Government Plans Tax Relief for Salaried Individuals
Finance Minister Muhammad Aurangzeb has indicated that the upcoming budget will include measures to reduce the financial burden on the salaried class. His statement follows protests by government employees demanding higher salaries and the withdrawal of pension reforms.
Positive Economic Indicators Highlighted
Speaking to journalists in Lahore, Aurangzeb pointed to economic improvements, including an increase in remittance senders and rising foreign exchange reserves. He emphasized the critical role of the private sector in driving economic growth and reiterated the government’s commitment to supporting the construction industry while preventing speculative activities in real estate.
Current Taxation on Salaried Individuals
Salaried individuals in Pakistan pay income tax based on progressive slabs. Under the existing system:
- Income up to Pak Rs. 600,000 annually is exempt from tax.
- Earnings between Pak Rs. 600,001 and Pak Rs. 1,200,000 are taxed at 5% on the amount exceeding Pak Rs. 600,000.
- Higher income brackets face increasing rates, with those earning above Pak Rs. 4,100,000 annually taxed at 35%.
The government is working to expand the tax base to reduce reliance on indirect taxation, which disproportionately impacts lower-income groups.
Economic Reforms and Stability Measures
Aurangzeb highlighted that recent tax reforms have significantly increased revenue collection, reducing pressure on the national treasury. He also noted that inflation has dropped to single digits, providing much-needed relief to the public. Additionally, a lower policy rate has benefited businesses and contributed to economic stability.
Path Towards Sustainable Growth
Addressing concerns about reliance on external financial assistance, the finance minister stressed that Pakistan’s economic stability cannot depend solely on foreign aid. He emphasized the need for public-private sector collaboration to ensure long-term financial resilience.
With the upcoming budget, the government aims to balance tax collection with economic relief measures, creating a framework that supports both individuals and businesses.
