Salaried Class May Get Income Tax Relief in Upcoming Reforms
The government of Pakistan is looking to explore new avenues to reduce the tax burden on salaried individuals. The government is considering proposals which can reduce the rates of income tax and eliminate additional taxes, but this has to be approved by the IMF.
This is part of the larger attempt made by the government in 2026 to reduce the financial burden on taxpayers while still adhering to the IMF program.
New Relief Ideas Being Discussed
According to government sources, several tax relief measures are being considered for salaried employees. One of the main proposals is to remove the super tax that currently applies to high-income individuals and the corporate sector.
Another important suggestion is to reduce the highest income tax rate for salaried individuals. At present, the top tax slab is higher, but the government is reviewing a plan to bring the maximum rate down to around 30 percent.
In addition, officials are also studying the possibility of increasing the income limit at which the highest tax rate applies. This means taxpayers would only enter the top tax bracket at a higher income level than before.
Discussions Held at the Highest Level
These proposals were recently reviewed during a high-level meeting chaired by Prime Minister Shehbaz Sharif, where officials examined ways to provide relief to taxpayers while still maintaining government revenue targets.
According to reports, the prime minister has instructed tax authorities to further improve the plan. Experts from the private sector are also expected to provide input before the proposal is formally presented to the IMF.
IMF Approval Will Be Important
Because Pakistan is currently operating under an IMF-supported economic program, any major change in tax policy requires IMF consultation.
Initially, the government had explored broader tax reductions that could have provided relief worth between Rs1.5 trillion and Rs1.8 trillion. However, financial experts believe such a large reduction may be difficult under the current fiscal framework.
For this reason, more balanced alternatives are being considered, which may provide the much-needed relief without compromising revenue stability.
What This Could Mean for Salaried Individuals
In case these proposals come into effect, salaried individuals may reap benefits in the following ways:
- Lower tax rates for higher salary bands
• Removal or reduction of additional taxes such as super tax
• May have higher income levels before entering the higher tax bracket
This may make the tax system somewhat more bearable for professionals and salaried individuals in higher tax brackets.
Final Decision Yet to Be Made
At the moment, the proposals are yet to be reviewed, and no official word has been given. The government will likely engage further consultations with financial experts and the IMF before making any official announcement.
If approved, these changes could become part of upcoming fiscal reforms aimed at improving Pakistan’s tax system and providing relief to the salaried class in 2026.