A.   Background

1.   This refers to the related Important TLQCs in trail, blue, italic and double line (a) 3115 of 8.5.25 about Salaried Class: Exemption upto 1 M, Tax slab Reduction, etc proposed by KTBA (b) 3111 of 5.5.25 about Salaried class Tax surged 56% compared to LY; contributing 1,420% > Traders  (c) 3102 of 2.5.25 about Salaried Class Tax in 3 Years - mostly by your Goodself Category

2.   We also refer to several Other TLQC Including (a) 3095 of 26.4.25 about Zero Withholding Tax from Salary (b) 3084 of 14.4.25 about JI, PAFO, KC & SCA efforts continue to reduce Salary tax and Action (c) 2877 of 17.8.24 about IMF really wanted Higher Tax on Salaried class OR it’s a Misstatement 

B.   Updated Commentary

1.   Further to KQU 3359 dated 7.5.25, being an important matter, we would inform you about Pakistan plans major tax reforms for salaried class and pensioners ahead of IMF talks (Attachment 3121.1) in the ensuing paragraph, with emphasis in bold & Underline for quick reading.

2.   Pakistan is considering key changes in its tax policy for the upcoming budget of fiscal year 2025-26. The FBR plans to increase the annual tax exemption limit for salaried individuals from Rs 600,000 to possibly Rs1,000,000 or Rs1,200,000. These proposals come ahead of the IMF mission’s visit on May 16 to review Pakistan’s budget plans and economic targets.

3.   At the same time, the government is also looking at bringing pensioners into the tax net. One proposal suggests taxing those who receive more than Rs100,000 monthly pension. The potential tax rates could range between 2% and 5%. However, officials admit that this idea might not pass all approval stages due to expected backlash.

4.   The IMF has asked Pakistan to reduce exemptions and improve tax equality. Therefore, authorities are pushing for a fairer tax system by including high-income pensioners. The government may also propose lowering tax rates for the middle-income group, which currently contributes a large share of tax revenue. Additionally, a 10% surcharge on very high-income earners could be dropped.

5.   Although these steps aim to widen the tax base, concerns remain about their impact on fixed-income groups. Policymakers must strike a balance between meeting IMF conditions and protecting ordinary citizens. Talks with various stakeholders are ongoing before finalizing the budget.

6.   Meanwhile, suggestions are also being made to revise super tax rates and review other tax measures. The Senate Finance Committee recently met with trade groups to gather their feedback. As the budget deadline approaches, Pakistan will have to align its revenue strategy with both IMF expectations and public interest.

C.   Multiplication - Your Action to Ensure Reduction 

If Yours and Public support will continue via Associations, Institute, Organization to the Government directly and Indirectly as well as PAFO, SCA and with Invitation to your friends & relatives to be a part of this great struggle based on regular increase in Jamaat e Islami membership form being filled, then Salary tax will also be reduced (like first phase reduction in tax.

JI expects your support and be a Member of the JI, whose current workers are taking risks and working in your Favour; and Against Unreasonable Salary Tax inspite of huge increase Parliamentarian & Ministers Salaries. 

Otherwise, be ready for constant increases in Salary Taxation (inspite of above claims) & Corruption, No much Electricity Bills reduction with different methods, inspite of Govt claims of New Agreement and Huge Savings, nothing will be transferred to the public by Salary taxation & Electricity bills reduction.

D.   Further Details & Services 

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Advisory, Statement or Return Filing or Review services, or related accounting matters like the above, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com. Your Goodself may continue to get other services from your current Tax & Legal Advisors.

Best regards for Here & Hereafter
Asif S Kasbati (FCA, FCMA & LLB)

Managing Partner 

Kasbati & Co (1400+ Tax, Levies, Companies, Economy, Inflation, HR, Banking, Finance, etc

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