The Government of Pakistan has proposed a 27.5 percent income tax on individuals earning a monthly salary of Rs. 333,000 or more in the Federal Budget 2025–26. This move is part of efforts to boost revenue collection and fulfill commitments made to IMF.
According to officials, the new tax rate targets high-income earners in the salaried class. The aim is to make the tax system more balanced by collecting more from those who have a greater ability to pay, while trying to protect lower and middle-income groups from additional financial pressure.
Previously, an annual income of up to Rs1.2 million was exempt from tax. However, under the new proposals, this threshold might be reduced, although official confirmation is still awaited.
The announcement has raised concerns among professionals who feel that the salaried class is already under pressure due to inflation and rising living costs. Many are urging the government to introduce relief measures alongside the new tax to avoid overburdening honest taxpayers.
The proposal is part of the Finance Bill 2025–26 and will come into effect after approval from Parliament. More details are expected to be released in the coming days.
