The federal government is getting ready for the things to present in the budget 2025-26 before the expected International Monetary Fund (IMF) visit during this month. Before that IMF visit, the Federal Board of Revenue (FBR) finalized a proposal to bring high-paid pensioners into the tax net. Several suggestions and options are under consideration and will be finalized this week, hopefully.
According to the sources, for the salaried class in Pakistan, the FBR is thinking of increasing the annual taxable income limit from PKR 600,000 to PKR 1,000,000 or PKR 1,200,000. The IMF will visit Pakistan on 16th May to discuss tax and non-tax revenue targets and expenditures for the upcoming budget 2025-26 so that the fiscal deficit and primary surplus can be kept within the agreed limits.
According to an official source of the FBR, a few suggestions are under review and will be placed before the IMF visit. For example, pensioners are getting Rs 200,000 and Rs 400,000 per month after retirement, and the proposal is to bring those who receive a pension of more than Rs 100,000 per month into the tax net, but this proposal may not go through all the stages.
However, the IMF may urge Pakistani authorities to impose a tax of 2% to 5% on those pensioners who receive monthly pensions of Rs 100,000 or more to bring equity to the tax system. Sources say that the FBR collects the highest tax from the middle-income group. Consequently, the proposal is to decrease the rate by 5% to 10%. For the high-income class, whose salary is Rs 10 million per month, a 10% surcharge is applicable, which is under review to be canceled.
Similarly, the “Super Tax” can also be rationalized in the upcoming Budget 2025-26. Meanwhile, a meeting of the Senate Standing Committee on Finance and Revenue was held under the chairmanship of Chairman Senator Saleem Mandviwala, in which representatives of different trade organizations were also invited to attend the meeting and suggestions for the upcoming budget 2025-26.
