Major Relief Proposed for Salaried Class as Tax Cut from 35% to 20% Suggested
Islamabad (Special Correspondent) – A major tax relief has been proposed for the salaried class in the upcoming budget, with a recommendation to reduce the maximum tax rate from 35 percent to 20 percent.
According to details, the think tank “Economic Policy and Business Development (EPBD)” has presented its shadow budget for the next fiscal year, proposing significant tax reductions for the salaried class, corporate sector, and real estate industry, along with wide-ranging reforms in the Federal Board of Revenue (FBR).
The EPBD claims that if the proposed reforms are fully implemented, Pakistan’s economic growth rate could reach 8.5 percent by 2031, with GDP rising to $688 billion.
Under the shadow budget, it has been recommended that the maximum tax rate for salaried individuals be reduced from 35 percent to 20 percent, while income up to Rs80,000 per month should be exempt from tax.
The proposal also suggests reducing tax rates for non-salaried individuals from 45 percent to 25 percent.
For the corporate sector, the think tank has recommended cutting the corporate tax rate from 29 percent to 25 percent, aimed at reducing the cost of doing business. It further proposes gradually lowering General Sales Tax (GST) from 18 percent to 15 percent over the next three years.
In the real estate sector, the shadow budget suggests reducing taxes from 5.5 percent to 0.5 percent and calls for the complete abolition of the controversial “7E” law.
The EPBD also recommends that industrial investors bringing 100 percent investment into the country should not be questioned about the source of income. It further proposes special incentives for overseas Pakistanis to encourage remittances and investment.
To expand the tax base, the think tank has suggested bringing retailers, traders, and shopkeepers into the tax net.
For improving FBR performance, it recommends separating the Inland Revenue and Customs departments and appointing a qualified FBR chairman for a fixed three-year term. It also calls for urgent measures to resolve pending tax litigation cases worth Rs57 trillion in courts within a defined timeframe.
