Pakistan’s proposed 2025-26 tax rates for salaried individuals post IMF nod

The International Monetary Fund (IMF) has reportedly agreed to Pakistan’s request to reduce income tax for salaried individuals in the upcoming Budget 2025-26. This is a major development and could bring relief to millions of employees across the country.

What’s Changing?

Currently, only those earning up to Rs50,000 per month are fully tax-free. But now, the government plans to increase this limit to Rs83,000 per month, meaning people earning this amount or less may not have to pay any income tax.

This change will come under Clause 129 of the Income Tax Act, which deals with tax concessions. The IMF has shown a positive response to this proposal.

New Proposed Tax Rates (Expected)

• Monthly salary of Rs100,000: Tax rate may reduce from 5% to 2.5%
• Rs183,000 per month: From 15% to 12.5%
• Rs267,000 per month: From 25% to 22.5%
• Up to Rs333,000 per month: From 30% to 27.5%
• Above Rs333,000 per month: From 35% to 32.5%

These changes aim to reduce the burden on the working class and give some financial relief in tough economic times.

What’s Next?

The government has promised the IMF that all other goals under the current loan program will also be met. The new tax slabs are expected to be officially announced in the federal budget for the year 2025–26.

This move is seen as a positive step toward helping the middle class and improving public confidence in the tax system.

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