The International Monetary Fund (IMF) and Pakistan are nearing an agreement to reduce income tax rates for the salaried class in the 2025-26 budget.<\/p>\n
During intense talks between the IMF and the Federal Board of Revenue (FBR)<\/a> on Friday night, the Fund granted broad approval to lower tax rates across several income slabs for salaried individuals. This reduction is estimated to provide relief worth Rs. 56-60 billion in the next fiscal year, reported TheNews.<\/p>\n The FBR proposed reducing the tax rate<\/a> on the first income slab (annual earnings of Rs. 0.6 million to Rs. 1.2 million) from 5 percent to 1 percent. Under this, tax on income up to Rs. 100,000 would fall from Rs. 30,000 to Rs. 6,000. However, the IMF favors a compromised rate of 1.5 percent, which would mean Rs. 9,000 tax payable.<\/p>\n For higher income slabs, a proposed 2.5 percent reduction per slab and a cut in the top tax rate<\/a> from 35 percent to 32.5 percent are under consideration. Final calculations are still pending between the IMF and FBR.<\/p>\n The IMF also pushed for gradual rationalisation of the 10 percent surcharge and Super Tax.<\/p>\n