The government is considering a reduction in income tax rates for salaried individuals in the upcoming Budget 2026-27, with taxpayers earning between Rs200,000 and Rs300,000 per month likely to receive relief.
According to sources, the International Monetary Fund (IMF) has limited the scope of Pakistan’s proposed tax relief package and has strongly opposed broad-based tax concessions for businesses and several other sectors. As a result, the government is now focusing primarily on providing relief to the salaried class.
Sources said that the Federal Board of Revenue (FBR) has prepared several tax relief proposals and submitted them to the Prime Minister for review.
Under the proposed measures, income tax rates for salaried individuals earning between Rs200,000 and Rs300,000 per month could be reduced. The move is expected to directly benefit approximately 550,000 registered taxpayers across the country. The government is also considering changes to tax slabs and rates for higher-income earners.
In addition to relief for the salaried class, the Ministry of Finance and the FBR are reviewing several other tax-related measures, which will require approval from the IMF.
Sources further revealed that after receiving the Prime Minister’s approval, the Finance Ministry will present the proposals to the IMF before June 10 in an effort to secure formal approval.
The final decision on the proposed tax relief package will be made following the conclusion of ongoing negotiations between Pakistan and the IMF in the coming days.
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