The government has shared initial proposals for the 2025–26 federal budget with the International Monetary Fund (IMF), which include a potential reduction of up to 10% in income tax rates across various slabs for the salaried class. If approved by the IMF, this measure could provide relief amounting to approximately Rs50 billion.
Formal negotiations between the IMF and Pakistani authorities on the upcoming budget are scheduled to take place from May 14 to 22, although the final venue for the discussions is yet to be confirmed.
The Federal Board of Revenue (FBR) has outlined the Rs50 billion in tax relief for salaried individuals, and the government is expected to introduce alternative revenue measures to offset this shortfall.
During the first ten months of the current fiscal year (July to April), the salaried class contributed over Rs450 billion in income taxes—significantly more than the amounts paid by retailers and exporters. This figure marks a notable increase from the Rs368 billion collected from the same segment during the entire 2023–24 fiscal year.
In the previous budget cycle, the government had estimated an additional Rs100 billion in revenue from increased taxation on salaried individuals, a move that drew considerable criticism.
