Govt reverses tax relief for low-income salaried class

The government has withdrawn the previously announced tax relief for low-income salaried individuals that was included in the 2025–26 budget.

The National Assembly’s Standing Committee on Finance and Revenue, chaired by MNA Naveed Qamar, approved an increase in the minimum threshold for daily cash withdrawals—from Rs50,000 to Rs75,000—but rejected a separate proposal to impose an additional 2 percent sales tax on online purchases.

Federal Board of Revenue Chairman Rashid Mahmood Langrial informed the committee that the federal cabinet had reversed the planned tax concessions for lower-income earners.

Bilal Azhar Kayani, the newly appointed Minister of State for Finance, defended the decision, stating that revised projections had prompted the withdrawal. He pointed out that public sector salaries had been increased by 10 percent, exceeding the initial estimate of 6 percent.

However, committee members noted that the salary hike applies exclusively to government employees, while the tax increase would disproportionately affect private sector workers who do not benefit from the same adjustment.

Chairman Naveed Qamar expressed concern over the cabinet’s approach, questioning the justification for placing a higher tax burden on low-income salaried individuals.