KARACHI: The government is considering tax relief measures for specific salaried individuals in the upcoming federal budget for the fiscal year 2026-27. Under the proposed plan, income tax rates for certain income brackets are expected to be reduced, while low-to-middle-income earners may see no significant changes. According to official sources, the tax relief is likely to benefit individuals earning between PKR 230,000 and PKR 341,000 per month. Conversely, those falling in the monthly income bracket of PKR 100,000 to PKR 183,000 are unlikely to receive any major relief.
Proposed Tax Plan
The government is considering lowering the maximum tax rate for salaried individuals from 35% to approximately 30%, which will significantly reduce the tax burden on those earning between PKR 266,000 and PKR 341,000 monthly. Meanwhile, the existing tax slabs for individuals earning between PKR 100,000 and PKR 183,000 per month will remain unchanged, and the annual tax exemption limit will be maintained at PKR 600,000. To align with International Monetary Fund (IMF) targets, the government plans to introduce new revenue measures worth PKR 660 billion to PKR 700 billion in the upcoming budget.
Revenue Targets and Import Duties
The Federal Board of Revenue (FBR) aims to collect an ambitious PKR 15.3 trillion in the next fiscal year through new tax measures and stricter enforcement laws. Additionally, proposals to reduce import and regulatory duties are under review. However, the decision to lower tariffs on the automotive sector has been temporarily postponed. Officials admitted that achieving these aggressive revenue targets amid current economic conditions would be highly challenging, but emphasized that the steps are necessary to comply with international financial agreements.
