Expected Tax Relief for Salaried Employees

In a positive step for Pakistan’s working people, the federal government is likely to provide major relief to the salaried class in the upcoming budget for the fiscal year 2025-26. This comes at a time when many families are finding it hard to manage due to rising inflation and economic difficulties.

According to government sources, the final round of talks between Pakistan and the International Monet Fund (IMF) is happening now, and income tax reforms are one of the main topics being discussed.

Prime Minister Shehbaz Sharif had earlier asked for relief measures to be made for salaried individuals. He was recently informed that the government collected more taxes than expected from this group during the current fiscal year. Because of this, the Prime Minister has shown strong interest in reducing the financial burden on people who earn a fixed monthly income.

What Could Change for Salaried Workers?

As per the budget proposals being discussed:

-Annual income up to Rs1 million (approx. Rs83,000 per month) could be made tax-free, up from the current threshold of Rs600,000 annually — a move that would benefit a large portion of middle-income earners.

-For those earning Rs100,000 per month, the income tax rate is proposed to be reduced to 2.5% from the current 5%.

-Individuals earning Rs183,000 per month may see their income tax rate capped at 12.5%, making a noticeable difference in monthly take-home salaries.

-Meanwhile, those earning Rs267,000 per month could benefit from a tax cut to 22.5%, down from 25% currently.

Relief for Corporate Sector Also on the Table

In addition to salaried workers, the corporate sector might also see tax relief in the form of lower income tax rates, while a 0.5% cut in super tax is also under serious consideration.

A Sign of Hope for the Middle Class

If these measures are approved, they could bring much-needed relief to the salaried middle class, many of whom are struggling with low wages and rising living expenses. For professionals, teachers, government workers, and private employees, this relief would not only ease their financial stress but also acknowledge their steady role in contributing to the country’s tax system.

Although the final decision depends on the outcome of talks with the IMF, the proposed tax changes are being viewed as a move toward a fairer and more balanced tax system—one that doesn’t put too much pressure on people with fixed incomes.

The federal budget for the fiscal year 2025-26 is expected to be announced in June, and many are now waiting to see if this hopeful relief will actually be given to Pakistan’s hardworking salaried workers.