Amid growing economic pressure, Pakistan’s federal government is considering major tax relief measures for the salaried class as part of ongoing negotiations with the International Monetary Fund (IMF). A key proposal under discussion is a uniform 2.5% reduction in income tax across all salaried income brackets.
In a bid to ease the financial burden on working individuals and stimulate economic activity, the government is also contemplating additional fiscal reforms. These include a 0.5% cut in the super tax and adjustments to corporate tax rates.
One of the most notable reforms under review is a substantial increase in the annual income tax exemption threshold—from Rs600,000 to Rs1 million. If approved, individuals earning up to Rs83,000 per month would be exempt from paying income tax, offering meaningful relief to low- and middle-income earners.
Under the proposed revised income tax brackets, tax rate for Rs100,000 monthly earner could drop from 5% to 2.5%, proposed tax rate of up to 12.5% for people with monthly income of Rs183,000 while monthly earner of Rs267,000 could see reduction in tax rate from 25% to 22.5%.
On the other hand, the government is planning to impose heavy taxes YouTubers, TikTokers, freelancers, and other digital content creators, as part of an effort to raise up to Rs600 billion in additional revenue.
One of the key proposals involves a 3.5% tax on income generated from digital platforms such as YouTube and TikTok. This alone is expected to contribute approximately Rs52.5 billion to the national exchequer.
