Islamabad:
The federal government is likely to improve the annual taxable income threshold of RS600,000 in the coming budget, provided that it guarantees the approval of the International Monetary Fund (IMF).
In addition, the government is also thinking about the taxation of taxes on retirees that draw substantial amounts.
According to the Federal Board of Return (FBR), the reduction proposed for the 2025-2026 financial year is limited to low-income tiles, without study recommendations for individuals who earn high wages.
According to sources, three proposals are currently being examined to extend help in the salaried class during the next fiscal year.
One of these proposals suggests increasing the annual taxable income threshold of 600,000 rupees to Rs800,000. However, a final decision will only be taken after an additional consultation.
The government also plans to simplify the income declaration form and revise the sales tax rate.
In addition, a rescue measure for employees earning between 600,000 rupees and 1.2 million rupees per year is also under examination.
Sources have added that retirees receiving substantial pensions are also under study, with a proposal to collect a 5% tax on annual pensions of 800,000 rupees; 10% on RS800,000 to Rs1.5 million; 12% on RS1.5 million at 2 million rupees; 15% on RS2 million to Rs3 million; and 20% on pensions above RS3 million.
These, however, remain preliminary recommendations, and the final decisions will be made following a detailed assessment and consultation process.
