Govt to slash income tax rates by 2.5pc

Lahore: In a bid to provide relief to masses, the government has decided to review the income tax rate on salaried individuals.

According to sources, the 2.5 percent tax on monthly salaries up to one lakh rupees is likely to be partially or completely withdrawn. Prime Minister Shehbaz Sharif has assigned this task to the economic team.

The tax relief is expected to reduce the burden on salaried individuals by 4 trillion rupees. Funding for this relief will be sourced from the development budget.

Additionally, various proposals are under consideration to provide relief in electricity bills for consumers using between 300 and 400 units of electricity. However, a final decision on this matter will be made after obtaining approval from the International Monetary Fund (IMF).

It is worth noting that for the current fiscal year, the government has set the income tax rate at 5% for those earning between 600,000 and 1,200,000 rupees annually. The income tax on monthly incomes up to one lakh rupees has been set at 5%. The monthly income tax has been increased from 1,250 to 2,500 rupees.