IMF Permits Pakistan Tax Relief for Salaried Class

The International Monetary Fund (IMF) has agreed to let Pakistan lower tax rates for the salaried class in its upcoming federal budget. This move, aimed at easing public financial pressure ahead of economic reforms, comes as part of ongoing negotiations for a new bailout package.

While the IMF typically emphasizes revenue generation, it has allowed some flexibility to support middle-income earners amidst inflation and fiscal challenges. The adjustment reflects a balancing act between fiscal responsibility and public relief.

The IMF has tentatively approved Pakistan’s proposal to reduce tax rates for salaried individuals, potentially offering Rs. 56–60 billion in relief. The FBR seeks to cut the lowest income slab tax from 5% to 1%, though the IMF suggests 1.5%. Reductions for higher brackets and a lower top rate are also under discussion. The IMF also called for a gradual adjustment of the Super Tax and criticized unauthorized electricity allocation for cryptocurrency mining.