Govt revises tax slabs for salaried class, high-income earners

ISLAMABAD: The government has revised tax deduction criteria for the salaried class and withdrawn relief given in the federal budget.

The government had decided to waive off taxes on earnings of Rs1.2 million which has now been withdrawn on the demands of the International Monetary Fund (IMF).

The tax collection target of the Federal Board of Revenue (FBR) for the fiscal year 2022-23 has been increased to Rs7,470 billion — an addition of Rs466 billion.

The government took some drastic measures by increasing the tax rate on high-income earners by raising tax rates for the salaried class.

The government imposed a 10% super tax on 13 sectors to collect revenue of Rs80 billion for the next fiscal year.

READ MORE: PDM govt imposes 10pc ‘Super tax’ on industries, up to 4pc on high-income individuals

Personal Income Tax

On Personal Income Tax (PIT), the government raised a tax amount of Rs80 billion as first the government abolished tax relief of Rs47 billion and then raised additional tax amount of Rs35 billion.

For the salaried class, the government proposed a tax rate of 2.5% for income brackets of Rs50,000 to Rs100,000.

For those earning Rs100,000 to Rs300,000 on monthly basis, the proposed tax rate has been increased to 12.5%.

Where the taxable income exceeds Rs3,600,000 but does not exceed Rs6,000,000, the FBR proposed to increase the tax rate from 17.5% to 20%.

Where the taxable income exceeds Rs6,000,000 but does not exceed Rs12,000,000, the FBR tax rate is proposed to be increased from 22.5% to 25%.

Where the taxable income exceeds Rs12,000,000, the FBR will charge a tax amount of Rs2,004,000 plus 32.5% of the amount exceeding Rs12,000,000 on a per annum basis. For the above income, the FBR proposed a tax rate of 35%.

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