Govt considers income tax relief for salaried class

Islamabad: In an effort to alleviate financial strain, the federal government decided to consider income tax relief for the salaried class, the sources familiar with the sources said on Friday.

The objective of this decision is to provide relief to the salaried class.

Prime Minister Shehbaz Sharif directed the economic team to review the existing income tax rates for those earning up to Rs100,000 per month.

In the latest budget, the government had imposed a 2.5 percent income tax on monthly salaries up to Rs100,000.  The reports suggested that this tax rate may be reduced or eliminated to offer relief to salaried workers.

Implementing this tax relief could lead to an estimated revenue shortfall of around Rs40 billion. It is expected that this deficit would be addressed by reducing allocations to the Public Sector Development Program (PSDP).

Besides it, the discussions on this proposed tax relief are expected to include consultations with the International Monetary Fund (IMF).