Islamabad, May 1, 2025 – The Federal Board of Revenue (FBR) is working on a plan to provide significant tax relief to the salaried class in the upcoming federal budget for 2025-26.
Finance Minister Muhammad Aurangzeb, speaking from Karachi via video link, confirmed that the government is seriously considering this move to ease the financial burden on salaried individuals.
The announcement was made during a meeting of the Standing Committee on Finance and Revenue at the Parliament House in Islamabad. The meeting was chaired by Syed Naveed Qamar, Member of the National Assembly (MNA). The finance minister emphasized that although the budget will be challenging due to tough economic conditions, relief for the salaried class is a priority.
FBR Chairman Rashid Mahmood also addressed the committee, clearly stating that the upcoming budget will not offer general sales tax reductions. However, tax relief measures will be focused specifically on the salaried segment of the population, which has been under increasing financial stress due to inflation and stagnant wages.
When the dairy industry proposed a reduction in sales tax from 18% to 5%, the FBR chairman explained that Pakistan is currently under an International Monetary Fund (IMF) program, which limits the government’s ability to make widespread tax cuts. “We’re facing serious revenue challenges, and our economic indicators like GDP growth and import volumes have shifted,” he said.
Despite these limitations, the FBR is determined to provide some relief to the salaried class through targeted tax adjustments. The newly created tax policy unit at the Ministry of Finance is still being developed, so this year’s budget is being reviewed directly at the FBR level.
The Finance Committee urged the FBR to consider easing the burden on essential items like milk, while also protecting tax relief plans for salaried employees. Members of the committee showed strong support for this direction, recognizing the pressure on working professionals.
The meeting also covered several legislative items, including the Income Tax (Amendment) Bill 2024 and the Corporate Social Responsibility Bill 2025. Concerns about the non-implementation of minimum wages were also raised, particularly for both the public and private sectors.
By offering tax relief to the salaried class, the FBR aims to support hardworking citizens during tough economic times and improve overall compliance with the tax system. The proposed changes in the 2025-26 budget could bring much-needed financial breathing room for many salaried households across Pakistan.