surcharge would likely be between 5% and 10% of the tax owed by individuals in higher tax brackets. Once approved by the prime minister, the levy would be announced for higher income groups, though precisely which income tax brackets would be subject to the surcharge is still being determined by Pakistan Revenue Automation Ltd (PRAL), the information technology subsidiary of the Federal Board of Revenue (FBR).
For fiscal year 2016, the government has estimated a regular defence budget of Rs772 billion. In addition to the regular budget, the military has demanded roughly Rs45 billion for spending on Operation Zarb-e-Azb and raising nine battalions of the Pakistan Army for the protection of China-Pakistan Economic Corridor projects, bringing total military spending to Rs817 billion.
