Finance Minister Muhammad Aurangzeb recently spoke in Pakistan’s National Assembly. He announced a tax break for salaried workers and shared new measures to make up for the money the government may lose.
Key Relief for Salaried Workers
People earning between Rs 600,000 and Rs 1.2 million annually now pay just 1% tax, down from 5%.
Those earning between Rs 1.2 million and Rs 2.2 million now pay 11% instead of 15%.
Higher income earners will also see smaller cuts in their tax rates.
New Measures to Offset Revenue Loss
The tax on dividend income from mutual funds will increase from 25% to 29%.
Corporations will now pay 20% tax on profits from government securities.
A new federal excise duty of Rs 10 is being added to the price of one-day-old chicks.
Other Important Points
Pensions over Rs 10 million will be taxed, but those over 75 years old remain fully exempt.
No new tax will be added to voluntary pension plans or pension commutation and gratuity.
The Federal Board of Revenue will now need a warrant and committee approval for arrest in tax fraud cases under Rs 500 million.
The aim is to give relief to salaried citizens while keeping the country on track with its budget goals and IMF commitments.