ISLAMABAD: The government is considering major income tax relief for salaried individuals, including the abolition of the super tax and a reduction in the top income tax rate, subject to approval from the International Monetary Fund (IMF).
According to sources, Shehbaz Sharif, Prime Minister of Pakistan, has approved a proposal to seek IMF consent for abolishing the super tax currently imposed on wealthy individuals and the corporate sector.
The proposal will be presented to the IMF next week as part of the government’s efforts to reduce the tax burden on taxpayers.
The decision was discussed during a high-level meeting chaired by the prime minister to review potential tax relief measures. Officials said the plan also includes reducing the maximum income tax rate for the highest salaried income group by five percent, bringing it down to 30 percent.
In addition, the government is considering increasing the income threshold at which the top tax rate would apply, a move aimed at providing further relief to high-income salaried individuals.
Sources said the prime minister has directed tax authorities to further refine the proposals in consultation with private sector experts before formally presenting them to the IMF.
Officials indicated that the government had initially planned tax reductions ranging between Rs1.5 trillion and Rs1.8 trillion. However, analysts believe it may be difficult to secure such a large fiscal adjustment under the current IMF program.
If approved, the proposed measures could provide significant relief to the salaried class while reshaping the country’s income tax structure.
