ISLAMABAD – In a landmark fiscal development, lawmakers have officially approved a new income tax structure specifically targeting salaried persons, aimed at creating a more progressive and equitable taxation framework.
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Salaried class blasts Budget 2025-26: ‘Relief is a cruel joke’
KARACHI, June 19, 2025 – A firestorm of criticism erupted from Pakistan’s salaried class on Thursday after the federal government unveiled what many are calling a “mockery of relief” in the Budget 2025-26.
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Salaried Class Demands Tax Burden Ease in Budget 2025-26
Karachi, April 10, 2025 – Pakistan’s salaried class has made an urgent appeal to the federal government to ease the growing tax burden in the upcoming Budget 2025–26, highlighting the financial pressures faced by wage earners amid high inflation and stagnant salaries.
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Government Aims to Protect Salaried Persons in Budget: Minister
The Minister of State for Finance, Revenue, and Power Division, Ali Pervaiz Malik, announced on Sunday that the upcoming budget is designed to protect the salaried class, particularly those in the lower income bracket.
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Pakistan’s Salaried Class Witnesses Surge in Bank Deposits, Totaling Rs3.45 Trillion
Karachi, July 17, 2023 – Pakistan’s salaried class has shown remarkable financial prudence, depositing a staggering Rs3.45 trillion in banks by the end of June 2023. This surge in deposits is primarily attributed to the country’s highest rate of return on investments.
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ICAP proposes tax refunds for salaried individuals directly to bank accounts
The Institute of Chartered Accountants of Pakistan (ICAP) has put forward recommendations to streamline the tax refund process for salaried individuals to their bank accounts and strengthen whistle blower protection.
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OICCI proposes increase in salaried tax exempt income threshold
The Overseas Investors Chamber of Commerce and Industry (OICCI) has submitted its proposals for the upcoming budget 2023-2024 to the Federal Board of Revenue (FBR).
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FBR collects Rs196 billion as income tax from salaried class
ISLAMABAD: Federal Board of Revenue (FBR) has collected a huge amount of Rs196.25 billion as income tax from salaried class during tax year 2022.
A report issued by the FBR revealed that the collection of tax on salaried income recorded significant growth of 29 per cent, which compared with the collection of Rs151.84 billion in the preceding tax year.
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Salaried tax is major revenue spinner in the collection of withholding tax. The collection of income tax on salaried income has been ranked third in the table of top revenue spinner under the withholding taxes.
The collection of withholding taxes from contracts and imports are on the first two slots. The FBR collected Rs341.42 billion with growth of 25.5 per cent from contracts and Rs281.61 billion with a growth of 29 per cent from imports during tax year 2022.
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The recent revision in tax slabs in for the salaried class has been aimed to boost the revenue collection during the current fiscal year 2022/2023.
The FBR said that target for 2022-2023 is challenging given the fact that government is focusing on controlling the current account deficit and rising inflation which would result in import contraction and slowdown in the overall GDP growth.
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Nonetheless, FBR is confident that its team has the ability and the resolve to accomplish this gigantic task as an upward revised target has already been achieved for the financial year ended on June 30, 2022.
To achieve the target several efforts are being made at policy as well as operational levels.
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“There is focus on enhanced use of technology and a policy shift towards taxing the high-income groups through direct taxation such as the imposition of Super Tax, Poverty Alleviation Tax, revision of individual tax slabs including salaried class, increase in FED on international air travel, increased tax on luxury motor vehicles etc.,” the FBR added.
FOLLOWING IS THE TAX CARD FOR SALARIED PERSONS FOR TAX YEAR 2022-2023
Taxable Income Rate of Tax Up to Rs600,000 0% Rs600,001 –1,200,000 2.5% of amount exceeding Rs600,000 Rs1,200,001 –2,400,000 Rs15,000 + 12.5% of amount exceeding Rs1,200,000 Rs2,400,001 –3,600,000 Rs165,000 + 20% of amount exceeding Rs2,400,000 Rs3,600,001 –6,000,000 Rs405,000 + 25% of amount exceeding Rs3,600,000 Rs6,000,001 –12,000,000 Rs1,005,000 + 32.5% of amount exceeding Rs6,000,000 Amount exceeding Rs12,000,000 Rs2,955,000 + 35% of amount exceeding Rs12,000,000 The rate of tax in the table above are applicable where the income of an individual chargeable under the head ‘salary’ exceeds seventy-five per cent of his/her taxable income.
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Finance Act 2022 revises tax rates for salaried persons
KARACHI: The federal government has withdrawn the proposal to give concessions to salaried persons and retained the minimum threshold for salary income at Rs600,000.
Through the Finance Act, 2022 the new tax rates on salary income have been implemented from July 01, 2022.
The new tax rates are as follow:
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01. Where the taxable income does not exceed Rs 600,000: the tax rate shall be zero.
02. Where the taxable income exceeds Rs 600,000 but does not exceed Rs 1,200,000: the tax rate shall be 2.5 per cent of the amount exceeding Rs 600,000.
03. Where the taxable income exceeds Rs 1,200,000 but does not exceed Rs2,400,000: the tax amount shall be Rs 15,000 + 12.5 per cent of the amount exceeding Rs 1,200,000.
04. Where the taxable income exceeds Rs2,400,000 but does not exceed Rs 3,600,000: the tax amount shall be Rs 165,000 + 20 per cent of the amount exceeding Rs 2,400,000.
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05. Where the taxable income exceeds Rs 3,600,000 but does not exceed Rs 6,000,000: the tax amount shall be Rs 405,000 + 25 per cent of the amount exceeding Rs 3,600,000.
06. Where the taxable income exceeds Rs 6,000,000 but does not exceed Rs 12,000,000: the tax amount shall be Rs 1,005,000 + 32.5 per cent of the amount exceeding Rs 6,000,000.
07. Where the taxable income exceeds Rs 12,000,000: the tax amount shall be Rs 2,955,000 + 35 per cent of the amount exceeding Rs 12,000,000.
Earlier, through Finance Bill, 2022 following rates of tax proposed for salaried person:
READ MORE: Simplified tax regime for shopkeepers implemented
01. Where taxable income does not exceed Rs. 600,000: the tax rate was zero.
02. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000: the tax rate was Rs100
03. Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 2,400,000: the tax rate was 7 per cent of the amount exceeding Rs. 1,200,000.
04. Where taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 3,600,000: the tax amount was Rs. 84,000 + 12.5 per cent of the amount exceeding Rs. 2,400,000.
05. Where taxable income exceeds Rs. 3,600,000 but does not exceed Rs. 6,000,000: the tax amount was Rs. 234,000 + 17.5 per cent of the amount exceeding Rs. 3,600,000.
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06. Where taxable income exceeds Rs. 6,000,000 but does not exceed Rs. 12,000,000: the tax amount was Rs. 654,000 + 22.5 per cent of the amount exceeding Rs. 6,000,000.
07. Where taxable income exceeds Rs. 12,000,000: the tax amount was Rs. 2,004,000 + 32.5 per cent of the amount exceeding Rs. 12,000,000.
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Salaried individuals require keeping tax certificate for six years
The Federal Board of Revenue (FBR) has issued a reminder to salaried individuals, emphasizing the necessity of retaining tax and salary certificates for a minimum of six years for assessment and audit purposes.
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