ISLAMABAD: The federal government is considering a comprehensive relief package worth PKR 975 billion for both the corporate sector and salaried individuals, according to sources.
Key highlights of the proposed plan include:
Income Tax Relief for Salaried Class: Initial proposals suggest reducing the tax burden by up to 25%.
Corporate Sector Tax Cuts: Discussions underway to reduce corporate income tax by up to 25%, along with the removal of super tax and corporate dividend tax, potentially providing PKR 190 billion in immediate relief.
Elimination of Certain Taxes: Proposals include scrapping income tax surcharge, capital value tax on foreign assets, and minimum income tax over the next two years. Relief from capital value tax could save around PKR 5 billion, while reductions in withholding tax could provide PKR 175 billion in relief.
Sector-Specific Measures: Consideration is being given to removing the 1% advance income tax on exporters and advance tax on foreign card transactions. Proposals also include scrapping Sindh and Punjab infrastructure cess.
Immediate Cost: The estimated cost of these relief measures could exceed PKR 600 billion.
Prime Minister Shehbaz Sharif has directed the Ministry of Finance to engage with the IMF to seek approval for these measures. All proposals are contingent upon IMF consent. A committee led by the finance minister has been formed to develop a roadmap and strategy for tax reforms, which will be presented to the Prime Minister.
The Prime Minister emphasized that the economy cannot grow without eliminating unnecessary taxes and has also instructed the removal of worker welfare and participation taxes to provide immediate relief to the corporate and salaried sectors.
