ISLAMABAD: The Government of Pakistan is planning tax relief measures for the salaried class and real estate sector in the upcoming federal budget for FY2025-26. However, any final decision will depend on approval from the International Monetary Fund (IMF), according to official sources.
As the Finance Ministry prepares the budget, high-level talks are underway. These discussions aim to ease the burden on salaried individuals and revive the real estate market.
Relief for Salaried Class Under Review
Sources within the Federal Board of Revenue (FBR) reveal that three proposals are being drafted to provide relief to salaried taxpayers. A major suggestion involves raising the income tax exemption threshold, currently set at Rs600,000 per year.
The revised threshold may surpass the current limit, with one option suggesting the inclusion of individuals earning more than Rs50,000 per month in the lowest tax slab. This move is expected to benefit millions of low to mid-income earners.
However, all proposals are linked to IMF’s approval. Without its consent, the government may not be able to implement these changes due to ongoing loan obligations.
No Tax Breaks for High Earners
FBR insiders clarified that the proposed adjustments will only target lower income brackets. High-income earners are unlikely to see any tax relief in the upcoming budget.
The proposals will be submitted to Prime Minister Shehbaz Sharif for review before being finalized and incorporated into the budget document.
Real Estate Sector May See Duty Removal
In another major move, the government is considering eliminating the 3% Federal Excise Duty (FED) on property sales. This step, if approved, would provide a much-needed boost to the real estate sector.
Real estate stakeholders have long demanded the removal of this duty, which they claim has slowed down property transactions and investments.
Simplified Tax Filing Also on the Cards
Alongside income tax reforms, the FBR is also working to simplify the tax return filing process. Officials believe that a more user-friendly system will encourage compliance and increase the number of active taxpayers.
Revised income tax slabs and easier filing methods are part of the broader budget framework being prepared by FBR.
Awaiting Final Approval
While these reforms appear promising, the final call will depend on negotiations with the IMF. The global lender has strict conditions linked to Pakistan’s ongoing loan program, and any move seen as reducing tax revenue must be justified.
For now, salaried individuals and real estate investors await clarity as the federal budget approaches.
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