ISLAMABAD: The federal government is considering significant income tax relief for salaried individuals earning between Rs100,000 and Rs300,000 per month in the upcoming Budget 2026–27.
According to sources, Prime Minister Shehbaz Sharif has directed authorities to prepare proposals aimed at providing substantial relief to the salaried and middle-income classes.
Preliminary proposals suggest a notable reduction in income tax rates for individuals earning Rs100,000, Rs200,000, and Rs300,000 monthly. The prime minister has already been briefed on these initial recommendations.
Sources further stated that around 550,000 people earning between Rs200,000 and Rs300,000 per month are expected to directly benefit from the proposed relief measures in Budget 2026-27.
The government has reportedly shared three different tax relief options—3 percent, 5 percent, and 10 percent, with the International Monetary Fund (IMF) for consultation. Final approval of these measures will depend on IMF consent.
Officials say the move is aimed at easing financial pressure on the salaried class affected by rising inflation.
Budget 2026-27: Minimum salary proposed
Earlier, the Pakistan Institute of Development Economics (PIED) recommended setting the minimum monthly wage at Rs 45,000 for the next fiscal year.
According to the details, PIED has prepared an evidence-based framework report for determining the minimum wage, which suggests that the current minimum wage be increased from Rs 40,000 to Rs 45,000.
This proposed increase will result in an increase in salaries of about 12.5 percent.
