Prime Minister (PM) of Pakistan, Mian Muhammad Shehbaz Sharif, has issued special instructions today that no mini-budget will be issued in the current fiscal year until the new budget is tabled by June 2026. The Prime Minister has issued instructions on the budget strategy that the salaried class and industries should get relief in the upcoming budget, and various proposals should be prepared for relief.
Steps regarding tax shortfall
As per the instructions of PM Shehbaz Sharif, efforts will be made to meet the tax shortfall by increasing tax revenue instead of imposing tax measures, and negotiations will be conducted ahead with the International Monetary Fund (IMF) for not imposing more taxes.
Following the instructions of the PM, steps are being taken to provide relief to the salaried class. He has also directed the preparation of proposals to reduce the tax rate for industries.
Manufacturing tax to be reduced
The super tax rate for the manufacturing sector is expected to be reduced in the new industrial policy in the upcoming budget. Under the reforms in the super tax structure, the super tax rate for the manufacturing sector will be reduced in the upcoming four years, and the super tax rate is likely to be reduced to five per cent in the next four years. The super tax will be abolished in the fifth year if the primary balance is in surplus.
The super tax threshold for the manufacturing sector is set to be increased from a minimum income of Rs200 million to Rs500 million. Under the proposed changes, the threshold for imposing a 10 per cent super tax from the upcoming budget would be raised from Rs500 million to Rs1.5 billion.
