Budget 2025-26: Will the low-income demographic experience alleviation from proposed tax relief measures?
Nearly a week following Federal Finance Minister Muhammad Aurangzeb’s announcement regarding forthcoming relief for the burdened salaried class in the impending budget, the government is formulating a comprehensive relief strategy for individuals whose wages are classified within the 5% tax bracket.
The relief is anticipated to be declared for individuals with yearly wages ranging from Rs600,000 to Rs1,200,000.
Sources from the Federal Board of Revenue (FBR) indicate that the exemption or reduction of taxes for lower-income individuals is contingent upon the approval of the International Monetary Fund (IMF).
The authorities will shortly confer with Prime Minister Shehbaz Sharif over the relief package. The proposal encompasses the modification of tax brackets for those earning over Rs50,000 monthly and the simplification of the income tax return draft.
The Salaried Class Alliance requests assistance from the Finance Ministry in a new correspondence.
The Salaried Alliance Pakistan has addressed a letter to the finance minister, advocating for a revision of tax brackets, an elevation of exemption thresholds, the reinstatement of significant deductions, and a targeted initiative to incorporate undocumented sectors into the tax framework, with the objective of establishing a more equitable and balanced taxation system.
The letter stated, “Salaried individuals are currently facing challenges due to stagnant wages in the context of historically high inflation, complicating their ability to sustain a reasonable standard of living.”
The government must enhance efforts to expand the tax base by including undocumented sectors, including real estate, wholesale commerce, and informal companies, into the regular taxation system. This would reduce the burden on complying taxpayers and promote sustainable revenue growth,” the Alliance emphasized.
